FIDELITY
(REGISTERED TRADEMARK)
PURITAN(registered trademark)
FUND
SEMIANNUAL REPORT
JANUARY 31, 1996
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 45 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 49 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
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
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). Effective January 1, 1996, the
fund's 2% sales charge was eliminated. If this sales charge were taken into
account, total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1996 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Puritan 7.77% 23.76% 109.35% 235.64%
Lehman Brothers Aggregate
Bond Index 7.25% 16.95% 56.38% 151.05%
S&P 500(registered trademark) 14.54% 38.66% 113.54% 311.87%
Equity Income Funds 12.93% 30.63% 100.26% 213.70%
Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one, five, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 Stocks - a common proxy for the U.S. stock market - and the
performance of the Lehman Brothers Aggregate Bond Index, a broad measure of
the bond market. To measure how the fund's performance stacked up against
its peers, you can compare it to the equity income funds average, which
reflects the performance of 136 equity income funds with similar objectives
tracked by Lipper Analytical Services over the past six months. These
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Puritan 23.76% 15.92% 12.87%
Lehman Brothers Aggregate Bond Index 16.95% 9.35% 9.64%
S&P 500(registered trademark) 38.66% 16.38% 15.20%
Equity Income Funds Average 30.63% 14.76% 11.78%
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 5LB Aggregate
Bond
01/31/86 10000.00 10000.00
10000.00
02/28/86 10536.28 10748.00
10394.25
03/31/86 10962.15 11347.74
10719.62
04/30/86 10962.38 11219.51
10774.22
05/31/86 11098.41 11816.39
10568.66
06/30/86 11186.42 12016.08
10844.57
07/31/86 10895.13 11344.38
10940.94
08/31/86 11484.94 12186.14
11212.08
09/30/86 11268.87 11178.34
11101.79
10/31/86 11592.84 11823.33
11262.64
11/30/86 11698.39 12110.64
11419.46
12/31/86 11733.57 11801.82
11463.07
01/31/87 12450.16 13391.53
11624.29
02/28/87 12691.13 13920.49
11704.90
03/31/87 12905.33 14322.79
11652.13
04/30/87 12825.38 14195.32
11332.62
05/31/87 12807.28 14318.82
11288.29
06/30/87 13142.17 15041.92
11443.65
07/31/87 13515.04 15804.55
11434.85
08/31/87 13790.67 16394.05
11373.66
09/30/87 13503.90 16035.03
11131.47
10/31/87 11508.98 12581.08
11527.92
11/30/87 11099.68 11544.40
11620.26
12/31/87 11523.46 12422.93
11778.54
01/31/88 12223.06 12945.93
12192.58
02/29/88 12592.85 13549.21
12337.31
03/31/88 12361.51 13130.54
12221.53
04/30/88 12534.19 13276.29
12155.58
05/31/88 12747.49 13391.80
12073.87
06/30/88 13209.62 14006.48
12365.16
07/31/88 13240.58 13953.26
12300.31
08/31/88 13106.41 13478.84
12332.55
09/30/88 13479.39 14053.04
12611.75
10/31/88 13699.50 14443.72
12849.19
11/30/88 13605.17 14237.17
12693.10
12/31/88 13700.01 14486.32
12707.39
01/31/89 14376.43 15546.72
12890.22
02/28/89 14247.59 15159.61
12796.79
03/31/89 14506.40 15512.83
12852.12
04/30/89 14996.85 16317.94
13121.06
05/31/89 15498.20 16978.82
13465.85
06/30/89 15606.57 16882.04
13875.86
07/31/89 16468.69 18406.49
14170.82
08/31/89 16579.22 18767.26
13960.87
09/30/89 16396.43 18690.31
14032.32
10/31/89 15906.14 18256.70
14378.21
11/30/89 16202.60 18629.13
14515.24
12/31/89 16385.03 19076.23
14554.08
01/31/90 15691.36 17796.22
14381.14
02/28/90 15858.80 18025.79
14427.30
03/31/90 15881.62 18503.47
14437.93
04/30/90 15493.08 18040.88
14305.66
05/31/90 16355.16 19799.87
14729.22
06/30/90 16267.62 19665.23
14965.56
07/31/90 16119.73 19602.30
15172.58
08/31/90 15146.14 17830.25
14969.95
09/30/90 14442.84 16961.92
15093.80
10/31/90 14192.32 16888.98
15285.43
11/30/90 14994.00 17980.01
15614.47
12/31/90 15344.53 18481.66
15857.76
01/31/91 16032.17 19287.46
16053.79
02/28/91 16961.75 20666.51
16190.83
03/31/91 17074.45 21166.64
16302.21
04/30/91 17216.63 21217.44
16478.82
05/31/91 18056.78 22134.03
16575.19
06/30/91 17430.28 21120.29
16566.76
07/31/91 18033.59 22104.50
16796.50
08/31/91 18348.35 22628.37
17159.97
09/30/91 18363.77 22250.48
17507.69
10/31/91 18629.91 22548.64
17702.62
11/30/91 17991.17 21639.93
17864.94
12/31/91 19097.26 24115.53
18395.50
01/31/92 19259.33 23666.99
18145.24
02/29/92 19799.56 23974.66
18263.23
03/31/92 19702.79 23507.15
18160.27
04/30/92 20346.31 24198.26
18291.44
05/31/92 20579.08 24316.83
18636.60
06/30/92 20468.21 23954.51
18893.08
07/31/92 21091.82 24934.25
19278.54
08/31/92 20883.95 24423.10
19473.84
09/30/92 21138.60 24711.29
19704.68
10/31/92 20979.01 24797.78
19443.43
11/30/92 21544.83 25643.39
19447.82
12/31/92 22043.47 25958.80
19757.07
01/31/93 22671.58 26176.85
20135.94
02/28/93 23135.18 26532.86
20488.42
03/31/93 24049.99 27092.70
20573.79
04/30/93 24503.76 26437.06
20717.06
05/31/93 24836.53 27145.57
20743.44
06/30/93 25004.59 27224.29
21119.38
07/31/93 25371.63 27115.40
21238.82
08/31/93 26105.71 28143.07
21611.09
09/30/93 25926.01 27926.37
21670.45
10/31/93 26600.06 28504.44
21751.43
11/30/93 26172.61 28233.65
21566.39
12/31/93 26771.15 28575.28
21683.28
01/31/94 27960.97 29546.84
21976.04
02/28/94 27655.02 28746.12
21594.24
03/31/94 26625.68 27492.79
21061.85
04/30/94 26917.32 27844.70
20893.67
05/31/94 27088.88 28301.35
20890.74
06/30/94 26879.20 27607.97
20844.57
07/31/94 27553.78 28513.51
21258.61
08/31/94 28366.73 29682.56
21284.99
09/30/94 27755.09 28955.34
20971.71
10/31/94 28080.56 29606.83
20953.03
11/30/94 27194.57 28528.55
20906.49
12/31/94 27248.81 28951.63
21050.86
01/31/95 27120.02 29702.35
21467.46
02/28/95 27947.97 30859.85
21977.87
03/31/95 28596.61 31770.52
22112.71
04/30/95 29171.51 32706.16
22421.59
05/31/95 29802.05 34013.43
23289.24
06/30/95 30136.78 34803.56
23459.99
07/31/95 31144.45 35957.65
23407.59
08/31/95 31293.74 36047.90
23690.09
09/30/95 31742.10 37569.12
23920.56
10/31/95 31231.35 37435.00
24231.64
11/30/95 32347.43 39078.40
24594.75
12/31/95 33096.53 39831.05
24939.91
01/31/96 33563.50 41186.90
25105.53
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Puritan
Fund on January 31, 1986. As the chart shows, by January 31, 1996, the
value of your investment would have grown to $33,564 - a 235.64% 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 $41,187 - a 311.87% increase. If you'd put $10,000 in the bond
index, it would have grown to $25,105 - a 151.05% 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. HOW DID THE FUND PERFORM, RICH?
A. Not as well as I would have liked. For the six months and 12 months
ended January 31, 1996, the fund returned 7.77% and 23.76%, respectively.
The equity income funds average, as tracked by Lipper Analytical Services,
returned 12.93% for six months and 30.63% for the past 12 months.
Additionally, the fund's benchmark index, the S&P 500, gained 14.54% for
six months and 38.66% for 12 months.
Q. WHAT DO YOU BELIEVE HURT THE FUND'S PERFORMANCE?
A. There were several factors. The fund's position in Japanese equities, on
a currency-adjusted basis, was the biggest reason for the fund's
underperformance. The dollar hit a post-World War II low of about 80 yen in
April 1995 and then proceeded to appreciate about 30% to about 104 yen by
the end of 1995. Therefore, when returns are translated back into dollars,
they are lower than they would be in yen. Additionally, the market favored
large-capitalization, growth stocks - as opposed to the undervalued
companies the fund favors - and those stocks outperformed all other types
of investments. In sum, the fund's value-oriented approach, its bond
position and its foreign securities position all hurt performance relative
to the strong rise in the S&P during the period.
Q. WHY DID LARGE-CAPITALIZATION AND CONSUMER-ORIENTED STOCKS PERFORM WELL
AND WHY DIDN'T THE FUND OWN MANY OF THEM?
A. While technology companies took the headlines for much of the year, it
was the large-capitalization and consumer-oriented companies that
outperformed the rest of the market. Investors believed that these
companies - such as pharmaceutical firms, telephone companies and beverage
companies - would be able to perform well despite an economic slowdown. The
fund was underweighted in these stocks relative to the market because I
thought they were overpriced. The equity portion of this fund is run with a
value style of management. Therefore when a company's fundamentals are
roaring and its stock is expensive, the fund usually won't buy it.
Q. GIVEN THE FACT THAT INTEREST RATES WERE FALLING ALL YEAR, THE FUND'S
FINANCIAL STOCKS MUST HAVE DONE WELL . . .
A. The ones the fund owned during the period did well. However, again
because of valuation, it was underweighted in these stocks relative to the
market. Financial companies - banks, brokerages and insurance companies -
and their stocks tend to perform well in a falling interest rate
environment like we saw in 1995.
Q. TURNING TO BONDS, WHAT'S YOUR OPINION ON THE BOND MARKET RIGHT NOW?
A. The bond market has done well. However, I'm now neutral on bonds. In my
opinion, there are no striking values. Spreads - or the difference in yield
between different bonds - are tight and real (adjusted for inflation)
yields are not particularly enticing.
Q. HOW WOULD YOU DESCRIBE THE FUND'S YIELD?
A. The fund's yield was low. It pretty much represents the performance of
the stock and bond markets. Let me explain. The total return for any
investment is calculated by adding its price-performance to its income
(yield). Given that price and yield move in opposite directions, if a stock
or bond performs as we saw in 1995, the majority of its total return will
be price appreciation. It should be noted that the S&P had a record low
yield during the reporting period, primarily because of its unusually
strong price appreciation during the year.
Q. LOOKING AT SOME OF THE FUND'S OTHER EQUITY SECTORS, WHAT'S BEEN THE
STORY WITH ENERGY?
A. Many of the energy service and oil-related companies' stocks began 1995
at very cheap levels. In my opinion, energy is an area of the market that
has had attractive supply and demand dynamics. For example, when energy
prices go higher, oil companies will have more money with which to drill.
Conversely, drilling capacity is down substantially as the number of
drilling rigs has gone down worldwide. These companies, therefore, are
doing well in a low-oil-price environment and eventually that performance
may be reflected in their stock prices.
Q. MOST RETAILING COMPANIES AND DEPARTMENT STORES HAD A BAD 1995. IS RETAIL
ANOTHER AREA YOU MIGHT CONSIDER?
A. Sure. Retail stocks got beaten up in 1995 as consumers kept a tight
reign on their pursestrings. The industry also endured several high-profile
bankruptcies. In my opinion, the remaining companies will run their
businesses better. Additionally, shareholders should not overlook the fact
that some retailers remained strong throughout the year - such as the Gap
and Sears.
Q. OTHER THAN THE JAPANESE EQUITIES YOU SPOKE OF EARLIER, WHAT OTHER
FOREIGN HOLDINGS DID YOU OWN?
A. For the most part, the fund owned high-quality, global companies like
Schlumberger Ltd., an energy-service provider, British Petroleum PLC and
Sony Corp. Unfortunately for foreign stocks, the U.S. market outperformed
all other markets.
Q. WHAT'S YOUR OUTLOOK?
A. When stock prices get to the high levels they are at now, the number of
stocks a value investor has to choose from shrinks. I will, however,
continue to stick to my strategy of searching for cheaply-priced companies
that may have been overlooked by the general market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high income with
preservation of capital. The
fund also considers the
potential for the growth of
capital
START DATE: April 16, 1947
SIZE: as of January 31,
1996, more than $16 billion
MANAGER: Richard Fentin,
since 1987; manager,
Fidelity Growth Company
Fund, 1983-1987; joined
Fidelity in 1980
(checkmark)
RICH FENTIN ON THE VALUE STYLE
OF INVESTING:
"I buy stocks cheap. That's
the bottom line. Anytime I
describe the attributes of a
particular industry or sector I
like, the first thing I will say is
that `the stocks are cheap.'
Basically, I seek high-quality
companies at low prices. I'm
looking for situations where a
stock's valuation is out of
whack with the quality of the
company.
"For a recent example,
take consumer stocks. I
owned Philip Morris - one of
the year's top stocks - not
because it was a hot stock or
that it might perform well in an
economic downturn. I owned
it because it began the year at
an inexpensive level. In my
view, only owning the
market's favorite high-flying
stocks is dangerous because
if something goes wrong, they
are often the first ones to get
hurt."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Schlumberger Ltd. 2.5 2.7
Loews Corp. 1.7 1.4
du Pont (E.I.) de Nemours & Co. 1.6 1.1
British Petroleum PLC ADR 1.4 1.5
Burlington Resources, Inc. 1.0 0.7
TOP FIVE BONDS AS OF JANUARY 31, 1996
(BY ISSUER, WITH MATURITIES OF MORE % OF FUND'S % OF FUND'S
THAN ONE YEAR) INVESTMENTS INVESTMENTS
IN THESE BONDS
6 MONTHS AGO
United States Government 18.3 19.1
(various issues)
CS First Boston Mortgage
Securities Corp. (various 0.3 0.0
issues)
General Motors Acceptance 0.3 0.3
Corp.
(various issues)
MBL International Finance
Bermuda 3%, 11/30/02 0.2 0.0
Comdisco, Inc. (various issues) 0.2 0.2
TOP FIVE MARKET SECTORS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Energy 11.0 11.1
Finance 8.5 10.5
Durables 7.7 6.1
Basic Industries 7.7 8.1
Retail & Wholesale 7.5 8.6
ASSET ALLOCATION
AS OF JANUARY 31, 1996 * AS OF JULY 31, 1995 **
Row: 1, Col: 1, Value: 6.9
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 3.6
Row: 1, Col: 4, Value: 25.7
Row: 1, Col: 5, Value: 62.3
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 27.1
Row: 1, Col: 5, Value: 66.09999999999999
Stocks 63.3%
Bonds 26.7%
Convertible
securities 2.6%
Other 0.5%
Short-term
investments 6.9%
FOREIGN
INVESTMENTS 18.5%
Stocks 67.1%
Bonds 28.1%
Convertible
securities 2.7%
Other 0.1%
Short-term
investments 2.0%
FOREIGN
INVESTMENTS 20.1%
*
**
INVESTMENTS JANUARY 31, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 62.4%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.2%
Flightsafety International, Inc. 614,900 $ 30,668
Harsco Corp. 127,300 7,877
38,545
BASIC INDUSTRIES - 6.8%
CHEMICALS & PLASTICS - 5.4%
Albemarle Corp. 1,270,500 23,663
Albright & Wilson PLC 7,145,100 17,940
Betz Laboratories, Inc. (g) 2,261,100 93,553
du Pont (E.I.) de Nemours & Co. 3,418,100 262,765
Great Lakes Chemical Corp. 1,945,300 145,168
Lubrizol Corp. 2,276,400 65,731
Nalco Chemical Co. (g) 3,945,700 120,837
Schulman (A.), Inc. 854,000 19,429
Sekisui Chemical Co. Ltd. 747,000 10,044
Shin-Etsu Chemical Co. Ltd. 1,606,000 32,390
Union Carbide Corp. 1,943,500 81,870
Witco Corp. 40,000 1,270
874,660
IRON & STEEL - 0.3%
Armco, Inc. (a) 986,400 5,425
Nucor Corp. 625,800 36,375
Republic Engineered Steels, Inc. (a) 350,000 1,838
43,638
METALS & MINING - 0.5%
Alcan Aluminium Ltd. 1,542,900 49,011
Alumax, Inc. (a) 792,800 24,973
Aluminum Co. of America 265,000 14,708
88,692
PACKAGING & CONTAINERS - 0.6%
Caradon PLC 2,410,200 8,129
Carnaudmetalbox SA 285,000 12,163
Corning, Inc. 10,000 313
Crown Cork & Seal Co., Inc. (a) 1,396,600 57,435
Owens-Illinois, Inc. (a) 1,515,600 21,597
99,637
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.0%
Champion International Corp. 10,600 $ 474
Mail-Well Holdings, Inc. (a)(i) 21,307 237
711
TOTAL BASIC INDUSTRIES 1,107,338
CONGLOMERATES - 1.3%
Allied-Signal, Inc. 212,300 10,588
American Standard Companies, Inc. 1,006,500 29,314
Brascan Ltd. Class A 950,000 17,034
Coltec Industries, Inc. (a) 2,435,400 28,616
Teledyne, Inc. 253,700 6,343
Textron, Inc. 10,000 786
Tomkins PLC Ord. 3,533,484 14,724
Tyco International Ltd. 482,600 17,072
United Technologies Corp. 903,800 92,752
217,229
CONSTRUCTION & REAL ESTATE - 2.0%
BUILDING MATERIALS - 0.2%
Masco Corp. 994,400 29,086
Tostem Corp. 374,000 12,292
41,378
CONSTRUCTION - 0.3%
Castle & Cooke, Inc. (a) 692,533 9,695
Daiwa House Industry Co. Ltd. 1,025,000 16,270
McDermott (J. Ray) SA 832,700 13,844
Sekisui House Ltd. 371,000 4,711
Walter Industries, Inc. (a) 25,748 325
44,845
ENGINEERING - 0.4%
EG & G, Inc. (g) 3,150,600 70,101
REAL ESTATE INVESTMENT TRUSTS - 1.1%
Associated Estates Realty Corp. 87,700 1,897
Bay Apartment Communities, Inc. 66,300 1,583
Beacon Properties Corp. 100,000 2,488
Bradley Real Estate Trust (SBI) 26,900 397
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - CONTINUED
CBL & Associates Properties, Inc. 249,900 $ 5,123
CWM Mortgage Holdings, Inc. 55,000 949
Cali Realty Corp. 425,000 9,191
CenterPoint Properties Corp. 203,989 4,845
Crown American Realty Trust (SBI) 21,300 165
Developers Diversified Realty Corp. 80,000 2,300
Duke Realty Investors, Inc. 100,000 3,213
Equity Residential Properties Trust (SBI) 311,485 9,578
Excel Realty Trust, Inc. 309,200 6,455
Felcor Suite Hotels, Inc. 614,900 18,370
First Industrial Realty Trust, Inc. 162,100 3,728
Glimcher Realty Trust (SBI) 94,300 1,450
Haagen Alexander Properties, Inc. 149,800 1,760
Highwoods Properties, Inc. 151,100 4,609
Innkeepers USA Trust 100,000 938
Kimco Realty Corp. 289,200 7,519
LTC Properties, Inc. 636,500 10,423
Liberty Property Trust (SBI) 402,100 8,896
Macerich Co. 397,600 7,803
National Golf Properties, Inc. 221,300 5,173
Omega Healthcare Investors, Inc. 55,300 1,569
Patriot American Hospitality, Inc. 300,000 8,250
Public Storage, Inc. 558,900 11,388
RFS Hotel Investors, Inc. 650,000 11,535
Realty Income Corp. 121,000 2,798
Simon Properties Group, Inc. 246,800 5,522
Speiker Properties, Inc. 101,700 2,555
Starwood Lodging Trust combined certificate (SBI) 229,400 7,369
Sunstone Hotel Investors, Inc. 229,180 2,492
Urban Shopping Centers, Inc. 160,000 3,400
Weeks Corp. 141,100 3,704
179,435
TOTAL CONSTRUCTION & REAL ESTATE 335,759
DURABLES - 7.5%
AUTOS, TIRES, & ACCESSORIES - 3.7%
Cummins Engine Co., Inc. 1,537,800 59,398
Eaton Corp. 616,000 35,728
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Genuine Parts Co. 1,153,600 $ 51,335
Honda Motor Co. Ltd. 3,405,000 74,395
Johnson Controls, Inc. 1,593,300 115,116
Michelin SA Cie Generale des Etablissements Class B 1,775,000 75,406
PACCAR, Inc. 244,900 11,204
Pullman Co. (a) 63,250 569
Snap-on Tools Corp. (g) 2,909,600 127,659
Superior Industries International, Inc. 518,300 12,698
Toyota Motor Corp. 2,005,000 43,058
606,566
CONSUMER ELECTRONICS - 1.9%
Matsushita Electric Industrial Co. Ltd. 5,674,000 94,302
Sony Corp. 1,627,400 99,528
Sunbeam-Oster, Inc. (g) 4,467,000 71,472
Whirlpool Corp. 753,300 40,961
306,263
HOME FURNISHINGS - 0.3%
Heilig-Meyers Co. (g) 3,241,000 50,236
MFI Furniture Group PLC 1,750,000 4,314
Miller (Herman), Inc. 180,100 5,763
Polyvision Corp. (a) 18,709 37
60,350
TEXTILES & APPAREL - 1.6%
Burlington Industries, Inc. (a) 2,360,200 30,093
Fruit of the Loom, Inc. Class A (a) 1,544,500 38,806
Intimate Brands, Inc. Class A 603,000 8,894
Liz Claiborne, Inc. 30,000 836
Russell Corp. (g) 2,014,300 55,393
Shaw Industries, Inc. 380,500 4,804
Stride Rite Corp. 1,875,600 15,474
Unifi, Inc. (g) 4,608,000 102,528
256,828
TOTAL DURABLES 1,230,007
ENERGY - 10.1%
COAL - 0.1%
MAPCO, Inc. 152,100 8,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - 4.1%
Baker Hughes, Inc. 5,608,500 $ 145,120
Diamond Offshore Drilling, Inc. (a) 351,000 13,382
Dresser Industries, Inc. 251,500 6,539
Helmerich & Payne, Inc. (g) 1,557,900 49,074
Marine Drilling Companies, Inc. (a) 500,000 2,813
McDermott International, Inc. 1,190,500 23,066
Schlumberger Ltd. 5,786,200 405,756
Transocean Drilling AS (a) 1,122,500 20,584
Weatherford Enterra, Inc. (a) 55,686 1,657
667,991
OIL & GAS - 5.9%
Amerada Hess Corp. 2,569,800 141,660
Atlantic Richfield Co. 698,417 79,358
British Petroleum PLC:
ADR 2,392,771 233,594
Ord. 7,577,944 60,632
Burlington Resources, Inc. 4,198,600 157,446
Coastal Corp. (The) 2,617,500 99,138
Harcor Energy, Inc. (warrants) (a) 165,000 191
Kelley Oil & Gas Corp. (a)(g) 3,000,000 5,438
Murphy Oil Corp. 10,000 421
Occidental Petroleum Corp. 2,302,400 49,502
Petro-Canada 1,007,200 11,918
Petro-Canada 1st installment receipt (n) 691,000 4,088
Renaissance Energy Ltd. (a) 430,000 10,724
Royal Dutch Petroleum Co. 259,400 36,057
San Juan Basin Royalty Trust (UBI) 1,469,600 9,369
Sun Co., Inc. 10,000 273
Total SA:
Class B 769,460 52,678
sponsored ADR 228,419 7,880
Union Pacific Resources Group, Inc. 341,000 8,866
969,233
TOTAL ENERGY 1,645,799
FINANCE - 5.3%
BANKS - 0.4%
Banc One Corp. 751,700 28,471
Deutsche Bank AG 800,000 39,906
68,377
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 0.5%
Acom Co. Ltd. 100,000 $ 3,875
American Express Co. 1,555,827 71,568
75,443
INSURANCE - 3.3%
Alexander & Alexander Services, Inc. 236,100 4,574
Allmerica Financial Corp. 35,000 932
Allstate Corp. 1,900,222 82,897
Berkley (W.R.) Corp. (g) 950,000 47,738
Chubb Corp. (The) 313,300 32,505
General Re Corp. 20,900 3,198
GCR Holdings Ltd. 35,000 801
ITT Hartford Group, Inc. 353,900 17,739
Loews Corp. 3,404,600 281,305
MBIA, Inc. 524,100 38,652
NAC Re Corp. 707,900 24,069
PMI Group, Inc. 121,500 6,090
Transport Holdings, Inc. Class A (a) 54 2
Travelers, Inc. (The) 10,848 713
541,215
SAVINGS & LOANS - 0.3%
Golden West Financial Corp. 769,170 39,805
SECURITIES INDUSTRY - 0.8%
Bear Stearns Companies, Inc. 649,950 14,949
Daiwa Securities Co. Ltd. 1,264,000 18,883
ECM Corp. LP (i) 6,318 632
Nomura Securities Co. Ltd. 4,750,000 102,894
137,358
TOTAL FINANCE 862,198
HEALTH - 1.8%
DRUGS & PHARMACEUTICALS - 0.6%
Sankyo Co. Ltd. 1,500,000 35,434
Sigma Aldrich Corp. 422,400 22,176
Takeda Chemical Industries Ltd. 1,116,000 17,610
Yamanouchi Pharmaceutical Co. Ltd. 709,000 15,491
90,711
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - 1.2%
Bausch & Lomb, Inc. 1,429,200 $ 55,560
Baxter International, Inc. 1,870,000 85,085
Hillenbrand Industries, Inc. 1,619,100 53,835
Pall Corp. 111,700 3,016
197,496
TOTAL HEALTH 288,207
HOLDING COMPANIES - 0.0%
SDW Holdings Corp. (warrants) (a) 1,970 9
INDUSTRIAL MACHINERY & EQUIPMENT - 4.7%
ELECTRICAL EQUIPMENT - 1.4%
Alcatel Alsthom Cie Generale d'Electricite SA 61,000 5,570
Alcatel Alsthom Cie Generale d'Electricite SA sponsored ADR 491,100 9,024
AMETEK, Inc. (g) 3,305,000 55,772
Ampex Corp. Class A (a) 93,551 351
Mitsubishi Electric Co. Ord. 11,006,000 79,642
Omron Corp. 2,966,000 65,357
Scientific-Atlanta, Inc. 1,397,100 22,004
237,720
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
Caterpillar, Inc. 294,400 18,952
Cooper Industries, Inc. 2,102,494 79,106
Exide Corp. 627,900 17,895
Goulds Pumps, Inc. 1,060,900 23,605
Harnischfeger Industries, Inc. 1,236,100 41,873
Keystone International, Inc. 1,468,100 30,647
Mitsubishi Heavy Industries Ltd. 6,502,000 51,542
Stanley Works 464,900 23,942
Tenneco, Inc. 100,000 5,163
Terex Corp. (rights) (a)(h) 5,610 1
Thermadyne Holdings Corp. (a) 82,059 1,405
Valmet OY Class A 1,000,000 25,547
319,678
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 1.3%
Browning-Ferris Industries, Inc. 4,146,500 $ 122,321
Safety Kleen Corp. (g) 4,034,500 60,518
WMX Technologies, Inc. 1,100,000 32,863
215,702
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 773,100
MEDIA & LEISURE - 1.4%
BROADCASTING - 0.0%
U.S. Satellite Broadcasting Co., Inc. Class A 16,500 446
ENTERTAINMENT - 0.0%
Live Entertainment, Inc. (a)(h):
$2.00 (warrants) 256,000 13
$2.72 (warrants) 244,705 12
25
LEISURE DURABLES & TOYS - 0.6%
Brunswick Corp. 1,014,700 22,958
Fleetwood Enterprises, Inc. (g) 2,394,200 61,052
IHF Capital, Inc. (a)(i):
Series H (warrants) 10,225 1,022
Series I (warrants) 5,050 151
Rawlings Sporting Goods, Inc. (a)(g) 781,500 6,057
91,240
LODGING & GAMING - 0.0%
Bally's Grand, Inc. (warrants) (a) 12,878 84
Bally Gaming International, Inc. (warrants) (a) 135,000 540
Motels of America, Inc. (a) 3,000 240
Sun International Hotels Ltd. (a):
Class A 78,214 2,346
Class B 16,424 468
3,678
PUBLISHING - 0.1%
General Media, Inc. (warrants) (a) 1,110 6
K-III Communications Corp. (a) 200,000 2,375
Mirror Group Newspaper PLC 3,500,000 9,925
Times Mirror Co. Class A 285,900 8,863
Tribune Co. 22,500 1,409
22,578
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 0.7%
Brinker International, Inc. (a)(g) 4,940,100 $ 63,604
Darden Restaurants, Inc. 4,115,500 47,328
110,932
TOTAL MEDIA & LEISURE 228,899
NONDURABLES - 4.0%
BEVERAGES - 0.5%
Anheuser-Busch Companies, Inc. 1,025,100 71,244
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 14,214,000 6,925
78,169
FOODS - 1.0%
ConAgra, Inc. 1,827,300 83,827
Dole Food, Inc. 2,078,800 77,435
Flowers Industries, Inc. 281,700 3,733
International Multifoods Corp. 253,400 4,688
Sara Lee Corp. 2,100 71
169,754
HOUSEHOLD PRODUCTS - 1.0%
First Brands Corp. 904,100 44,640
Rubbermaid, Inc. 3,996,600 113,404
Stanhome, Inc. 421,900 11,286
169,330
TOBACCO - 1.5%
Philip Morris Companies, Inc. 886,900 82,482
RJR Nabisco Holdings Corp. 3,509,422 114,055
Seita 1,003,600 38,608
235,145
TOTAL NONDURABLES 652,398
PRECIOUS METALS - 0.7%
Agnico Eagle Mines Ltd. 1,169,400 19,159
Firstmiss Gold, Inc. (a) 286,000 7,722
Newmont Mining Corp. 1,218,100 68,213
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
PRECIOUS METALS - CONTINUED
Sudbury Contact Mines Ltd. (a) 358,000 $ 4,399
Western Mining Holdings Ltd. 2,025,000 12,474
111,967
RETAIL & WHOLESALE - 7.1%
APPAREL STORES - 1.3%
Filene's Basement Corp. (a)(g) 1,927,310 4,939
Gap, Inc. 1,353,100 63,765
Lamonts Apparel, Inc. (a) 50,220 10
Lamonts Apparel, Inc. (warrants) (a) 92,674 -
Limited, Inc. (The) 6,586,100 110,317
TJX Companies, Inc. 1,530,600 28,890
207,921
GENERAL MERCHANDISE STORES - 3.9%
Dayton Hudson Corp. 1,848,900 138,205
Dillard Department Stores, Inc. Class A 2,490,800 72,233
Family Dollar Stores, Inc. 1,869,600 22,202
Federated Department Stores, Inc. (a) 4,001,187 108,032
Ito-Yokado Co. Ltd. 1,400,000 79,608
Mac Frugals Bargains Closeouts, Inc. (a)(g) 1,485,900 20,617
Price/Costco, Inc. (a) 1,995,100 31,173
Sears, Roebuck & Co. 1,036,100 42,998
Wal-Mart Stores, Inc. 6,313,600 128,640
643,708
GROCERY STORES - 0.9%
Asda Group PLC 8,000,000 12,796
FF Holdings Corp. (a)(h) 39,600 79
Fleming Companies, Inc. 207,813 3,948
Food 4 Less Holdings, Inc. (warrants) (a)(h) 14,206 431
Great Atlantic & Pacific Tea Co., Inc. 1,603,000 37,671
Grand Union Capital Corp. Class B (a) 5,975 -
Supervalu, Inc. 3,074,000 95,294
150,219
RETAIL & WHOLESALE, MISCELLANEOUS - 1.0%
Barry's Jewelers, Inc. (a) 45,576 154
Barry's Jewelers, Inc. (warrants) (a) 5,697 1
Duty Free International, Inc. 1,029,700 15,059
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Fabri-Centers of America, Inc. (a):
Class A 441,800 $ 6,020
Class B (non-vtg.) 441,800 5,412
Fingerhut Companies, Inc. (g) 2,410,400 32,841
Pier 1 Imports, Inc. 1,041,500 12,238
Tandy Corp. 910,400 34,823
Toys "R" Us, Inc. (a) 900,000 19,913
Uny Co. Ltd. 1,516,000 28,310
154,771
TOTAL RETAIL & WHOLESALE 1,156,619
SERVICES - 3.3%
ADVERTISING - 0.3%
WPP Group PLC 2,388,900 6,251
WPP Group PLC (i) 13,740,000 36,160
WPP Group PLC ADR 108,200 2,813
45,224
PRINTING - 1.0%
Deluxe Corp. 2,313,500 67,959
Donnelley (R.R.) & Sons Co. 1,292,200 46,358
Harland (John H.) Co. 1,092,900 24,044
Nashua Corp. 235,700 3,241
Toppan Printing Co. Ltd. 1,853,000 24,741
166,343
SERVICES - 2.0%
ADT Ltd. (a) 4,306,400 62,445
BET PLC Ord. 28,864,900 57,192
Block (H & R), Inc. 253,100 9,333
CPI Corp. 331,400 4,888
Ideon Group, Inc. (g) 2,552,700 27,122
Jostens, Inc. (g) 2,006,400 46,147
National Service Industries, Inc. 424,300 14,797
Sotheby's Holdings, Inc. Class A (g) 1,981,100 29,469
Western Atlas, Inc. (a) 1,440,700 77,077
328,470
TOTAL SERVICES 540,037
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 3.2%
COMPUTERS & OFFICE EQUIPMENT - 0.7%
Canon, Inc. 991,000 $ 18,691
International Business Machines Corp. 392,500 42,684
Silicon Graphics, Inc. (a) 1,108,700 31,182
Wang Laboratories, Inc. (a) 1,268,651 23,629
116,186
ELECTRONICS - 1.7%
Alpine Group, Inc. 25,208 99
AMP, Inc. 3,371,000 131,469
Hitachi Ltd. 10,088,000 101,728
Nitto Denko Corp. 1,877,000 27,165
Thomas & Betts Corp. 180,300 14,176
274,637
PHOTOGRAPHIC EQUIPMENT - 0.8%
Fuji Photo Film Co. Ltd. 2,679,000 75,542
Konica Corp. 614,000 4,455
Polaroid Corp. 1,143,300 51,306
131,303
TOTAL TECHNOLOGY 522,126
TRANSPORTATION - 1.6%
AIR TRANSPORTATION - 0.0%
Trans World Airlines, Inc. (a) 961 9
RAILROADS - 0.5%
Burlington Northern Santa Fe Corp. 1,022,900 83,750
CSX Corp. 20,000 928
Union Pacific Corp. 100,000 6,662
91,340
TRUCKING & FREIGHT - 1.1%
Airborne Freight Corp. 617,600 16,444
Caliber System, Inc. (g) 2,369,400 90,036
Consolidated Freightways, Inc. 1,740,500 40,032
Hunt (J.B.) Transport Services, Inc. 901,500 14,086
Roadway Express, Inc. (g) 1,184,700 13,032
173,630
TOTAL TRANSPORTATION 264,979
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 1.4%
ELECTRIC UTILITY - 0.4%
Veba AG Ord. 1,549,000 $ 68,876
GAS - 0.1%
ENSERCH Corp. 1,602,800 23,441
UGI Corp. (warrants) (a) 13,633 2
23,443
TELEPHONE SERVICES - 0.8%
NYNEX Corp. 1,150,000 61,668
Telefonica de Espana SA Ord. 1,500,000 21,992
U.S. West, Inc. 1,076,200 37,802
121,462
WATER - 0.1%
Southern Water PLC Ord. 819,000 8,516
TOTAL UTILITIES 222,297
TOTAL COMMON STOCKS
(Cost $8,557,305) 10,197,513
PREFERRED STOCKS - 2.4%
CONVERTIBLE PREFERRED STOCKS - 1.5%
BASIC INDUSTRIES - 0.1%
METALS & MINING - 0.1%
Reynolds Metals Co. $3.31 330,400 16,396
PAPER & FOREST PRODUCTS - 0.0%
James River Corp., Series P, 9% depositary shares
representing 1/100 shares (dividend enhanced
conversion stock) 117,800 2,960
TOTAL BASIC INDUSTRIES 19,356
ENERGY - 0.6%
ENERGY SERVICES - 0.1%
McDermott International, Inc., Series C, $2.875 (i) 300,000 11,738
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - 0.5%
Atlantic Richfield Co. exchangeable $2.23 1,217,200 $ 30,582
Occidental Petroleum Corp. $3.875 (i) 389,500 21,812
Unocal Corp. $3.50 (i) 510,500 27,439
79,833
TOTAL ENERGY 91,571
FINANCE - 0.2%
INSURANCE - 0.2%
Alexander & Alexander Services, Inc., Series A,
$3.625 (i) 146,800 7,157
Allstate Corp. exchangeable $2.30 374,600 16,622
Jefferson Pilot Corp. $5.25625 70,000 5,198
28,977
HEALTH - 0.1%
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
U.S. Surgical Corp. $2.20 (i) 681,000 17,706
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
ELECTRICAL EQUIPMENT - 0.4%
Westinghouse Electric Corp. $1.30 (i) 3,708,000 71,843
RETAIL & WHOLESALE - 0.0%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Town & Country Corp. $2.00 117,347 105
UTILITIES - 0.1%
GAS - 0.0%
Columbia Gas System, Inc. exchangeable (dividend enhanced
conversion stock) 4,322 175
TELEPHONE SERVICES - 0.1%
Sprint Corp. $2.63 405,700 15,873
TOTAL UTILITIES 16,048
TOTAL CONVERTIBLE PREFERRED STOCKS 245,606
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.9%
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
S D Warren Co. 14% exchangeable pay-in-kind 1,970 $ 62
DURABLES - 0.2%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Volkswagen AG $12.00 87,000 23,568
ENERGY - 0.0%
OIL & GAS - 0.0%
Gulf Canada Resources Ltd. (h) 46,430 139
Gulf Canada Resources Ltd., Series 1, adj. rate 1,630,370 5,105
5,244
FINANCE - 0.1%
SAVINGS & LOANS - 0.1%
First Nationwide Bank $11.50 117,095 13,554
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp. 8% (a)(h) 2,581 1,687
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.2%
Cablevision System Corp., Series G, exchangeable
pay-in-kind (i) 142,158 15,211
PanAmSat Corp. 12 3/4% pay-in-kind 18,971 21,532
36,743
PUBLISHING - 0.1%
K-III Communications Corp.:
Series B, $11.625 pay-in-kind 12,122 1,264
Series C, exchangeable 54,400 5,494
6,758
TOTAL MEDIA & LEISURE 43,501
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
TECHNOLOGY - 0.0%
ELECTRONICS - 0.0%
Berg Electronics Holding Corp., Series E, $3.4687
pay-in-kind 216,694 $ 6,284
UTILITIES - 0.3%
ELECTRIC UTILITY - 0.3%
Gulf States Utilities Co.:
$1.75 500,000 12,063
$9.96 44,488 4,516
Series A, adj. rate 39,778 3,779
Series B, adj. rate 76,513 3,615
Long Island Lighting Co. $1.984 362,035 8,870
Public Service Co. of New Hampshire, Series A 751,707 19,637
52,480
GAS - 0.0%
Columbia Gas System, Inc. $1.97 7,058 174
TOTAL UTILITIES 52,654
TOTAL NONCONVERTIBLE PREFERRED STOCKS 146,554
TOTAL PREFERRED STOCKS
(Cost $358,579) 392,160
CORPORATE BONDS - 8.0%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) (D) AMOUNT (000S) (C)
CONVERTIBLE BONDS - 1.1%
CONGLOMERATES - 0.3%
Hanson America, Inc. 2.39%, 3/1/01 (i) A3 $ 28,650 23,994
Hanson PLC euro 9 1/2%, 1/31/06 A3 GBP 19,500 29,789
53,783
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
CONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - 0.0%
REAL ESTATE INVESTMENT TRUSTS - 0.0%
LTC Properties, Inc.:
8 1/2%, 1/1/00 B2 $ 2,088 $ 2,213
8 1/2%, 1/1/01 B2 343 353
Liberty Property LP exchangeable 8%, 7/1/01 - 1,962 2,156
4,722
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
MBL International Finance Bermuda
3%, 11/30/02 Aa3 34,133 38,314
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp., Series C, 0%, 6/30/97 - 762 890
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Cooper Industries, Inc. 7.05%, 1/1/15 A3 21,962 22,785
Exide Corp. 2.90%, 12/15/05 (i) B2 18,000 11,588
34,373
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 35,263
PRECIOUS METALS - 0.1%
Agnico Eagle Mines Ltd. yankee 3 1/2%, 1/27/04 B1 9,165 9,039
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
Federated Department Stores, Inc. 5%, 10/1/03 Ba3 15,200 15,295
GROCERY STORES - 0.0%
Farm Fresh, Inc. 7 1/2%, 3/1/10 B3 1,500 881
TOTAL RETAIL & WHOLESALE 16,176
SERVICES - 0.1%
ADT Operations, Inc. liquid yield option notes
0%, 7/6/10 Ba3 29,760 14,062
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.1%
COMPUTERS & OFFICE EQUIPMENT - 0.1%
Silicon Graphics, Inc. 0%, 11/2/13 (i) B1 $ 10,000 $ 5,400
TOTAL CONVERTIBLE BONDS 176,759
NONCONVERTIBLE BONDS - 6.9%
AEROSPACE & DEFENSE - 0.0%
RHI Holdings, Inc. 11 7/8%, 3/1/99 B2 2,090 2,132
BASIC INDUSTRIES - 0.8%
CHEMICALS & PLASTICS - 0.3%
Acetex Corp. 9 3/4%, 10/1/03 (i) B1 950 986
Atlantis Group, Inc. 11%, 2/15/03 B2 4,290 3,818
Methanex Corp.:
8 7/8%, 11/15/01 A3 25,455 28,276
yankee 7 3/4%, 8/15/05 Ba1 2,500 2,641
Pioneer Americas Acquisition Corp. 1st mtg.
13 3/8%, 4/1/05 (i) B2 6,240 6,614
Trans Resources, Inc. 14 1/2%, 9/1/96 B2 515 528
42,863
IRON & STEEL - 0.1%
GS Technologies Operating, Inc.
12 1/4%, 10/1/05 B2 6,300 6,332
Republic Engineered Steels, Inc.
9 7/8%, 12/15/01 B2 11,615 10,657
16,989
METALS & MINING - 0.1%
International Wire Group, Inc.
11 3/4%, 6/1/05 B3 6,390 6,246
Kaiser Aluminum & Chemical Corp.
12 3/4%, 2/1/03 B2 7,000 7,779
14,025
PACKAGING & CONTAINERS - 0.0%
Crown Packaging Holdings Ltd.
0%, 11/1/03 (e) Caa 8,160 3,611
Gaylord Container Corp. 0%, 5/15/05 (e) Caa 320 314
3,925
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.3%
Alto Parana euro 12%, 3/4/05 (o) - $ 2,460 $ 1,845
Chesapeake Corp.:
10 3/8%, 10/1/00 Baa3 2,700 3,175
9 7/8%, 5/1/03 Baa3 10,000 11,899
Great Northern Nekoosa Corp.
9 1/8%, 2/1/98 Baa2 7,800 8,309
Rapp International Finance Co. BV yankee
13 1/4%, 12/15/05 Ba3 7,320 7,347
Repap Wisconsin, Inc.:
9 1/4%, 2/1/02 B1 1,620 1,563
9 7/8%, 5/1/06 B3 3,160 3,026
Tembec Finance Corp. yankee
9 7/8%, 9/30/05 B1 8,210 7,758
Williamhouse Regency Deleware, Inc.
13%, 11/15/05 (i) B3 5,670 6,095
51,017
TOTAL BASIC INDUSTRIES 128,819
CONGLOMERATES - 0.2%
American Standard, Inc. 0%, 6/1/05 (e) B1 15,000 13,050
Jordan Industries, Inc.:
10 3/8%, 8/1/03 B3 7,460 6,714
0%, 8/1/05 (e) Caa 8,060 4,917
24,681
CONSTRUCTION & REAL ESTATE - 0.1%
CONSTRUCTION - 0.1%
WCI Communities LP 17%, 7/24/98 (h) - 15,330 15,330
DURABLES - 0.0%
TEXTILES & APPAREL - 0.0%
Leslie Fay Companies, Inc. (b)(h):
9.53%, 1/15/00 - 1,130 621
10.54%, 1/15/02 - 1,021 429
United States Leather, Inc. 10 1/4%, 7/31/03 B3 2,960 1,954
3,004
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - 0.3%
ENERGY SERVICES - 0.1%
Petroliam Nasional BHD yankee (i):
6 7/8%, 7/1/03 A1 $ 12,950 $ 13,470
7 1/8%, 8/15/05 A1 7,050 7,441
20,911
OIL & GAS - 0.2%
Elf Aquitaine yankee 7 3/4%, 5/1/99 Aa3 2,850 3,034
Harcor Energy, Inc., Series B, 14 7/8%, 7/15/02 B3 7,500 7,268
Transamerican Refining Corp. 16 1/2%,
2/15/02 (l) Caa 3,340 2,948
Transtexas Gas Corp. 11 1/2%, 6/15/02 B2 11,710 11,973
25,223
TOTAL ENERGY 46,134
FINANCE - 2.7%
ASSET-BACKED SECURITIES - 0.4%
Capital Auto Receivables Asset Trust
5.85%, 1/15/98 Aaa 4,307 4,306
Discover Card Trust 7 7/8%, 4/16/98 A2 2,750 2,759
Ford Credit Grantor Trust 5.90%, 10/15/00 Aaa 18,927 19,083
General Motors Acceptance Corp. Grantor
Trust 1995-A, 7.15%, 3/15/00 Aaa 12,874 13,154
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 3,172 3,183
Premier Auto Trust:
4.90%, 12/15/98 Aaa 1,264 1,259
4.95%, 2/2/99 A2 3,118 3,102
Standard Credit Card Master Trust I:
4.85%, 3/7/99 A2 7,800 7,759
7.65%, 2/15/00 A2 3,800 3,960
Union Federal Savings Bank Grantor Trust,
Series 1994-D Class B, 8.20%, 1/10/01 Baa2 1,593 1,646
60,211
BANKS - 1.3%
Bank of Boston Corp. 9 1/2%, 8/15/97 Baa1 5,298 5,621
Banponce Corp. 6 3/4%, 12/15/05 Baa2 20,000 20,226
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Citicorp:
euro 5.9375%, 7/10/97 (l) A2 $ 2,000 $ 1,997
8.80%, 2/1/00 A1 8,220 8,484
Corporacion Andina de Fomento yankee
7 1/4%, 4/30/98 (i) Baa2 5,900 6,025
First Fidelity Bancorp. 8 1/2%, 4/1/98 A2 7,485 7,948
First Maryland Bancorp. 10 3/8%, 8/1/99 Baa1 8,345 9,568
Firstar Corp. 7.15%, 9/1/00 A3 11,970 12,489
Fleet Financial Group, Inc. 7 5/8%, 12/1/99 A3 12,020 12,753
Hartford National Corp. 9.85%, 6/1/99 A3 2,000 2,244
Kansallis-Osake-Pankki 10%, 5/1/02 A3 5,285 6,349
Korea Development Bank 6 1/4%, 5/1/00 A1 6,000 6,084
Manufacturers Hanover Corp. 8 1/2%,
2/15/99 A2 160 173
Manufacturers Hanover Trust 5 1/4%,
4/30/97 (l) A1 500 498
Merchants National Corp. 9 7/8%, 10/1/99 A2 6,850 7,787
Midlantic Corp.:
9 7/8%, 12/1/99 A3 18,227 20,748
9.20%, 8/1/01 A3 11,550 13,192
Nationsbank Corp. 5 1/8%, 9/15/98 A2 2,000 1,987
Provident Bank 6 1/8%, 12/15/00 A3 27,500 27,762
Shawmut National Corp. 8 5/8%, 12/15/99 A3 7,440 8,174
Shawmut Corp.:
8 7/8%, 4/1/96 A2 1,840 1,848
8 1/8%, 2/1/97 A2 9,125 9,361
Signet Banking Corp.:
6%, 5/15/97 (l) Baa2 2,640 2,622
5.78516%, 4/15/98 (l) Baa2 6,210 6,140
9 5/8%, 6/1/99 Baa2 7,500 8,307
United Virginia Bankshares, Inc.
8 5/8%, 4/15/98 Baa1 1,522 1,616
210,003
CREDIT & OTHER FINANCE - 0.5%
Fleet Mortgage Group, Inc. 6 1/2%, 6/15/00 A3 3,900 3,999
Ford Motor Credit Co.:
5 5/8%, 3/3/97 A1 1,250 1,253
euro 8 5/8%, 1/24/00 A1 7,250 7,970
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
General Motors Acceptance Corp.:
8 3/8%, 5/1/97 A3 $ 2,650 $ 2,743
6 1/8%, 6/9/97 A3 28,500 28,805
8 5/8%, 6/15/99 A3 6,400 6,969
8%, 10/1/99 A3 6,200 6,671
Greyhound Financial Corp.:
8%, 1/15/97 Baa1 3,000 3,071
8 1/4%, 3/11/97 Baa1 2,150 2,215
6.95%, 1/28/98 Baa2 2,000 2,049
MCN Investment Corp. 5.84%, 2/1/99 A2 11,820 11,889
77,634
INSURANCE - 0.3%
American Financial Corp.:
9 3/4%, 4/20/04 Ba3 6,360 6,758
Series B, 9 3/4%, 4/20/04 Ba3 19,500 20,719
Metropolitan Life Insurance Co.
6.30%, 11/1/03 (i) Aa3 13,640 13,505
New York Life Insurance Co.
6.40%, 12/15/03 (i) Aa2 9,500 9,590
Ohio National Life Insurance Co.
8 7/8%, 7/15/04 (i) A3 5,940 6,751
57,323
SAVINGS & LOANS - 0.2%
First Nationwide Holdings, Inc.
9 1/8%, 1/15/03 (i) Ba3 470 482
Great Western Bank 10 1/4%, 6/15/20 A3 2,400 2,705
Great Western Financial Corp.
6 3/8%, 7/1/00 Baa 1,330 1,356
Home Savings of America 6%, 11/1/00 A3 10,500 10,566
USAT Holdings, Inc. 9.05%, 5/15/98 (i) Ba2 19,550 19,306
34,415
SECURITIES INDUSTRY - 0.0%
ECM Corp. extendible 14%, 6/1/02 (i) - 1,032 1,135
TOTAL FINANCE 440,721
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Specialty Equipment Companies, Inc.
11 3/8%, 12/1/03 B3 $ 10,000 $ 10,475
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 B3 2,790 2,818
10 3/4%, 11/1/03 Caa 8,819 8,863
22,156
MEDIA & LEISURE - 0.9%
BROADCASTING - 0.3%
Bell Cablemedia PLC yankee 0%,
9/15/05 (e) B2 13,700 9,025
Citicasters, Inc. 9 3/4%, 2/15/04 B- 7,813 7,969
Diamond Cable Communications PLC yankee
0%, 12/15/05 (e) B3 4,500 2,728
NWCG Holdings Corp. 0%, 6/15/99 Caa 10,135 7,095
Peoples Choice TV Corp. Unit 0%, 6/1/04 (e) Caa 8,250 5,239
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 4,270 4,270
Telewest PLC 0%, 10/1/07 (e) B1 4,010 2,471
Videotron Group Ltd. yankee
10 5/8%, 2/15/05 Ba3 2,950 3,230
Videotron Holdings PLC yankee
0%, 7/1/04 (e) B3 970 704
42,731
LEISURE DURABLES & TOYS - 0.1%
ICON Health and Fitness, Inc. 13%,
7/15/02 B3 5,050 5,606
IHF Holdings, Inc. 0%, 11/15/04 (e) Caa 10,225 6,595
12,201
LODGING & GAMING - 0.1%
Bally Gaming International, Inc.
10 3/8%, 7/15/98 - 4,500 4,635
GNF Corp., Series B, 10 5/8%, 4/1/03 B2 1,250 1,206
HMH Properties, Inc., Series B,
9 1/2%, 5/15/05 B1 7,030 7,241
Mohegan Tribal Gaming Authority
13 1/2%, 11/15/02 (i) - 3,520 4,048
President Riverboat Casinos 13%, 9/15/01 B1 7,695 6,156
23,286
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
PUBLISHING - 0.2%
K-III Communications Corp. 8 1/2%, 2/1/06 (i) Ba3 $ 1,540 $ 1,546
Marvel Holdings, Inc., Series B, 0%, 4/15/98 B3 9,955 7,591
Marvel Parent Holdings, Inc. 0%, 4/15/98 B3 11,535 8,680
News American Holdings, Inc.:
gtd. 9 1/8%, 10/15/99 Baa3 10,000 11,105
8 5/8%, 2/1/03 Baa3 3,805 4,285
33,207
RESTAURANTS - 0.2%
Darden Restaurants, Inc. 6 3/8%, 2/1/06 A3 5,810 5,807
Flagstar Corp. 10 7/8%, 12/1/02 B2 2,120 1,908
Host Marriott Travel Plazas, Inc., Series B,
9 1/2%, 5/15/05 B1 15,390 15,525
SC International Services, Inc. 13%, 10/1/05 B3 9,060 9,740
32,980
TOTAL MEDIA & LEISURE 144,405
NONDURABLES - 0.1%
FOODS - 0.1%
Dart and Kraft Finance NV gtd.
7 3/4%, 11/30/98 A2 7,239 7,637
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 3,250 3,656
Specialty Foods Corp.:
10 1/4%, 8/15/01 B3 565 531
Series B:
11 1/8%, 10/1/02 B3 1,020 974
11 1/4%, 8/15/03 Caa 1,020 847
13,645
HOUSEHOLD PRODUCTS - 0.0%
Revlon Consumer Products Corp.
10 1/2%, 2/15/03 B3 3,770 3,916
TOTAL NONDURABLES 17,561
RETAIL & WHOLESALE - 0.3%
APPAREL STORES - 0.2%
Apparel Retailers, Inc. 0%, 8/15/05 (e) Caa 8,170 4,739
Lamonts Apparel, Inc. 10 1/4%, 11/1/99 (b)(i) - 3,082 308
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Mothers Work, Inc. 12 5/8%, 8/1/05 B3 $ 10,210 $ 10,644
Specialty Retailers, Inc.:
10%, 8/15/00 B1 1,450 1,341
11%, 8/15/03 B3 5,110 4,522
Series D, 11%, 8/15/03 B- 10,000 8,850
30,404
GROCERY STORES - 0.1%
Eagle Food Centers, Inc. 8 5/8%, 4/15/00 B1 4,142 2,941
Food 4 Less Holdings, Inc. 0%,
7/15/05 (e) Caa 10,850 4,883
Ralph's Grocery Co.:
10.45%, 6/15/04 B1 1,610 1,606
11%, 6/15/05 B3 1,980 1,896
Star Markets, Inc. 13%, 11/1/04 B3 7,120 7,209
18,535
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Barry's Jewelers, Inc. 11%, 12/22/00 - 1,139 1,093
Finlay Fine Jewelry Corp. 10 5/8%, 5/1/03 B1 240 227
Town & Country Corp. 11 1/2%, 9/15/97 B3 1,370 1,274
2,594
TOTAL RETAIL & WHOLESALE 51,533
SERVICES - 0.1%
LEASING & RENTAL - 0.1%
GPA Delaware, Inc.:
8 1/2%, 3/3/97 - 5,700 5,586
gtd. 8 3/4%, 12/15/98 Caa 1,860 1,772
8 5/8%, 1/15/99 - 4,000 3,665
11,023
PRINTING - 0.0%
Big Flower Press:
10 3/4%, 8/1/03 B2 1,804 1,935
Class A, 10 3/4%, 8/1/03 B3 2,570 2,756
Class B, 10 3/4%, 8/1/03 B2 861 923
5,614
TOTAL SERVICES 16,637
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.2%
COMPUTERS & OFFICE EQUIPMENT - 0.2%
Comdisco, Inc.:
7 1/4%, 4/15/98 Baa2 $ 20,205 $ 20,886
9.28%, 6/5/00 Baa2 2,000 2,260
9.30%, 6/27/00 Baa2 2,000 2,265
9 1/4%, 7/6/00 Baa2 7,625 8,624
9 1/2%, 1/28/02 Baa2 2,580 2,990
37,025
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 3,500 3,620
9 1/2%, 7/15/98 Baa3 5,690 6,159
Trans World Airlines, Inc. 12%, 11/3/98 - 150 136
USAir:
Series 1993-A1, 8 5/8%, 9/1/98 B1 3,000 2,970
10 3/8%, 3/1/13 B1 4,610 4,541
United Airlines, Inc. 7.27%, 1/30/13 Baa1 12,130 12,130
29,556
RAILROADS - 0.0%
Transtar Holdings LP/Transtar Cap Corp.,
Series B, 0%, 12/15/03 (e) B- 9,742 6,722
TOTAL TRANSPORTATION 36,278
UTILITIES - 0.9%
CELLULAR - 0.1%
Comunicaciones Celulares SA Unit 0%,
11/15/03 (e)(i) B3 6,000 3,375
International Cabeltel, Inc. 0%,
2/1/06 (e)(i) - 14,350 8,359
11,734
ELECTRIC UTILITY - 0.4%
British Columbia Hydro & Power Authority
yankee 12 1/2%, 1/15/14 Aa2 6,830 8,348
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
El Paso Funding Corp. lease oblig. (b):
9 3/8%, 10/1/96 Ca $ 880 $ 623
9.20%, 7/2/97 Ca 430 304
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 5,000 5,052
7.30%, 7/15/99 Ba1 17,800 18,049
Public Service Co. of New Hampshire 1st mtg.
9.17%, 5/15/98 Ba1 4,020 4,260
Systems Energy Resources, Inc. 1st mtg.
10 1/2%, 9/1/96 Baa3 1,000 1,036
Texas Utilities Electric Co.:
1st mtg. & Collateral Trust 7 1/8%, 6/1/97 Baa2 3,000 3,067
6 3/8%, 8/1/97 Baa2 2,000 2,025
9 1/2%, 8/1/99 Baa2 2,000 2,205
Toledo Edison Co. secured 9.30%, 4/1/98 Ba2 8,500 8,723
United Illuminating Co.:
7 3/8%, 1/15/98 Baa3 4,000 4,099
9.76%, 1/2/06 Baa3 12,297 12,928
70,719
GAS - 0.4%
Southwest Gas Corp.:
Series F, 9 3/4%, 6/15/02 Baa3 20,650 24,335
9 3/8%, 2/1/17 Baa3 4,250 4,456
Transcontinental Gas Pipe Line Corp.:
extendible 6.21%, 5/15/00 Baa1 13,920 13,931
8 7/8%, 9/15/02 Baa1 3,265 3,708
Williams Holdings of Delaware, Inc.
6 1/4%, 2/1/06 Baa2 8,450 8,406
54,836
TOTAL UTILITIES 137,289
TOTAL NONCONVERTIBLE BONDS 1,123,705
TOTAL CORPORATE BONDS
(Cost $1,268,548) 1,300,464
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 11.6%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
U.S. TREASURY OBLIGATIONS - 9.5%
U.S. Treasury Bills, yields at date of purchase
5.03% to 5.04%, 4/25/96 to 5/2/96 - $ 300,560 $ 297,123
8 3/4%, 10/15/97 Aaa 30,495 32,368
5 1/8%, 3/31/98 Aaa 139,860 140,319
9 1/4%, 8/15/98 Aaa 175,000 192,390
9 1/8%, 5/15/99 Aaa 2,080 2,328
6 3/4%, 6/30/99 Aaa 1,190 1,250
7 3/4%, 12/31/99 Aaa 118,240 128,863
10 3/4%, 8/15/05 Aaa 450 618
11 3/4%, 2/15/10 Aaa 160,200 227,809
12 3/4%, 11/15/10 Aaa 17,910 27,228
13 7/8%, 5/15/11 Aaa 21,940 35,629
7 1/2%, 11/15/16 Aaa 500 582
8 7/8%, 2/15/19 Aaa 293,230 392,790
8 3/4%, 5/15/20 Aaa 230 306
12%, 8/15/23 Aaa 48,550 74,593
Stripped Principal 0%, 11/15/09 Aaa 250 110
1,554,306
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.1%
Federal Agricultural Mortgage Corp.:
6.64%, 2/10/99 Aaa 2,000 2,076
7.01%, 8/10/03 Aaa 1,040 1,123
7.01%, 8/10/04 Aaa 1,340 1,447
7.04%, 8/10/05 Aaa 5,100 5,555
Federal Farm Credit Bank
6.32%, 9/9/02 Aaa 6,545 6,799
6.40%, 10/3/02 Aaa 3,200 3,328
Federal Home Loan Bank 6.52%, 4/24/97 Aaa 7,120 7,238
Federal Home Loan Mortgage Corp.:
4.78%, 2/10/97 (callable) Aaa 4,750 4,730
7.14%, 7/31/02 Aaa 300 311
Federal National Mortgage Association:
7%, 7/13/98 (f) Aaa 6,880 7,169
5.45%, 10/10/03 Aaa 8,500 8,331
7.40%, 7/1/04 Aaa 3,600 3,966
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Government Trust Certificates:
(assets of Trust guaranteed by U.S.
Government through Defense Security
Assistance Agency):
Class 1-C 9 1/4%, 11/15/01 Aaa $ 4,952 $ 5,518
Class 2-E 9.40%, 5/15/02 Aaa 13,630 15,254
Class 3-B 8.55%, 11/15/97 Aaa 6,108 6,241
Class T-2 9 5/8%, 5/15/02 Aaa 20,230 22,608
(assets of Trust guaranteed by U.S.
Government through Export-Import Bank):
Series 1992-A, 7.02%, 9/1/04 Aaa 4,622 4,881
Series 1994-A, 7.39%, 6/26/06 Aaa 1,606 1,729
Series 1994-C, 6.61%, 9/15/99 Aaa 2,308 2,358
Series 1994-F, 8.178%, 12/15/04 Aaa 12,723 13,913
Series 1995-A, 6.28%, 6/15/04 Aaa 24,140 24,736
Israel Export Trust Certificate (assets of Trust
guaranteed by U.S. Government through
Export-Import Bank) Series 1994-1,
6.88%, 1/26/03 Aaa 6,868 7,130
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
7 3/4%, 4/1/98 Aaa 2,028 2,083
4 7/8%, 9/15/98 Aaa 11,520 11,434
6%, 2/15/99 Aaa 2,140 2,186
7 3/4%, 11/15/99 Aaa 31,010 33,323
5 3/4%, 3/15/00 Aaa 11,655 11,793
8%, 11/15/01 Aaa 24,910 27,751
6 1/4%, 8/15/02 Aaa 33,570 34,771
6 1/8%, 3/15/03 Aaa 7,210 7,381
6 5/8%, 2/15/04 Aaa 3,530 3,707
8 1/2%, 4/1/06 Aaa 3,390 3,894
6.80%, 2/15/12 Aaa 2,210 2,331
Private Export Funding Corp. secured:
9.10%, 10/30/98 Aaa 4,895 5,365
9 1/2%, 3/31/99 Aaa 2,690 2,995
6.90%, 1/31/03 Aaa 1,350 1,442
8 3/4%, 6/30/03 Aaa 1,835 2,151
5.80%, 2/1/04 Aaa 1,910 1,930
6.86%, 4/30/04 Aaa 3,987 4,174
Series II, 8.40%, 7/31/01 Aaa 1,445 1,634
Series LL, 7.90%, 3/31/00 Aaa 2,275 2,482
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Student Loan Marketing Association
7.56%, 12/9/96 Aaa $ 3,130 $ 3,191
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 11,375 12,939
Tennessee Valley Authority 4.60%, 12/15/96 Aaa 5,625 5,596
340,994
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,823,189) 1,895,300
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 8.5%
FEDERAL HOME LOAN MORTGAGE CORP. - 0.0%
8%, 10/1/16 to 4/1/20 Aaa 4,315 4,479
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.8%
5 1/2%, 12/1/01 (j) Aaa 20,000 19,756
5 1/2 %, 9/1/00 to 9/1/02 Aaa 2,944 2,905
6%, 1/1/01 to 2/1/11 (j) Aaa 176,000 164,806
6%, 2/1/11 (j)(k) Aaa 110,000 109,209
6%, 3/1/01 to 12/1/25 Aaa 50,436 50,134
6 1/2%, 1/1/24 to 10/1/25 . Aaa 21,160 20,937
7%, 1/1/24 to 11/1/25 Aaa 83,546 84,303
7 1/2%, 8/1/07 to 5/1/08 Aaa 6,106 6,301
8%, 6/1/07 to 10/1/10 Aaa 3,261 3,409
8 1/2%, 1/1/09 to 7/1/21 Aaa 100 105
10%, 8/1/17 Aaa 173 191
462,056
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.7%
6%, 1/15/11 (j) Aaa 53,000 52,835
6%, 2/15/11 Aaa 8,000 7,975
6 1/2%, 6/15/02 to 8/15/25 Aaa 29,643 29,459
7%, 10/15/17 to 1/15/2 Aaa 316,440 320,677
7 1/2%, 2/15/22 to 11/15/25 Aaa 195,151 201,151
8%, 4/15/00 to 12/15/25 Aaa 256,798 267,727
8 1/2%, 11/15/05 to 7/15/23 Aaa 10,725 11,276
9%, 3/15/10 to 1/15/25 Aaa 2,297 2,459
9 1/2%, 7/15/09 to 11/15/24 Aaa 3,306 3,594
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - CONTINUED
10%, 10/15/10 to 1/15/26 Aaa $ 24,964 $ 27,621
10%, 10/15/19 to 1/15/25 Aaa 132 145
11%, 3/15/10 to 5/15/19 Aaa 4,488 5,110
930,029
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $1,376,682) 1,396,564
COMMERCIAL MORTGAGE SECURITIES - 1.0%
ACP Mortgage LP commercial floater Series E,
7.631374%, 2/28/28 (i)(l) BB 2,385 1,879
American Southwest Financial Securities
commercial floater Series 1994-C2 Class B2,
9.917%, 8/25/10 (i)(l) - 3,000 2,970
CBA Mortgage Corp. commercial floater
Series 1993-C1 Class E, 7.153921%,
12/25/03 (i)(l) Ba2 3,169 2,553
CBM Funding Corp. commercial Series 1996-1 (i):
Class A-1, 7.55%, 7/1/99 AA 2,080 2,139
Class C, 7.86%, 2/1/08 BBB 12,500 12,887
CS First Boston Mortgage Securities Corp.:
commercial floater Series 1994-CFB1 Class E,
8.0145%, 1/25/28 (i)(l) Ba2 2,809 2,314
commercial Series 1995-AEWI Class A-1,
6.665%, 11/25/27 AAA 11,216 11,384
commercial floater Series 1995-AEWI Class E,
9.086556%, 11/25/97 (i)(l) - 3,000 2,615
commercial Series 1995-WF1 Class A-2,
6.648%, 12/21/27 AAA 31,981 32,301
Kearny Street Mortgage (i):
commercial floater Series 1995-1
Class E, 7.73631%, 2/20/30 (l) BB 4,000 3,325
commercial Class II-B, 6.60%, 10/15/02 - 6,700 6,740
commercial Class II-C, 7.30%, 10/15/03 - 2,800 2,822
commercial Class II-D, 7 3/4%, 10/15/05 - 1,800 1,816
Lennar Central Partners LP commercial Series
1995-1 Class F, 11.70%, 5/15/05 (i) - 2,400 2,424
Morgan Stanley Capital commercial Series
1995-TNE Class D2, 8.24%, 12/15/23 (i) Ba3 2,000 1,773
COMMERCIAL MORTGAGE SECURITIES - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
Oregon pass thru certificates commercial
floater Series 1995 Class 1-E, 9.96705%,
6/25/26 (i)(l) BB $ 3,208 $ 2,855
Phoenix Real Estate Securities, Inc.
commercial Series 1993 Class D-1,
8 1/4%, 11/25/23 (i) Ba2 3,500 3,119
Resolution Trust Corp.:
commercial Series 1994-C1
Class E, 8%, 6/25/26 BB 3,646 3,163
commercial Series 1994-C2:
Class A-2, 7 3/4%, 4/25/25 AAA 930 934
Class A-4, 7 1/2%, 4/25/25 AAA 370 371
Class E, 8%, 4/25/25 BB+ 3,388 3,238
commercial Series 1995-C1:
Class A-2A, 6 1/4%, 2/25/27 Aaa 4,559 4,554
Class A-4A, 6 1/4%, 2/25/27 Aaa 8,315 8,362
Class D, 7%, 5/25/27 Baa2 4,239 4,175
Class F, 6.90%, 2/25/27 B1 915 807
SML, Inc. commercial Series 1994-C1 Class C,
9.20%, 9/18/99 (h) - 2,450 1,629
SKW Real Estate LP (i):
commercial Class A, 6.45%, 4/15/02 (f) AA 3,111 3,115
commercial Series II:
Class B, 6.90%, 4/15/02 (f) A 5,610 5,628
Class C, 7.45%, 4/15/03 BBB 11,856 11,908
Structured Asset Securities Corp.:
commercial Series 1992-M1 Class C,
7.05%, 11/25/02 B2 3,200 2,652
commercial Series 1993-C1 Class A-1,
6.60%, 10/25/24 AA+ 3,817 3,831
commercial Series 1995-C1:
Class A-1A, 7 3/8%, 9/25/24 AAA 6,066 6,200
Class E, 7 3/8%, 9/25/24 (i) BB 4,000 3,065
commercial Series 1995-C4 Class A-1A,
6.90%, 6/25/26 AAA 10,115 10,272
Whitehall Partners commercial Series 1995-C1
Class E, 8.01%, 7/20/25 (i) - 2,970 2,824
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $167,979) 172,644
FOREIGN GOVERNMENT OBLIGATIONS (M) - 0.3%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
Manitoba Province Canada:
yankee 6%, 10/15/97 A1 $ 5,000 $ 5,060
6 3/4%, 3/1/03 A1 5,000 5,205
Ontario Province yankee:
7 3/4%, 6/4/02 Aa3 6,000 6,610
15 1/8%, 5/1/11 Aa3 2,000 2,157
15 3/4%, 3/15/12 Aa3 9,400 10,932
Province of Chaco, Argentina 11 7/8%,
9/10/97 (h) - 3,200 3,358
Victorian Public Authorities Finance Agency:
8.45%, 10/1/01 Aa2 6,700 7,564
8 1/4%, 1/15/02 Aa2 2,000 2,243
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $42,088) 43,129
SUPRANATIONAL OBLIGATIONS - 0.2%
African Development Bank:
6 3/4%, 7/30/99 Aa1 10,200 10,568
9.30%, 7/1/00 Aa1 15,000 17,086
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $26,709) 27,654
PURCHASED BANK DEBT - 0.0%
Leslie Fay Companies, Inc. (b):
noteholder payment 134 73
revolving loan 1,012 557
term loan 1,299 714
TOTAL PURCHASED BANK DEBT
(Cost $1,987) 1,344
REPURCHASE AGREEMENTS - 5.1%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.88% dated
1/31/96 due 2/1/96 $ 833,917 833,781
PURCHASED OPTIONS - 0.5%
AMOUNTS IN THOUSANDS EXPIRATION DATE/ UNDERLYING FACE VALUE
STRIKE PRICE AMOUNT AT VALUE (NOTE 1)
(000S) (000S)
400,000 J. Aron and Co. OTC Put
Options on Japanese Yen Feb. 96/91.89 $ 343,386 $ 55,360
210,000 Swiss Bank Corp. OTC Put
Options on Japanese Yen Mar. 96/97.33 190,950 17,850
280,000 Swiss Bank Corp. OTC Put
Options on Japanese Yen Jul. 96/110.00 287,743 4,424
TOTAL PURCHASED OPTIONS
(Cost $37,466) 77,634
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $14,494,313) $ 16,338,187
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
GBP - British pound
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. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
5. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
6. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
7. Affiliated company (see Note 7 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)
Ampex Corp. 8% 2/16/95 $ 1,355
FF Holdings Corp. 10/2/92 to $ 159
1/14/94
Food 4 Less Holdings,
Inc. (warrants) 12/30/92 $ 428
Gulf Canada
Resources Ltd. 10/15/93 $ 117
Leslie Fay Companies, Inc.:
9.53%, 1/15/00 7/19/93 $ 856
10.54%, 1/15/02 7/19/93 to $ 675
11/11/93
Live Entertainment, Inc.:
$2.00 (warrants) 3/23/93 $ 230
$2.72 (warrants) 3/23/93 $ 241
Province of Chaco,
Argentina 11 7/8%,
9/10/97 3/9/94 $ 3,356
SML, Inc. commercial
Series 1994-C1
Class C,
9.20%, 9/18/99 8/11/94 $ 1,593
Terex Corp. (rights) 7/29/92 $ -
WCI Communities LP
17%, 7/24/98 7/24/95 $ 14,812
9. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $439,897,000 or 2.7% of net
assets.
10. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
11. Security sold on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
12. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
13. 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.
14. Purchased on an installment basis. Market value reflects only those
payments made through January 31, 1996. The remaining installments
aggregating CAD 5,874,000 are due
September 23, 1996 and March 24, 1997.
15. Non-income producing - issuer in default of principal and interest
payments.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 22.0% AAA, AA, A 20.9%
Baa 1.6% BBB 2.5%
Ba 0.8% BB 1.3%
B 1.7% B 1.8%
Caa 0.3% CCC 0.1%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.5% 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 81.5%
Japan 7.4
United Kingdom 3.2
Netherlands Antilles 2.5
Canada 1.3
France 1.3
Others (individually less than 1%) 2.8
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1996, the aggregate cost of investment securities for income
tax purposes was $14,495,519,000. Net unrealized appreciation aggregated
$1,842,668,000, of which $2,142,428,000 related to appreciated investment
securities and $299,760,000 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) JANUARY 31, 1996
ASSETS
Investment in securities, at value (including repurchase $ 16,338,187
agreements of $833,781) (cost $14,494,313) -
See accompanying schedule
Commitment to sell securities on a delayed delivery $ (109,209)
basis
Receivable for securities sold on a delayed delivery 108,676 (533)
basis
Receivable for investments sold, regular delivery 141,745
Cash 63
Receivable for fund shares sold 29,601
Dividends receivable 11,957
Interest receivable 74,332
Other receivables 5,351
TOTAL ASSETS 16,600,703
LIABILITIES
Payable for investments purchased 135,161
Regular delivery
Delayed delivery 345,424
Payable for fund shares redeemed 27,866
Accrued management fee 6,689
Other payables and accrued expenses 3,824
Collateral on securities loaned, at value 22,717
TOTAL LIABILITIES 541,681
NET ASSETS $ 16,059,022
Net Assets consist of:
Paid in capital $ 13,867,427
Distributions in excess of net investment income (22,774)
Accumulated undistributed net realized gain (loss) on 371,153
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 1,843,216
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 931,048 shares outstanding $ 16,059,022
NET ASSET VALUE, offering price and redemption price per $17.25
share ($16,059,022 (divided by) 931,048 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1996
INVESTMENT INCOME $ 112,772
Dividends (including $8,315 received from affiliated
issuers)
Interest (including income on securities loaned of $153) 179,580
TOTAL INCOME 292,352
EXPENSES
Management fee $ 38,233
Transfer agent fees 15,492
Accounting and security lending fees 422
Non-interested trustees' compensation 25
Custodian fees and expenses 491
Registration fees 514
Audit 91
Legal 50
Miscellaneous 8
Total expenses before reductions 55,326
Expense reductions (716) 54,610
NET INVESTMENT INCOME 237,742
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of $1,523 580,057
on sales of investment in affiliated issuers)
Foreign currency transactions 73,537 653,594
Change in net unrealized appreciation (depreciation) on:
Investment securities 221,703
Assets and liabilities in foreign currencies 18,647
Delayed delivery commitments (533) 239,817
NET GAIN (LOSS) 893,411
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,131,153
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JULY 31,
JANUARY 31, 1995
1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ 237,742 $ 431,287
Net investment income
Net realized gain (loss) 653,594 130,192
Change in net unrealized appreciation (depreciation) 239,817 1,062,780
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,131,153 1,624,259
FROM OPERATIONS
Distributions to shareholders (238,427) (340,712)
From net investment income
From net realized gain (389,356) (540,172)
TOTAL DISTRIBUTIONS (627,783) (880,884)
Share transactions 1,985,353 3,938,809
Net proceeds from sales of shares
Reinvestment of distributions 594,250 826,084
Cost of shares redeemed (1,410,623) (2,020,911)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,168,980 2,743,982
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,672,350 3,487,357
NET ASSETS
Beginning of period 14,386,672 10,899,315
End of period (including distributions in excess $ 16,059,022 $ 14,386,672
of net investment income of $22,774 and
$22,089, respectively)
OTHER INFORMATION
Shares
Sold 117,706 253,871
Issued in reinvestment of distributions 35,399 53,552
Redeemed (83,810) (129,845)
Net increase (decrease) 69,295 177,578
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31,
ENDED JANUARY
31,
1996 1995 1994 F 1993 D 1992 1991
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 16.69 $ 15.93 $ 16.59 $ 15.22 $ 13.75 $ 13.08
beginning of period
Income from .27 .42 .46 .72 .88 E .75
Investment
Operations
Net investment
income
Net realized and 1.00 1.53 .88 2.14 1.37 .72
unrealized gain
(loss)
Total from 1.27 1.95 1.34 2.86 2.25 1.47
investment
operations
Less Distributions (.27) (.44) (.51) (.80) (.78) (.80)
From net investment
income
From net realized (.44) (.75) (1.49) (.69) - -
gain
Total distributions (.71) (1.19) (2.00) (1.49) (.78) (.80)
Net asset value, $ 17.25 $ 16.69 $ 15.93 $ 16.59 $ 15.22 $ 13.75
end of period
TOTAL RETURN B, C 7.77% 13.03% 8.60% 20.29% 16.96% 11.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 16,059 $ 14,387 $ 10,899 $ 7,828 $ 5,578 $ 4,942
period (in millions)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Ratio of expenses to .73% A .77% .80% .74% .64% .66%
average net assets
Ratio of expenses to .72% A, .77% .79% .74% .64% .66%
average net assets G G
after expense
reductions
Ratio of net 3.15% A 3.50% 4.00% 4.89% 6.23% 5.94%
investment income
to average net
assets
Portfolio turnover rate 94% A 76% 74% 76% 102% 108%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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 ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1996
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 financial statements have been prepared
in conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
accrued as earned. Investment income is recorded net of foreign taxes
withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, foreign currency transactions, market
discount, defaulted bonds, partnerships, non-taxable dividends and losses
deferred due to wash sales. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Distributions in excess of net investment
income and accumulated undistributed net realized gain (loss) on
investments and foreign currency transactions may include temporary book
and tax basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. 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.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock market and to fluctuations in
currency values. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. The underlying face
amount at value is shown in the schedule of investments under the
caption"Purchased Options." 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
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $23,729,000 or
0.1% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $6,954,007,000 and $6,827,203,000, respectively, of which U.S.
government and government agency obligations aggregated $3,824,984,000 and
$3,491,191,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. 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.
SALES LOAD. For the period January 1, 1993 to December 31, 1995, Fidelity
Distributors Corporation, an affiliate of FMR and the general distributor
of the fund, voluntarily waived the sales charge (2% of the offering price)
on the sales of shares. Effective January 1, 1996, the fund's sales charge
was eliminated.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
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. For the
period, the transfer agent fees were equivalent to an annualized rate of
.21% of average net assets.
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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,647,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $21,812,000 and
$22,717,000, respectively.
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
$306,000 under this arrangement.
In addition, the fund has entered into certain arrangements with its
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's custody and transfer agent fees were reduced by $60,000
and $350,000, respectively, under these arrangements.
7. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
AMETEK, Inc. $ 5,154 $ - $ 180 $ 55,772
Berkley (W.R.) Corp. - 4,773 87 47,738
Betz Laboratories, Inc. - - 837 93,553
Brinker International, Inc. 12,981 - - 63,604
Caliber System, Inc. - - - 90,036
EG & G, Inc. 725 1,146 449 70,101
Filene's Basement Corp. - - - 4,939
Fingerhut Companies, Inc. 1,608 - 75 32,841
Fleetwood Enterprises, Inc. 774 - 359 61,052
Heilig-Meyers Co. 46,019 - - 50,236
Helmerich & Payne, Inc. 5,381 - 168 49,074
Ideon Group, Inc. - - 255 27,122
Jostens, Inc. - 987 905 46,147
7. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Kelley Oil & Gas Corp. $ - $ - $ - $ 5,438
Mac Frugals Bargains
Closeouts, Inc. - - - 20,617
Nalco Chemical Co. 14,047 - 1,785 120,837
Rawlings Sporting Goods, Inc. - - - 6,057
Roadway Express, Inc. - - - 13,032
Russell Corp. 1,289 - - 55,393
Safety Kleen Corp. 9,961 - 347 60,518
Snap-on Tools Corp. 11,618 - 1,488 127,659
Sotheby's Holdings, Inc. Class A - - 238 29,469
Sunbeam-Oster, Inc. 3,919 - - 71,472
Unifi, Inc. 23,707 - 1,142 102,528
TOTALS $ 137,183 $ 6,906 $ 8,315 $ 1,305,235
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, 1996, and the related statement of
operations for the six months then ended, the statements of changes in net
assets for the six months then ended and for the year ended July 31, 1995
and the financial highlights for the six months ended January 31, 1996 and
for each of the five years in the period ended July 31, 1995. 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, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Puritan Trust: Fidelity Puritan Fund as of January 31, 1996,
the results of its operations for the six months then ended, the changes in
its net assets for the six months then ended and for the year ended July
31, 1995, financial highlights for the six months ended January 31, 1996
and for each of the five years in the period then ended July 31, 1995, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
March 8, 1996
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
William J. Hayes, Vice President
Richard B. Fentin, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 31, 1996
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 32 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 36 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return figure includes changes in a fund's share price, plus reinvestment
of any dividends (or income) and capital gains (the profits the fund earns
when it sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Balanced 5.67% 15.92% 72.05% 156.08%
S&P 500(registered trademark) 14.54% 38.66% 113.54% 244.52%
Lehman Brothers Aggregate Bond 7.25% 16.95% 56.38% n/a
Index
Balanced Funds Average 9.48% 25.96% 82.14% 159.04%
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 invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to
performance of the Standard & Poor's Composite Index of 500 Stocks - a
common proxy for the U.S. stock market - and the performance of the Lehman
Brothers Aggregate Bond Index, a broad measure of the bond market. To
measure how the fund's performance stacked up against its peers, you can
compare it to the balanced funds average, which reflects the performance of
250 balanced funds with similar objectives tracked by Lipper Analytical
Services over the past six months. These benchmarks include reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Balanced 15.92% 11.46% 10.71%
S&P 500 38.66% 16.38% 14.32%
Lehman Brothers Aggregate Bond Index 16.95% 9.35% n/a
Balanced Funds Average 25.96% 12.68% 10.80%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking the arithmetic
average. This may produce a slightly different figure than that obtained by
averaging the fund's cumulative total returns and annualizing the result.)
$10,000 OVER LIFE OF FUND
Balanced (304) S&P 500 LB Agg Bond
11/30/86 10000.00 10000.00 10000.00
12/31/86 9970.56 9745.00 10038.18
01/31/87 10490.68 11057.65 10179.36
02/28/87 10765.46 11494.43 10249.95
03/31/87 10942.82 11826.62 10203.75
04/30/87 10675.43 11721.36 9923.96
05/31/87 10625.92 11823.34 9885.13
06/30/87 10845.17 12420.42 10021.18
07/31/87 10995.11 13050.13 10013.48
08/31/87 11135.05 13536.90 9959.89
09/30/87 10945.73 13240.44 9747.80
10/31/87 10019.00 10388.45 10094.98
11/30/87 9864.55 9532.44 10175.83
12/31/87 10166.90 10257.86 10314.45
01/31/88 10648.05 10689.72 10677.02
02/29/88 10951.39 11187.86 10803.76
03/31/88 10854.98 10842.15 10702.37
04/30/88 10939.87 10962.50 10644.61
05/31/88 10982.31 11057.87 10573.06
06/30/88 11420.26 11565.43 10828.15
07/31/88 11355.68 11521.48 10771.35
08/31/88 11301.86 11129.75 10799.59
09/30/88 11572.03 11603.88 11044.09
10/31/88 11746.70 11926.47 11252.01
11/30/88 11637.53 11755.92 11115.32
12/31/88 11771.18 11961.65 11127.83
01/31/89 12172.85 12837.24 11287.94
02/28/89 12083.59 12517.59 11206.12
03/31/89 12217.63 12809.25 11254.57
04/30/89 12613.58 13474.05 11490.09
05/31/89 12896.39 14019.75 11792.02
06/30/89 13089.00 13939.84 12151.06
07/31/89 13604.77 15198.61 12409.36
08/31/89 13685.00 15496.50 12225.50
09/30/89 13695.74 15432.96 12288.07
10/31/89 13742.16 15074.92 12590.96
11/30/89 13951.08 15382.45 12710.97
12/31/89 14091.15 15751.63 12744.98
01/31/90 13570.63 14694.69 12593.53
02/28/90 13669.77 14884.25 12633.96
03/31/90 13781.31 15278.69 12643.27
04/30/90 13592.87 14896.72 12527.43
05/31/90 14045.13 16349.15 12898.35
06/30/90 14107.61 16237.98 13105.31
07/31/90 14145.80 16186.01 13286.59
08/31/90 13547.38 14722.80 13109.16
09/30/90 13326.05 14005.80 13217.61
10/31/90 13261.49 13945.57 13385.42
11/30/90 13726.35 14846.46 13673.55
12/31/90 14025.60 15260.67 13886.61
01/31/91 14606.15 15926.04 14058.27
02/28/91 15265.87 17064.75 14178.27
03/31/91 15557.86 17477.72 14275.81
04/30/91 15811.81 17519.66 14430.47
05/31/91 16319.71 18276.51 14514.86
06/30/91 16022.99 17439.45 14507.48
07/31/91 16442.51 18252.13 14708.66
08/31/91 16821.43 18684.70 15026.95
09/30/91 16964.60 18372.67 15331.45
10/31/91 17344.09 18618.86 15502.15
11/30/91 17034.87 17868.52 15644.29
12/31/91 17781.87 19912.68 16108.90
01/31/92 17781.87 19542.31 15889.75
02/29/92 18041.04 19796.35 15993.07
03/31/92 17926.03 19410.33 15902.91
04/30/92 18144.64 19980.99 16017.78
05/31/92 18479.84 20078.90 16320.03
06/30/92 18421.89 19779.72 16544.63
07/31/92 18864.37 20588.71 16882.18
08/31/92 18967.62 20166.64 17053.20
09/30/92 19098.85 20404.61 17255.34
10/31/92 19007.32 20476.03 17026.57
11/30/92 19053.08 21174.26 17030.42
12/31/92 19194.74 21434.70 17301.23
01/31/93 19616.43 21614.75 17633.00
02/28/93 20147.44 21908.71 17941.67
03/31/93 20789.95 22370.99 18016.43
04/30/93 21453.45 21829.61 18141.89
05/31/93 21801.01 22414.64 18164.99
06/30/93 21818.20 22479.65 18494.19
07/31/93 22105.70 22389.73 18598.79
08/31/93 22824.46 23238.30 18924.79
09/30/93 22604.67 23059.36 18976.77
10/31/93 22788.72 23536.69 19047.68
11/30/93 22387.15 23313.09 18885.64
12/31/93 22894.97 23595.18 18988.00
01/31/94 23510.52 24397.42 19244.37
02/28/94 23100.16 23736.25 18910.03
03/31/94 22152.04 22701.35 18443.82
04/30/94 21962.12 22991.92 18296.54
05/31/94 21996.65 23368.99 18293.97
06/30/94 21769.75 22796.45 18253.55
07/31/94 22187.06 23544.18 18616.12
08/31/94 22395.72 24509.49 18639.22
09/30/94 22238.25 23909.00 18364.88
10/31/94 21975.59 24446.96 18348.52
11/30/94 21660.40 23556.60 18307.77
12/31/94 21678.30 23905.94 18434.19
01/31/95 21678.30 24525.82 18799.01
02/28/95 22154.55 25481.60 19245.97
03/31/95 22527.17 26233.56 19364.05
04/30/95 22758.67 27006.14 19634.54
05/31/95 23186.07 28085.57 20394.34
06/30/95 23439.13 28738.00 20543.86
07/31/95 23781.43 29690.95 20497.98
08/31/95 23835.48 29765.47 20745.36
09/30/95 24050.66 31021.58 20947.19
10/31/95 23832.02 30910.83 21219.60
11/30/95 24506.16 32267.82 21537.57
12/31/95 24909.04 32889.29 21839.83
01/31/96 25130.13 34008.85 21984.86
$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, 1996, the value of your investment would have
grown to $25,130 - a 151.30% 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 $34,009 - a 240.09% increase.
If you'd put $10,000 in the bond index, it would have grown to $21,985 - a
119.85% 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. For the six months ended January 31, 1996, the fund had a total return
of 5.67%. That trailed the balanced funds average tracked by Lipper
Analytical Services, which returned 9.48% during the same period. For the
12 months ended January 31, 1996, the fund returned 15.92%, while the
balanced funds average had a total return of 25.96%.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THAT OF THE BALANCED FUNDS AVERAGE?
A. Because of factors involving the fund's equity component. The fund
lagged as a result of owning value-oriented stocks of small- and mid-sized
U.S. companies rather than the large-capitalization U.S. stocks that were
among the best performing stocks in the world over the past six months. In
addition, currency had a negative impact. The fund maintained about a 10%
stake in Japanese securities. While the fund's Japanese investments did
well, the fund didn't benefit. That's because the yen depreciated versus
the dollar, so the gains realized by these investments weren't translated
into dollar-based gains. In addition, the fund allocated more in bonds than
many other balanced funds. The fund's investment objective calls for high
income with preservation of capital. That's why I invested heavily in
bonds, which performed well, but not as well as stocks.
Q. WHAT WAS THE REASON BEHIND THE FUND'S BIAS TOWARD SMALL-CAP AND MID-CAP
STOCKS?
A. I follow a value-oriented approach to picking stocks, looking for those
that are cheap when measured by yardsticks such as cash flow or current
earnings. I do so because it can lower risk and mitigate volatility. Over
the period, large-cap stocks generally were selling at very high valuations
- - stock prices compared to other measures such as earnings - while small-
and mid-cap stocks offered better values. In a typical rally, such as the
stock market has seen over the past year, large-cap stocks tend to go up
first, followed by smaller stocks. Since large-company stocks were already
mostly overvalued, I believed it was safer to invest in smaller,
attractively valued U.S. stocks, which had greater potential for gain.
Q. WAS THERE A PARTICULAR THEME TO YOUR EQUITY INVESTMENTS?
A. I invested a fair amount in cyclical stocks - those that tend to rise
and fall with the economy. Specifically, I focused part of the portfolio on
aluminum and nickel stocks such as Inco and Reynolds Metals. These
companies have tended to do well at the end of economic cycles. It appears
I invested in these companies too early, because while inventories kept
going down and demand continued to exceed supply, the price of the metals
and business prospects of the companies didn't improve as much as we
expected. While the U.S. economy appears to have slowed, if any of the
major world economies pick up substantially - as it appears is happening in
Japan - I believe this industry should be well-positioned. That's because
aluminum and nickel are global commodities and the industry is global in
scope.
Q. WHAT HAS BEEN THE APPEAL OF JAPANESE STOCKS?
A. I found that equities in Japan offered the best value over the period.
Prices were more depressed and the economy seemed to be closer to recovery
than in Europe and elsewhere. Although foreign investments typically add
more risk, I found stocks in Japan offered a combination of superior
earnings growth potential and superior value. In addition, several factors
helped Japanese companies and the economy. Short-term interest rates were
extremely low and bond yields dropped significantly. I felt that these
decreases - coupled with the Japanese government's move to increase
spending - created a positive backdrop for economic growth. In addition,
the weaker yen made Japanese products more competitive globally.
Q. WHAT CHANGES HAVE YOU MADE TO THE STRUCTURE OF THE FUND?
A. Over the past six months, the fund slowly raised its weighting in stocks
because of the positive influence of the Federal Reserve Board interest
rate cuts that started in July. At the end of the period, the fund's assets
were allocated closer than they were six months ago to the targets I
typically try to maintain - 60% stocks and 40% bonds. I also tried to
reduce risk by diversifying overseas, namely in Japanese blue chip stocks,
and by maintaining a position in convertible securities. The convertible
security investments - including one the fund holds in Occidental Petroleum
- - were intended to increase the current yield and provide an element of
protection. In periods of flat stock performance, current dividends augment
any capital gain. Furthermore, I sought to own a slightly higher
dividend-paying mix of stocks, although the market at the end of the period
was one of the lowest dividend-yielding markets in history. These stocks
included Bell Atlantic, one of the Baby Bell telephone companies whose
positive performance was sparked by anticipation of the telecommunications
legislation that passed shortly after the end of the period. Positive
performance also was turned in by Philip Morris, a shareholder-oriented
company that experienced solid earnings growth and increased its dividend.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. I hope that over the next six months the fund's Japanese investments
begin to flower. Over the past six months, they've blossomed, but that's
been somewhat hidden by the currency movement. In the U.S. market, the
outlook is somewhat positive because the Fed has continued to reduce rates
and strong inflows have helped push the market higher. But there has been a
long run with barely any correction. I believe it would be historically
impossible to project another period without any kind of downward move. So
I approach the next six months with caution, expecting more volatility. And
while the bond markets have had a good run they will need fresh evidence of
economic weakness - which quells inflation fears - or they could be at risk
as well.
FUND FACTS
GOAL: to provide high income
with preservation of capital
while also considering the
potential for growth of capital
START DATE: November 6, 1986
SIZE: as of January 31, 1996,
more than $4.9 billion
MANAGER: Robert Haber, since
July 1988; manager, Fidelity
Global Balanced Fund, since
1993; Fidelity Advisor Income
& Growth Fund, since 1987;
Fidelity Advisor Annuity
Income & Growth Fund, since
January 1995; joined Fidelity
in 1985
(checkmark)
BOB HABER ON THE STRENGTH OF
THE STOCK MARKET:
"We have come through an
unprecedented period of
strength in the U.S. stock
market. It has been more than
five years since the Standard &
Poor's Composite Index of 500
Stocks has experienced a
correction of 12%, longer than
any period since 1945. It also
has been 13 years since a
year's low on the S&P 500 fell
below the previous year's low,
again the longest period in
history for that type of
occurrence. Finally, the Dow
Jones Industrial Average
didn't experience a single
decline of 3.5% or more in
1995; that's the lowest single
decline in a calendar year for
this century. These are
among the statistics - along
with high stock prices,
shrinking earnings growth and
reduced dividend yields -
that lead me to believe it is
prudent to expect a correction
at some point; by nature,
historically, that's the way that
the markets have worked."
(solid bullet) The manager has focused
the fund's bond investments
on investment grade
government issues, mainly
Treasuries and agency notes.
He has reduced investments
over the period in corporate
bonds and mortgage-backed
securities because of
weakness in the economy
and because he found neither
asset class represented good
value.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Bell Atlantic Corp. 2.3 1.2
Omron Corp. 1.2 0.6
Philip Morris Companies, Inc. 1.2 0.0
Caterpillar, Inc. 1.0 0.8
Occidental Petroleum Corp. Indexed $3.00 1.0 1.4
TOP FIVE BONDS AS OF JANUARY 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
(BY ISSUER, WITH MATURITIES OF MORE THAN ONE YEAR) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE BONDS
6 MONTHS AGO
U.S. Treasury Obligations 33.7 25.8
Federal National Mortgage Association 2.1 3.9
Carnival Cruise Lines, Inc. 1.2 1.1
Government National Mortgage Association 0.7 2.5
Inco Ltd. 0.7 0.2
</TABLE>
TOP FIVE MARKET SECTORS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Basic Industries 7.6 12.0
Technology 6.1 5.6
Finance 6.0 7.4
Utilities 5.6 4.7
Energy 3.9 8.2
ASSET ALLOCATION
AS OF JANUARY 31, 1996 * AS OF JULY 31, 1995 **
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 43.4
Row: 1, Col: 5, Value: 28.4
Row: 1, Col: 6, Value: 20.0
Stocks and
equity futures 35.1%
Bonds 48.2%
Convertible
securities 10.9%
Short-term
investments 5.8%
Other
investments 0.0%
FOREIGN
INVESTMENTS 18.3%
Stocks and
equity futures 49.4%
Bonds 43.3%
Convertible
securities 7.4%
Short-term
investments -1.1%
Other
investments 1.0%
FOREIGN
INVESTMENTS 16.4%
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 5.8
Row: 1, Col: 3, Value: 10.9
Row: 1, Col: 4, Value: 48.2
Row: 1, Col: 5, Value: 30.0
Row: 1, Col: 6, Value: 5.1
*
**
INVESTMENTS JANUARY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 40.6%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.2%
AEROSPACE & DEFENSE - 0.4%
Aviall, Inc. 82,800 $ 704
Flightsafety International, Inc. 272,800 13,606
Harsco Corp. 8,600 532
Teleflex, Inc. 122,500 4,931
19,773
DEFENSE ELECTRONICS - 0.8%
Litton Industries, Inc. (a) 733,400 36,120
Watkins-Johnson Co. 42,600 1,640
37,760
TOTAL AEROSPACE & DEFENSE 57,533
BASIC INDUSTRIES - 5.9%
CHEMICALS & PLASTICS - 2.7%
Albemarle Corp. 464,100 8,644
du Pont (E.I.) de Nemours & Co. 226,100 17,381
Fuller (H.B.) Co. 90,200 3,270
IMC Fertilizer Group, Inc. 245,800 9,218
International Specialty Products, Inc. 391,400 4,550
Nippon Shokubai Co. Ltd. 1,474,000 15,690
Praxair, Inc. 611,000 20,774
Rohm & Haas Co. 103,500 7,167
Sekisui Chemical Co. Ltd. 3,426,000 46,064
Valspar Corp. 34,900 1,544
Witco Corp. 2,200 70
134,372
IRON & STEEL - 0.4%
Kobe Steel (a) 3,698,000 11,567
NKK Corp. (a) 1,588,000 4,522
Nucor Corp. 14,500 843
Yodogawa Steel Works Ltd. (warrants) (a) 2,140 3,504
20,436
METALS & MINING - 2.7%
Aluminum Co. of America 12,700 705
Belden, Inc. 36,600 1,007
Capral Aluminum Ltd. 9,194,010 19,884
Comalco Ltd. 1,123,523 5,320
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
METALS & MINING - CONTINUED
Eramet SA 141,840 $ 9,247
Falconbridge Ltd. 1st Installment Receipt (h) 5,722,400 51,043
IMCO Recycling, Inc. 74,300 1,560
Inco Ltd. 481,800 16,796
Kaiser Aluminum Corp. (a) 39,200 544
QNI Ltd. 8,478,800 16,819
Reynolds Metals Co. 39,500 2,113
Sherritt, Inc. 331,100 4,279
Wolverine Tube, Inc. (a) 164,900 5,875
135,192
PAPER & FOREST PRODUCTS - 0.1%
Albany International Corp. Class A 281,500 5,208
Pentair, Inc. 12,200 641
5,849
TOTAL BASIC INDUSTRIES 295,849
CONGLOMERATES - 0.8%
Crane Co. 177,400 7,029
Harris Corp. 316,100 19,796
Mark IV Industries, Inc. 494,600 10,325
Textron, Inc. 60,600 4,765
41,915
CONSTRUCTION & REAL ESTATE - 2.5%
BUILDING MATERIALS - 0.6%
Kurimoto Ltd. 574,000 6,003
Lafarge Corp. 92,100 1,715
Masco Corp. 32,000 936
National House Industrial Co. Ltd. 323,000 5,821
Ply-Gem Industries, Inc. 349,000 5,453
Sherwin-Williams Co. 51,600 2,174
Tostem Corp. 159,000 5,226
Vulcan Materials Co. 900 52
27,380
CONSTRUCTION - 0.5%
American Buildings Co. (a) 14,300 323
Daiwa House Industry Co. Ltd. 484,000 7,683
Daiwa House Industry Co. Ltd. (warrants) (a) 25,800 10,320
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
Sekisui House Ltd. (warrants) (a) 900 $ 2,003
Webb (Del E.) Corp. 361,300 6,774
27,103
ENGINEERING - 0.1%
EG & G, Inc. 233,800 5,202
REAL ESTATE INVESTMENT TRUSTS - 1.3%
American Health Properties, Inc. 7,000 166
Beacon Properties Corp. 141,600 3,522
CBL & Associates Properties, Inc. 94,200 1,931
Cali Realty Corp. 185,200 4,005
CenterPoint Properties Corp. 82,700 1,964
Colonial Properties Trust (SBI) 52,700 1,298
Equity Residential Properties Trust (SBI) 195,700 6,018
First Industrial Realty Trust, Inc. 18,000 414
Franchise Finance Corp. of America 296,300 6,704
Highwoods Properties, Inc. 83,700 2,553
LTC Properties, Inc. 403,800 6,612
Liberty Property Trust (SBI) 246,700 5,458
National Golf Properties, Inc. 247,100 5,776
Shurgard Storage Centers, Inc. 53,900 1,455
Sovran Self Storage, Inc. 99,900 2,597
Speiker Properties, Inc. 391,500 9,836
Starwood Lodging Trust combined certificate (SBI) 70,400 2,262
Storage USA, Inc. 69,700 2,196
Weeks Corp. 28,000 735
65,502
TOTAL CONSTRUCTION & REAL ESTATE 125,187
DURABLES - 2.2%
AUTOS, TIRES, & ACCESSORIES - 1.8%
Borg-Warner Automotive, Inc. 139,800 4,054
Chrysler Corp. 123,900 7,155
Dana Corp. 50,900 1,673
General Motors Corp. 392,900 20,676
Genuine Parts Co. 56,300 2,505
Johnson Controls, Inc. 244,400 17,658
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Pep Boys-Manny, Moe & Jack 91,100 $ 2,642
Snap-on Tools Corp. 300,700 13,193
TRW, Inc. 77,100 6,515
Toyota Motor Corp. 593,000 12,735
88,806
HOME FURNISHINGS - 0.3%
Heilig-Meyers Co. 171,100 2,652
Leggett & Platt, Inc. 302,400 7,258
Miller (Herman), Inc. 162,100 5,187
15,097
TEXTILES & APPAREL - 0.1%
Guilford Mills, Inc. 26,300 562
Kellwood Co. 94,700 1,326
Mohawk Industries, Inc. (a) 164,800 2,245
Unifi, Inc. 1,000 22
4,155
TOTAL DURABLES 108,058
ENERGY - 2.1%
ENERGY SERVICES - 0.6%
Nabors Industries, Inc. (a) 970,200 11,764
Production Operators Corp. 143,100 4,883
Weatherford Enterra, Inc. (a) 450,700 13,408
30,055
OIL & GAS - 1.5%
Amoco Corp. 57,600 4,054
Atlantic Richfield Co. 220,100 25,009
Chieftain International, Inc. (a) 284,500 5,127
Coastal Corp. (The) 484,700 18,358
Mobil Corp. 22,700 2,514
Phillips Petroleum Co. 66,800 2,179
Santa Fe Energy Resources, Inc. (a) 1,609,400 15,490
Wascana Energy, Inc. (a) 173,900 1,614
74,345
TOTAL ENERGY 104,400
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 3.0%
BANKS - 0.7%
Chemical Banking Corp. 237,200 $ 15,892
Fuji Bank (a) 367,000 8,327
Sakura Bank Ltd. 900,000 10,336
34,555
CREDIT & OTHER FINANCE - 0.1%
Beneficial Corp. 147,700 7,219
INSURANCE - 0.9%
ACE Ltd. 175,400 7,740
Allmerica Financial Corp. 10,000 266
American Financial Group, Inc. 104,100 3,383
Capital RE Corp. 29,700 898
Liberty Corp. (The) 152,100 5,304
Old Republic International Corp. 165,000 5,796
USLife Corp. 644,200 20,695
44,082
SECURITIES INDUSTRY - 1.3%
Daiwa Securities Co. Ltd. 3,056,000 45,655
Kokusai Securities Co. Ltd. 215,000 3,312
Lehman Brothers Holdings, Inc. 149,500 3,831
New Japan Securities (a) 604,000 3,925
Nomura Securities Co. Ltd. 119,000 2,578
Wako Securities (a) 725,000 6,194
65,495
TOTAL FINANCE 151,351
HEALTH - 2.7%
DRUGS & PHARMACEUTICALS - 0.0%
Warner-Lambert Co. 26,500 2,484
MEDICAL EQUIPMENT & SUPPLIES - 1.6%
Baxter International, Inc. 464,400 21,130
Bergen Brunswig Corp. Class A 468,900 12,367
Cardinal Health, Inc. 162,100 9,665
McKesson Corp. 124,100 6,205
St. Jude Medical, Inc. (a) 646,450 28,525
77,892
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 1.1%
Foundation Health Corp. (a) 138,100 $ 5,973
Horizon/CMS Healthcare Corp. 87,200 2,387
Tenet Healthcare Corp. (a) 120,400 2,574
United HealthCare Corp. 556,900 35,015
Vencor, Inc. 212,300 8,094
54,043
TOTAL HEALTH 134,419
INDUSTRIAL MACHINERY & EQUIPMENT - 3.4%
ELECTRICAL EQUIPMENT - 1.3%
California Microwave Corp. (a) 175,100 3,261
Mitsubishi Electric Co. Ord. 318,000 2,301
Omron Corp. 2,706,000 59,628
65,190
INDUSTRIAL MACHINERY & EQUIPMENT - 1.5%
Allied Products Corp. 91,900 2,045
Briggs & Stratton Corp. 2,000 88
Caterpillar, Inc. 809,200 52,092
Dover Corp. 8,000 365
IDEX Corp. 71,300 2,709
Parker-Hannifin Corp. 27,700 945
Timken Co. 338,400 14,001
Toro Co. 73,800 2,565
74,810
POLLUTION CONTROL - 0.6%
Browning-Ferris Industries, Inc. 876,500 25,857
Safety Kleen Corp. 46,200 693
WMX Technologies, Inc. 69,000 2,061
Zurn Industries, Inc. 31,600 707
29,318
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 169,318
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 0.9%
BROADCASTING - 0.1%
American Telecasting, Inc. (a) 87,700 $ 1,316
CAI Wireless Systems, Inc. (a) 181,500 1,815
Heartland Wireless Communications, Inc. (a) 39,700 1,126
US Satellite Broadcasting Co., Inc. Class A 5,100 138
4,395
LEISURE DURABLES & TOYS - 0.5%
Brunswick Corp. 1,050,300 23,763
LODGING & GAMING - 0.3%
Bally Entertainment Corp. 238,900 3,225
Grand Casinos, Inc. (a) 393,600 11,759
Resort Hotels PLC (a) 62,500 -
14,984
TOTAL MEDIA & LEISURE 43,142
NONDURABLES - 2.3%
BEVERAGES - 0.3%
Anheuser-Busch Companies, Inc. 30,800 2,141
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 15,470,900 7,537
Panamerican Beverages, Inc. Class A 91,900 3,630
13,308
FOODS - 0.2%
Dole Food, Inc. 214,400 7,986
HOUSEHOLD PRODUCTS - 0.5%
Clorox Co. 91,000 7,519
First Brands Corp. 333,500 16,467
Stanhome, Inc. 117,300 3,138
27,124
TOBACCO - 1.3%
Philip Morris Companies, Inc. 632,400 58,813
RJR Nabisco Holdings Corp. 170,000 5,525
64,338
TOTAL NONDURABLES 112,756
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
PRECIOUS METALS - 1.6%
Barrick Gold Corp. 371,500 $ 10,888
Coeur d'Alene Mines Corp. 233,400 5,310
Echo Bay Mines Ltd. 1,177,848 15,116
Hecla Mining Co. (a) 966,600 8,337
Pegasus Gold, Inc. (a) 849,800 13,613
Placer Dome, Inc. 360,700 10,145
Western Mining Holdings Ltd. 3,094,520 19,062
82,471
RETAIL & WHOLESALE - 2.3%
APPAREL STORES - 0.1%
Talbots, Inc. 182,100 5,031
DRUG STORES - 0.1%
Rite Aid Corp. 111,700 3,588
GENERAL MERCHANDISE STORES - 0.5%
Consolidated Stores Corp. (a) 25,600 512
Ito-Yokado Co. Ltd. 463,000 26,327
26,839
GROCERY STORES - 0.5%
Albertson's, Inc. 219,400 7,487
Vons Companies, Inc. (a) 660,300 19,561
27,048
RETAIL & WHOLESALE, MISCELLANEOUS - 1.1%
Duty Free International, Inc. 72,000 1,053
Fingerhut Companies, Inc. 77,000 1,049
Pier 1 Imports, Inc. 1,741,200 20,459
Tandy Corp. 376,400 14,397
Uny Co. Ltd. 963,000 17,983
54,941
TOTAL RETAIL & WHOLESALE 117,447
SERVICES - 0.4%
PRINTING - 0.2%
Deluxe Corp. 245,100 7,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - 0.2%
CDI Corp. (a) 99,900 $ 2,148
Interim Services, Inc. (a) 74,500 2,775
National Service Industries, Inc. 159,100 5,549
10,472
TOTAL SERVICES 17,672
TECHNOLOGY - 5.1%
COMMUNICATIONS EQUIPMENT - 0.0%
Westell Technologies, Inc. Class A (a) 3,000 71
COMPUTER SERVICES & SOFTWARE - 1.0%
Automatic Data Processing, Inc. 227,000 9,052
BancTec, Inc. (a) 507,700 9,139
ECI Telecom Ltd. 874,900 18,810
Landmark Graphics Corp. (a) 73,100 1,517
SunGard Data Systems, Inc. (a) 370,900 11,034
49,552
COMPUTERS & OFFICE EQUIPMENT - 2.7%
Canon, Inc. 1,869,000 35,251
Compaq Computer Corp. (a) 63,000 2,969
International Business Machines Corp. 316,800 34,452
Pitney Bowes, Inc. 203,500 9,208
Ricoh Co. Ltd. Ord. 3,517,000 37,436
Seagate Technology 247,300 14,653
133,969
ELECTRONIC INSTRUMENTS - 0.4%
Measurex Corp. 325,700 9,649
Teradyne, Inc. (a) 458,100 10,135
19,784
ELECTRONICS - 1.0%
Altera Corp. 30,300 1,996
AMP, Inc. 94,100 3,670
DH Technology, Inc. (a) 27,700 623
Nitto Denko Corp. 2,511,000 36,340
Nichicon Corp. 498,000 7,207
Wako Electric Co. Ltd. 1,000 21
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Xilinx, Inc. (a) 57,800 $ 2,233
Zilog, Inc. 14,800 538
52,628
TOTAL TECHNOLOGY 256,004
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
AMR Corp. 36,200 2,751
Atlantic Southeast Airlines, Inc. 111,600 2,058
4,809
UTILITIES - 4.1%
GAS - 0.4%
Aquila Gas Pipeline Corp. 193,700 2,470
Enron Corp. 502,300 18,585
21,055
TELEPHONE SERVICES - 3.7%
Ameritech Corp. 348,300 20,942
Bell Atlantic Corp. 1,634,100 112,549
Frontier Corp. 178,400 5,307
MCI Communications Corp. 90,900 2,602
Southern New England Telecommunications Corp. 18,100 724
Telebras sponsored ADR 112,400 6,266
Telebras PN (Pfd. Reg.) 648,413,000 36,132
184,522
TOTAL UTILITIES 205,577
TOTAL COMMON STOCKS
(Cost $1,900,766) 2,027,908
PREFERRED STOCKS - 4.2%
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - 3.7%
BASIC INDUSTRIES - 1.0%
METALS & MINING - 1.0%
Alumax, Inc., Series A, $4.00 133,033 $ 17,444
Kaiser Aluminum Corp. $0.97 981,400 13,617
Reynolds Metals Co. $3.31 369,500 18,336
49,397
PAPER & FOREST PRODUCTS - 0.0%
International Paper Co.:
$2.625 (e) 8,700 415
$2.625 34,900 1,675
2,090
TOTAL BASIC INDUSTRIES 51,487
ENERGY - 1.5%
OIL & GAS - 1.5%
Occidental Petroleum Corp. Indexed $3.00 848,900 51,571
Santa Fe Energy Resources, Inc. $0.732 508,300 5,083
Unocal Corp. $3.50 (e) 379,400 20,393
77,047
FINANCE - 0.4%
BANKS - 0.3%
Barnett Banks, Inc., Series A, $4.50 (g) 118,200 13,002
SAVINGS & LOANS - 0.1%
Glendale Federal Bank, Series E, $2.1875 81,300 3,577
TOTAL FINANCE 16,579
NONDURABLES - 0.8%
TOBACCO - 0.8%
RJR Nabisco Holdings Corp., Series C, depositary shares
representing 1/10 pfd 6,122,100 40,559
TOTAL CONVERTIBLE PREFERRED STOCKS 185,672
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.5%
UTILITIES - 0.5%
ELECTRIC UTILITY - 0.5%
Gulf States Utilities Co. $1.75 308,500 $ 7,443
Long Island Lighting Co. $1.98 217,350 5,325
Public Service Co. of New Hampshire Co., Series A 385,575 10,073
22,841
TOTAL PREFERRED STOCKS
(Cost $200,702) 208,513
CORPORATE BONDS - 8.3%
MOODY'S PRINCIPAL
RATINGS (C) AMOUNT (B) (000S)
CONVERTIBLE BONDS - 3.7%
BASIC INDUSTRIES - 0.7%
METALS & MINING - 0.7%
Inco Ltd. 5 3/4%, 7/1/04 Baa2 $ 24,360 33,130
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Lafarge Corp. 7%, 7/1/13 Baa2 3,920 4,038
DURABLES - 0.0%
TEXTILES & APPAREL - 0.0%
Unifi, Inc. 6%, 3/15/02 Baa1 290 294
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
Investor AB 8%, 6/1/01 (g) A- SEK 53,246 10,669
INSURANCE - 0.0%
RLI Corp. 6%, 7/15/03 Baa3 470 509
TOTAL FINANCE 11,178
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
CONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 1.7%
ENTERTAINMENT - 1.2%
Carnival Cruise Lines, Inc. 4 1/2%, 7/1/97 (g) Baa1 $ 40,371 $ 62,121
RESTAURANTS - 0.5%
Wendy's International, Inc. 7%, 4/1/06 (g) Baa3 13,495 22,537
TOTAL MEDIA & LEISURE 84,658
RETAIL & WHOLESALE - 0.4%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.4%
Lowe's Companies, Inc. 3%, 7/22/03 A3 9,055 11,058
Price Co. 6 3/4%, 3/1/01 Baa1 8,150 8,374
19,432
TECHNOLOGY - 0.6%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Canon, Inc. 1.30%, 12/19/08 A JPY 1,654,000 21,003
ELECTRONICS - 0.2%
Nitto Denko Corp. 3.90%, 3/30/ 01 Baa1 JPY 637,000 7,405
TOTAL TECHNOLOGY 28,408
TRANSPORTATION - 0.0%
TRUCKING & FREIGHT - 0.0%
Airborne Freight Corp. 6 3/4%, 8/15/01 Ba1 1,810 1,855
TOTAL CONVERTIBLE BONDS 182,993
NONCONVERTIBLE BONDS - 4.6%
ENERGY - 0.3%
ENERGY SERVICES - 0.2%
Petroliam Nasional BHD yankee
6 7/8%, 7/1/03 (e) A1 8,670 9,019
OIL & GAS - 0.1%
McDermott, Inc. 7.95%, 7/7/97 Baa3 5,000 5,145
TOTAL ENERGY 14,164
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - 2.4%
ASSET-BACKED SECURITIES - 0.6%
Capital Auto Receivables Asset Trust,
5.85%, 1/15/98 Aaa $ 2,070 $ 2,070
Discover Card Master Trust I:
7 7/8%, 4/16/98 A2 1,540 1,545
6.90%, 2/16/00 A2 4,500 4,601
KeyCorp Auto Grantor Trust 5.80%, 7/15/00 A3 1,670 1,675
Premier Auto Trust 4.90%, 12/15/98 Aaa 948 944
Standard Credit Card Master Trust I:
8 1/4%, 10/7/97 A2 5,025 5,124
4.85%, 3/7/99 A2 5,200 5,172
7.65%, 2/15/00 A2 2,300 2,397
5 1/2%, 9/7/98 participation certificates A2 2,800 2,806
Union Federal Savings Bank Grantor Trust:
Series 1994-C Class B, 7.275%, 11/10/00 Baa2 1,495 1,516
Series 1994-D Class B, 8.20%, 1/10/01 Baa2 956 987
28,837
BANKS - 0.7%
Chase Manhattan Corp. 7 1/2%, 12/1/97 A2 2,100 2,177
Citicorp euro 5.9375%, 7/10/97 (i) A2 1,000 999
Corporacion Andina De Fomento:
euro 7 1/4%, 4/30/98 Baa3 800 817
yankee 7 1/4%, 4/30/98 (e) Baa2 5,900 6,025
Firstar Corp. 7.15%, 9/1/00 A3 6,210 6,479
Korea Development Bank 6 1/4%, 5/1/00 A1 4,150 4,208
Merita Bank Ltd. yankee 6 1/2%, 1/15/06 A3 1,000 1,004
Signet Banking Corp.:
5.78516%, 4/15/98 (i) Baa2 3,750 3,708
9 5/8%, 6/1/99 Baa2 4,469 4,950
Zions Bancorporation 8 5/8%, 10/15/02 BBB- 6,000 6,784
37,151
CREDIT & OTHER FINANCE - 0.8%
Chrysler Financial Corp. 10.34%, 5/15/08 A3 1,600 1,620
Ford Motor Credit Co. euro 8 5/8%, 1/24/00 A1 3,766 4,140
General Motors Acceptance Corp.:
7.40% 5/20/97 A3 3,300 3,385
7 1/8%, 5/23/97 A3 2,250 2,301
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
General Motors Acceptance Corp. - continued
7%, 6/2/97 A3 $ 8,000 $ 8,173
6 3/4%, 2/25/98 A3 5,000 5,131
5 7/8%, 1/12/99 A3 8,000 8,060
Greyhound Financial Corp.
8 1/4%, 3/11/97 Baa1 2,000 2,060
6.95%, 1/28/98 Baa2 1,250 1,281
Union Acceptance Corp. Series 1995-B,
7.075%, 7/10/02 Baa2 2,169 2,198
Westinghouse Credit Corp.:
8.98%, 6/15/98 Ba1 2,000 2,067
8.85%, 7/26/99 Ba1 1,300 1,363
41,779
INSURANCE - 0.3%
Metropolitan Life Insurance Co.
6.30%, 11/1/03 (e) Aa3 9,390 9,297
Ohio National Life Insurance Co.
8 7/8%, 7/15/04 (e) A3 4,030 4,580
13,877
TOTAL FINANCE 121,644
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.0%
Circus Circus Enterprises 6.45%, 2/1/06 - 1,000 998
PUBLISHING - 0.1%
News America Holdings, Inc. 8 5/8%, 2/1/03 Baa3 4,180 4,707
TOTAL MEDIA & LEISURE 5,705
NONDURABLES - 0.1%
FOODS - 0.1%
Dart and Kraft Finance NV
7 3/4%, 11/30/98 A2 XEU 3,750 3,956
Ralcorp Holdings, Inc. 8 3/4%, 9/15/04 Ba1 1,000 1,125
5,081
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.4%
COMPUTERS & OFFICE EQUIPMENT - 0.4%
Comdisco, Inc.:
7.82%, 2/5/97 Baa2 $ 2,000 $ 2,043
7 1/4%, 4/15/98 Baa2 7,000 7,236
9.45%, 6/8/00 Baa2 6,000 6,819
9.30%, 6/27/00 Baa2 3,750 4,246
20,344
ELECTRONICS - 0.0%
Texas Instruments, Inc. 6 1/8%, 2/1/06 A3 1,400 1,390
TOTAL TECHNOLOGY 21,734
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.3%
AMR Corp.:
7 3/4%, 12/1/97 Baa3 2,030 2,100
9 1/2%, 7/15/98 Baa3 4,000 4,330
Delta Air, Inc. pass thru trust
9 7/8%, 4/30/08 Baa2 5,056 5,850
United Air Lines pass thru trust
7.27%, 1/30/13 Baa1 2,750 2,750
TOTAL TRANSPORTATION 15,030
UTILITIES - 1.0%
ELECTRIC UTILITY - 0.6%
British Columbia Hydro & Power Authority gtd.
15%, 4/15/11 Aa2 2,225 2,379
Gulf States Utilities Co. 1st mortgage
6 3/4%, 10/1/98 Baa3 1,000 1,008
Long Island Lighting Co.:
8 3/4%, 5/1/96 Baa3 10,908 11,022
7.30%, 7/15/99 Ba1 3,000 3,042
Public Service Co. of New Hampshire 1st mtg.
9.17%, 5/15/98 Ba1 7,685 8,144
Texas Utilities Electric Co.:
7 1/8%, 6/1/97 Baa2 2,000 2,045
9 1/2%, 8/1/99 Baa2 1,000 1,102
28,742
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
GAS - 0.4%
Southwest Gas Corp.:
9 3/4%, 6/15/02 Baa3 $ 8,700 $ 10,253
9 3/8%, 2/1/17 Baa3 4,000 4,194
Transcontinental Gas Pipe Line Corp.
6.21%, 5/15/00 Baa1 4,300 4,303
18,750
TOTAL UTILITIES 47,492
TOTAL NONCONVERTIBLE BONDS 230,850
TOTAL CORPORATE BONDS
(Cost $404,539) 413,843
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 35.4%
U.S. TREASURY OBLIGATIONS - 33.7%
8 1/2%, 7/15/97 (k) Aaa 4,505 4,727
8 3/4%, 10/15/97 Aaa 1,300 1,380
8 1/4%, 7/15/98 Aaa 1,400 1,503
5 1/4%, 7/31/98 Aaa 750 754
9 1/4%, 8/15/98 Aaa 38,145 41,936
4 3/4%, 8/31/98 Aaa 550 546
8 7/8%, 2/15/99 Aaa 1,150 1,271
9 1/8%, 5/15/99 Aaa 1,893 2,119
6 3/4%, 6/30/99 Aaa 2,450 2,573
6 7/8%, 7/31/99 Aaa 900 949
7 1/2%, 10/31/99 Aaa 900 970
7 3/4%, 11/30/99 Aaa 1,175 1,279
7 3/4%, 12/31/99 Aaa 26,270 28,630
7 3/4%, 1/31/00 Aaa 1,200 1,309
7 1/4%, 8/15/04 Aaa 565 628
7 7/8%, 11/15/04 Aaa 1,475 1,705
10 3/4%, 8/15/05 Aaa 1,560 2,142
5 7/8%, 11/15/05 Aaa 770 786
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
U.S. TREASURY OBLIGATIONS - CONTINUED
11 3/4%, 2/15/10 Aaa $ 122,940 $ 174,824
12 3/4%, 11/15/10 Aaa 1,960 2,980
13 7/8%, 5/15/11 Aaa 48,990 79,555
8 7/8%, 8/15/17 Aaa 4,375 5,820
9%, 11/15/18 Aaa 60,970 82,462
8 3/4%, 8/15/20 Aaa 134,935 179,738
7 1/4%, 2/15/23 Aaa 465,070 527,055
6 1/4%, 8/15/23 Aaa 103,700 105,677
7 1/2%, 11/15/24 Aaa 141,250 167,977
7 5/8%, 2/15/25 Aaa 193,847 234,675
6 7/8%, 8/15/25 Aaa 26,074 29,101
1,685,071
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.7%
Federal Agricultural Mortgage Corp.:
7.01%, 2/10/05 Aaa 1,530 1,657
7.04%, 8/10/05 Aaa 2,400 2,614
Federal National Mortgage Association
7%, 7/13/98 (d) Aaa 3,690 3,845
Government Trust Certificates
(assets of Trust guaranteed by
U.S. Government through Defense
Security Assistance Agency):
Class G-2, 8%, 5/15/98 Aaa 5,211 5,362
Class T-2, 9 5/8%, 5/15/02 Aaa 2,960 3,308
Class 1-C, 9 1/4%, 11/15/01 Aaa 2,617 2,916
(assets of Trust guaranteed by U.S.
Government through Export-Import Bank):
Series 1992-A, 7.02%, 9/01/04 Aaa 3,209 3,388
Series 1994-C, 6.61%, 9/15/99 Aaa 1,213 1,240
Series 1994-F, 8.178%, 12/15/04 Aaa 8,482 9,275
Private Export Funding Corp. secured:
9.10%, 10/30/98 Aaa 3,060 3,354
9 1/2%, 3/31/99 Aaa 1,440 1,603
8 3/4%, 6/30/03 Aaa 4,655 5,456
6.86%, 4/30/04 Aaa 2,049 2,145
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
7 3/4%, 4/1/98 Aaa 1,497 1,537
6%, 2/15/99 Aaa 1,420 1,451
7 3/4%, 11/15/99 Aaa 8,448 9,078
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
State of Israel (guaranteed by U.S. Government
through Agency for International Development): - continued
5 3/4%, 3/15/00 Aaa $ 6,650 $ 6,729
8%, 11/15/01 Aaa 3,440 3,832
6 1/4%, 8/15/02 Aaa 7,140 7,396
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 6,270 7,132
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 83,318
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,696,753) 1,768,389
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 2.7%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.0%
5 1/2%, 11/1/08 to 4/1/09 Aaa 14,170 13,814
6%, 12/1/00 to 9/1/02 Aaa 28,852 28,896
6%, 1/1/11 (f) Aaa 10,000 9,928
6 1/2%, 7/1/08 to 1/1/26 Aaa 18,019 17,874
7%, 11/1/22 to 6/1/24 Aaa 25,052 25,302
7 1/2%, 7/1/07 to 4/1/08 Aaa 3,446 3,555
8%, 9/1/17 Aaa 401 420
99,789
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 0.7%
6 1/2%, 10/15/23 to 5/15/24 Aaa 12,921 12,841
7%, 5/15/22 to 10/15/23 Aaa 8,646 8,771
8%, 1/15/17 to 6/15/17 Aaa 126 132
8 1/2%, 8/15/06 to 12/15/21 Aaa 3,803 3,997
9%, 7/15/16 to 2/15/25 Aaa 7,533 7,991
9 1/2%, 7/15/09 to 11/15/24 Aaa 1,845 2,006
35,738
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $132,395) 135,527
COMMERCIAL MORTGAGE SECURITIES - 0.4%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
Oregon pass thru certificates commercial
Series 1995 Class 1-A, 7.15%, 6/25/26 (e) AAA $ 4,867 $ 4,928
Resolution Trust Corp. commercial Series:
1994-C2 Class A-2, 7 3/4%, 4/25/25 AAA 612 614
1994-C2 Class A-4, 7 1/2%, 4/25/25 AAA 243 244
1995-C1 Class A-2A, 6 1/4%, 2/25/27 Aaa 2,441 2,438
1995-C1 Class A-4A, 6 1/4%, 2/25/27 Aaa 3,126 3,144
SKW Real Estate LP (d)(e):
commercial floater
Class A, 6.45%, 4/15/02 AA 1,714 1,716
commercial Series II
Class B, 6.90%, 4/15/02 A 3,300 3,310
Structured Asset Securities Corp.:
commercial Series 1995-C1 Class A-1A,
7 3/8%, 9/25/24 AAA 2,988 3,054
commercial Series 1993-C1 Class A-1,
6.60%, 10/25/24 AA+ 2,508 2,517
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $21,608) 21,965
FOREIGN GOVERNMENT SECURITIES (J) - 0.1%
Ontario Province yankee 15 3/4%, 3/15/12
(Cost $6,027) Aa3 5,000 5,815
SUPRANATIONAL OBLIGATIONS - 0.1%
African Development Bank 7 3/4%, 12/15/01
(Cost $2,979) Aa1 3,000 3,273
MUNICIPAL SECURITIES - 0.0%
Louisiana Pub. Facs. Auth. Rev. 9.95%, 6/1/96
(Cost $2,115) A3 2,000 2,027
REPURCHASE AGREEMENTS - 7.2%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.88% dated
1/31/96 due 2/1/96 $ 362,864 362,805
PURCHASED OPTIONS - 1.0%
EXPIRATION DATE/ UNDERLYING FACE VALUE
STRIKE PRICE AMOUNT AT VALUE (NOTE 1)
320,000 J. Aron and Co. OTC Put Option Mar. 96/
on Japanese Yen 93.10 $ 278,326 $ 40,320
72,000 Swiss Bank Corp. OTC Put Option Mar. 96/
on Japanese Yen 93.58 62,946 8,561
152,600 Goldman Sachs & Co. Put Options
on U.S. Treasury bonds, Feb. 96/
6 7/8%, 8/15/25 109.4375 170,387 310
4,550 Lehman Brothers Put Options
on U.S. Treasury bonds, Feb. 96/
7 5/8%, 2/15/25 118.921875 5,508 375
TOTAL PURCHASED OPTIONS
(Cost $23,720) 49,566
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $4,754,409) $ 4,999,631
SECURITIES SOLD SHORT
AMOUNTS IN THOUSANDS
NUMBER OF SHARES ISSUER VALUE
222 Barnett Banks, Inc. $ 12,976
2,319 Carnival Corp. Class A 62,602
343 Investor AB Free shares B 10,907
1,095 Wendy's International, Inc. 22,580
TOTAL SECURITIES SOLD SHORT
(Total proceeds $90,010) $ 109,065
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.2%
FUTURES CONTRACTS
AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
807 S&P 500 Contracts Mar. 1996 $ 257,413 $ 9,206
328 Midcap 400 Contracts Mar. 1996 36,334 612
1,162 Nikkei 225 Contracts Mar. 1996 121,487 8,506
$ 18,324
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 8.3%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
JPY - Japanese yen
SEK - Swedish krona
XEU - European currency unit
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $59,683,000 or 1.2% of net
assets.
6. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
7. A portion of the security 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 $108,329,000.
8. Purchased on an installment basis. Market value reflects only those
payments made through January 31, 1996. The remaining installments
aggregating CAD 108,726,000 are due July 31, 1996 and January 31, 1997.
9. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
10. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
11. Security pledged to cover margin requirements on futures contracts (see
Note 2 of Notes to Financial Statements). At the period end the value of
securities pledged amounted to $4,727,000.
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 41.1% AAA, AA, A 41.4%
Baa 4.8% BBB 4.5%
Ba 0.4% BB 0.7%
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.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 83.6%
Japan 9.2
Canada 3.4
Australia 1.2
Brazil 1.0
Others (individually less than 1%) 1.6
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1996, the aggregate cost of investment securities for income
tax purposes was $4,755,003,000. Net unrealized appreciation aggregated
$244,628,000, of which $301,711,000 related to appreciated investment
securities and $57,083,000 related to depreciated investment securities.
At July 31, 1995, the fund had a capital loss carryforward of approximately
$87,644,000 which will expire on July 31, 2003.
The fund has elected to defer to its fiscal year ending July 31, 1996
approximately $42,321,000 of losses recognized during the period November
1, 1994 to July 31, 1995.
At July 31, 1995, the fund was required to defer $3,416,000 of losses on
futures contracts and options, and forward currency contracts.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JANUARY 31, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 4,999,631
agreements of $362,805) (cost $4,754,409) -
See accompanying schedule
Securities sold short, at value (proceeds received (109,065) $ 4,890,566
$90,010)
Restricted cash on securities sold short 90,010
Receivable for investments sold 101,880
Receivable for fund shares sold 6,005
Dividends receivable 4,348
Interest receivable 58,786
Receivable for daily variation on futures contracts 3,013
Other receivables 12,023
TOTAL ASSETS 5,166,631
LIABILITIES
Payable to custodian bank 49
Payable for investments purchased 190,152
Regular delivery
Delayed delivery 9,895
Payable for fund shares redeemed 21,145
Accrued management fee 2,076
Payable for daily variation on futures contracts 407
Other payables and accrued expenses 4,775
Collateral on securities loaned, at value 21,019
TOTAL LIABILITIES 249,518
NET ASSETS $ 4,917,113
Net Assets consist of:
Paid in capital $ 4,692,045
Undistributed net investment income 70,914
Accumulated undistributed net realized gain (loss) on (91,831)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 245,985
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 360,536 shares outstanding $ 4,917,113
NET ASSET VALUE, offering price and redemption price per $13.64
share ($4,917,113 (divided by) 360,536 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
INVESTMENT INCOME $ 29,785
Dividends
Interest (including income on securities loaned of $192) 95,287
TOTAL INCOME 125,072
EXPENSES
Management fee $ 12,566
Transfer agent fees 5,769
Accounting and security lending fees 398
Non-interested trustees' compensation 22
Custodian fees and expenses 411
Registration fees 26
Audit 65
Legal 19
Dividends on securities sold short 911
Miscellaneous 7
Total expenses before reductions 20,194
Expense reductions (577) 19,617
NET INVESTMENT INCOME 105,455
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 76,451
Foreign currency transactions (7,396)
Futures contracts 13,618
Short sales (33,005) 49,668
Change in net unrealized appreciation (depreciation) on:
Investment securities 42,148
Assets and liabilities in foreign currencies 33,843
Futures contracts 18,049
Short sales 18,587 112,627
NET GAIN (LOSS) 162,295
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 267,750
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JULY 31,
JANUARY 31, 1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 105,455 $ 277,107
Net investment income
Net realized gain (loss) 49,668 (148,167)
Change in net unrealized appreciation (depreciation) 112,627 230,830
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 267,750 359,770
FROM OPERATIONS
Distributions to shareholders from net investment income (110,388) (183,542)
Share transactions 622,701 1,416,410
Net proceeds from sales of shares
Reinvestment of distributions 106,203 175,630
Cost of shares redeemed (1,039,443) (2,088,073)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (310,539) (496,033)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (153,177) (319,805)
NET ASSETS
Beginning of period 5,070,290 5,390,095
End of period (including undistributed net investment $ 4,917,113 $ 5,070,290
income of $70,914 and $75,847, respectively)
OTHER INFORMATION
Shares
Sold 46,670 110,702
Issued in reinvestment of distributions 7,966 13,918
Redeemed (78,199) (162,998)
Net increase (decrease) (23,563) (38,378)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31, 1996
(UNAUDITED) 1995 1994 D 1993 1992 1991
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 13.20 $ 12.76 $ 13.84 $ 12.79 $ 12.15 $ 11.11
beginning of period
Income from
Investment
Operations
Net investment .30 .62 .25 .62 .62 .65
income
Net realized and un- .44 .27 (.17) 1.45 1.07 1.07
realized gain (loss)
Total from .74 .89 .08 2.07 1.69 1.72
investment
operations
Less Distributions (.30) (.45) (.25) (.66) (.60) (.68)
From net investment
income
From net realized - - (.50) (.36) (.45) -
gain
In excess of net - - (.41) - - -
realized gain
Total distributions (.30) (.45) (1.16) (1.02) (1.05) (.68)
Net asset value, end $ 13.64 $ 13.20 $ 12.76 $ 13.84 $ 12.79 $ 12.15
of period
TOTAL RETURN B, C 5.67% 7.19% .37% 17.18% 14.73% 16.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 4,917 $ 5,070 $ 5,390 $ 3,599 $ 1,366 $ 458
period (in millions)
Ratio of expenses to .81% A .91% 1.02% .93% .96% .98%
average net assets
Ratio of expenses to .79% A, .90% 1.01% .93% .96% .98%
average net assets E E E
after expense
reductions
Ratio of net investment 4.25% A 5.33% 4.09% 5.07% 5.68% 5.93%
income to average
net assets
Portfolio turnover rate 301% A 269% 157% 162% 242% 238%
</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 EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Balanced Fund (the fund) is a fund of Fidelity Puritan Trust (the
trust) and is authorized to issue an unlimited number of shares. The trust
is registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The financial statements have been prepared
in conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Debt securities for which quotations are readily
available are valued by a pricing service at their market values as
determined by their most recent bid prices in the principal market (sales
prices if the principal market is an exchange) in which such securities are
normally traded. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities
maturing within sixty days of their purchase date are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts 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 included with the net realized and unrealized gain or loss
on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
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.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for paydown
gains/losses on certain securities, futures and options transactions,
foreign currency transactions, market discount, partnerships, non-taxable
dividends and losses deferred due to wash sales, futures and options and
excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain
(loss). Undistributed net investment income and accumulated undistributed
net realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will reverse in
a subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. 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.
2. OPERATING POLICIES- CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
SHORT SALES AGAINST THE BOX. The fund may hedge its investments against
changes in value by engaging in short sales against the box. In a short
sale against the box, the fund sells a borrowed security, while at the same
time either owning an identical security or having the right to obtain such
a security. By selling short against the box the equity underlying one of
its convertible holdings, the fund would seek to offset the effect that a
decline in the underlying equity might have on the value of the convertible
security. While the short sale is outstanding, the fund will not dispose of
the security hedged by the short sale.
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
2. OPERATING POLICIES- CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
contracts involve, to varying degrees, risk of loss in excess of the
futures variation margin reflected in the Statement of Assets and
Liabilities. The underlying face amount at value of any open futures
contracts or purchased options at period end is shown in the schedule of
investments under the captions "Futures Contracts," and "Purchased
Options." 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.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $7,263,913,000 and $7,575,094,000, respectively, of which U.S.
government and government agency obligations aggregated $4,035,944,000 and
$4,142,797,000, respectively.
The market value of futures contracts opened and closed during the period
amounted to $1,417,493,000 and $1,088,199,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
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.
For the period, the transfer agent fees were equivalent to an annualized
rate of 0.23% of average net assets.
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 $1,641,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $20,248,000 and
$21,019,000, respectively.
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
$402,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of the fund's expenses. During the period, the fund's
custody and transfer agent fees were reduced by $11,000 and $164,000,
respectively, under these arrangements.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(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 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert Haber, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
GLOBAL BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 31, 1996
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 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 26 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
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, 1996 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
Global Balanced 4.04% 14.67% 35.75%
Morgan Stanley World Index 7.24% 24.78% 57.69%
Salomon Brothers World Government Bond 0.38% 15.15% 33.95%
Index
Global Flexible Funds Average 6.45% 20.90% 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 invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Morgan Stanley World Index - a common proxy for stocks across the world -
and the performance of the Salomon Brothers World Government Bond Index, a
broad measure of government bonds across the world. To measure how the
fund's performance stacked up against its peers, you can compare it to the
global flexible funds average, which reflects the performance of 68 global
flexible portfolio funds with similar objectives tracked by Lipper
Analytical Services over the past six months. These benchmarks include
reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1996 PAST 1 LIFE OF
YEAR FUND
Global Balanced 14.67% 10.72%
Morgan Stanley World Index 24.78% 16.40%
Salomon Brothers World Government Bond Index 15.15% 10.23%
Global Flexible Funds Average 20.90% n/a
AVERAGE ANNUAL RETURNS take the fund's actual (or cumulative) return and
show you what would have happened if the fund had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
Global Balanced MS World Index SB World
Government Bond
02/01/93 10000.00 10000.00
10000.00
02/28/93 10490.00 10233.90
10196.73
03/31/93 11161.12 10824.22
10353.27
04/30/93 11752.77 11322.89
10572.06
05/31/93 11983.41 11580.84
10678.07
06/30/93 11853.13 11480.71
10655.31
07/31/93 12064.62 11714.25
10685.55
08/31/93 12759.49 12248.33
11006.79
09/30/93 12696.03 12019.10
11137.36
10/31/93 13268.94 12347.41
11118.50
11/30/93 13115.48 11646.04
11038.81
12/31/93 13738.72 12213.06
11132.73
01/31/94 14417.31 13015.73
11222.38
02/28/94 13895.32 12844.42
11149.10
03/31/94 12974.09 12287.79
11133.09
04/30/94 12795.94 12664.77
11145.90
05/31/94 13005.53 12694.48
11048.06
06/30/94 12385.09 12656.32
11207.44
07/31/94 12616.58 12894.04
11296.74
08/31/94 12879.65 13279.41
11257.60
09/30/94 12848.08 12927.56
11339.07
10/31/94 12679.72 13292.32
11520.87
11/30/94 12321.95 12712.87
11362.55
12/31/94 12164.11 12833.00
11393.86
01/31/95 11837.91 12637.29
11632.93
02/28/95 11964.18 12818.46
11930.70
03/31/95 12300.91 13433.19
12639.37
04/30/95 12490.31 13898.23
12873.46
05/31/95 12500.83 14013.98
13235.62
06/30/95 12532.40 14006.52
13313.53
07/31/95 13048.01 14704.17
13344.84
08/31/95 12963.83 14373.41
12886.26
09/30/95 13153.23 14788.95
13174.07
10/31/95 13026.96 14552.92
13272.26
11/30/95 13268.98 15055.05
13420.26
12/31/95 13563.95 15492.04
13562.92
01/31/96 13574.51 15769.09
13395.35
$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, 1996, the value of your investment would have
grown to $13,575 - a 35.75% 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 $15,769 - a 57.69% increase. If you had put
$10,000 in the Salomon Brothers World Government Bond Index, it would have
grown to $13,395 - a 33.95% 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 Mace and Robert Haber, Portfolio Managers of
Fidelity Global Balanced Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
R.H. For the past six months, the fund had a total return of 4.04%. That
trailed the global flexible funds average, which returned 6.45% during the
same period, according to Lipper Analytical Services. For the 12 months
ended January 31, 1996, the fund had a total return of 14.67%, while the
average global flexible fund tracked by Lipper returned 20.90%.
Q. WHY DID THE FUND TRAIL THE
AVERAGE FUND?
R.H. It did so because of factors involving the fund's equity component.
That part of the fund underperformed its benchmark - the Morgan Stanley
World Index - as a result of owning value-oriented stocks of small- and
mid-sized U.S. companies. These stocks underperformed the
large-capitalization U.S. stocks, which were among the best performing
stocks in the world over the past six months. In addition, currency had a
negative impact. Japan had the highest country allocation in the fund, but
while the fund's Japanese investments did well, the fund didn't benefit.
That's because the yen depreciated versus the dollar, so the gains realized
by these investments weren't translated into dollar-based gains. The fund's
bond component performed better than its benchmark, the Salomon Brothers
World Government Bond Index. Furthermore, the fund allocated more in bonds
than other global flexible funds. The fund's investment objective calls for
high current income, with regard for both preservation of capital and
potential for growth of capital. That's why we overweighted bonds, which
performed well, but not as well as equities.
Q. WHAT WAS THE REASON BEHIND THE FUND'S BIAS TOWARD SMALL-CAP AND MID-CAP
STOCKS IN THE U.S.?
R.H. Rick and I follow a value-oriented approach to picking stocks, looking
for those that are cheap when measured by yardsticks such as cash flow or
current earnings. We do so because it can lower risk and mitigate
volatility. Over the period, large-cap stocks generally were selling at
very high valuations - stock prices compared to other measures such as
earnings - while small- and mid-cap stocks appeared to offer better values.
In a rally such as the U.S. stock market has seen over the past year, the
large-cap stocks tend to go up first, followed by smaller stocks. Since
large-company stocks were already mostly overvalued, we believed it was
safer to invest in smaller, attractively valued U.S. stocks, which had
greater potential for gain.
Q. WAS THERE A PARTICULAR THEME TO YOUR U.S. EQUITY INVESTMENTS?
R.H. We invested a fair amount in cyclical stocks - those that tend to rise
and fall with the economy. Specifically, we focused part of the portfolio
on aluminum and nickel stocks such as Inco and Reynolds Metals. These
companies have tended to do well at the end of economic cycles. It appears
we invested in these companies too early, because while inventories kept
going down and demand continued to exceed supply, the price of the metals
and the business prospects of the companies didn't improve as much as we
expected. While the U.S. economy appears to have slowed, if any of the
major world economies picks up substantially - as it appears is happening
in Japan - we believe this industry should be well positioned. That's
because aluminum and nickel are global commodities and the industry is
global in scope.
Q. RICK, JAPANESE STOCKS COMPRISE THE LARGEST EQUITY POSITION IN THE FUND.
WHAT'S BEEN THE APPEAL THERE?
R.H. We found Japanese stocks offered a combination of superior earnings
growth potential and that they offered the best value. The Japanese economy
seemed to be closer to recovery than those in Europe and elsewhere, and
prices were more depressed. In addition, short-term interest rates were
very low and bond yields dropped markedly, helping the prospect of both
Japanese companies and the overall economy. We felt that these interest
rate decreases - along with increased spending on the part of the Japanese
government - would help stimulate economic growth. Furthermore, Japanese
products became more competitive globally because of a weaker yen.
Q. WHAT CHANGES HAVE YOU MADE TO THE FUND'S BOND PORTFOLIO?
R.H. We've succeeded in repositioning the fixed-income part of the fund in
the way we described in the last report. Specifically, that part of the
portfolio was invested primarily in government-issued, developed country
AAA-rated debt at the end of the period. When deciding which country to
invest in or which sector, we look at relative value, relative yield and
currency values. The most important move we made during the six-month
period was to avoid investing in Japanese bonds. That move helped because
the yen weakened and the Japanese market didn't participate in the global
bond market rally of the past six months. The lion's share of the fund's
bond investments was in U.S. Treasuries and agency issues at the end of the
period, with an average weighted maturity of about 15 years. Our feeling is
that economic growth has stalled and inflation poses little threat.
Q. WHAT ELSE COLORS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
R.H. Our outlook is not that different from six months ago. Key central
banks - such as the Federal Reserve Board in the U.S., Bundesbank in
Germany and the Bank of Japan - have been lowering rates to stimulate
economic growth. We're still waiting for lower rates to have this kind of
stimulative effect. At some juncture, European cyclical stocks may become
more attractive than other options. If that happens, we may reduce the
fund's investments in Japan, hoping to take advantage of values in Europe.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current income
with regard for both
preservation of capital and
potential for growth of
capital
START DATE: February 1, 1993
SIZE: as of January 31,
1996, more than $120 million
MANAGERS: Robert Haber,
since 1993; manager,
Fidelity Balanced Fund,
since 1988; Fidelity Advisor
Income & Growth Fund,
since 1987; Fidelity Advisor
Annuity Income & Growth
Fund, since January 1995;
joined Fidelity in 1985.
Richard Mace, since
February 1995; manager,
Fidelity International
Growth & Income Fund,
since 1994; Fidelity
International Value Fund
since 1994; manager,
Fidelity Select Chemicals,
Industrial Materials, and
Transportation Portfolios,
1989-1992; joined Fidelity in
1987
(checkmark)
RICK MACE AND BOB HABER ON
VALUE INVESTING:
R.M. "When defining value, I
like to give the example of a
person who walks into a store
where they're selling dollar
bills for 80 cents a piece.
That's value - paying less for
a stock than it's worth. Ideally,
many other investors then
begin to spot that same value
and drive up the price of the
stock to a more fair valuation,
at which time we'll sell at a
profit. When a stock gets
cheap enough, it becomes
attractive, as long as we
believe the fundamentals will
improve at some point. If we
find a stock is cheap enough
and there is a hint of
improvement in the
company's business
prospects, then we seek to
own a lot of the stock."
R.H. "We analyze stocks
one-by-one, trying to find the
most attractive values with
the best business prospects.
For the most part, country
allocation is a fallout of stock
selection. If we find a lot of
cheap stocks in a market, that
market becomes better
represented in the fund. It's
not likely we'll look for a
market that is cheap and
therefore buy a lot of stocks
there. But it usually happens
that when we find a lot of
cheap stocks, we find they're
part of a cheap market."
INVESTMENT CHANGES
TOP FIVE STOCKS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Omron Corp. (Japan) 1.7 2.7
Telebras PN (Pfd. Reg.) (Brazil) 1.3 0.0
Falconbridge Ltd. (Canada) 1.1 0.2
Canon, Inc. (Japan) 1.1 1.2
Fuji Photo Film Co. Ltd. (Japan) 1.1 0.4
TOP FIVE BONDS AS OF JANUARY 31, 1996
(BY ISSUER, WITH MATURITIES MORE THAN ONE % OF FUND'S % OF FUND'S
YEAR) INVESTMENTS INVESTMENTS
IN THESE BONDS
6 MONTHS AGO
United States Treasury 29.3 13.5
German Government (DBR) 2.6 0.0
Republic of Italy (BTP) 2.5 1.9
Kingdom of Sweden 1.4 0.0
United Kingdom, Great Britain &
Northern Ireland 0.9 5.4
TOP FIVE COUNTRIES AS OF JANUARY 31, 1996
(BY LOCATION OF ISSUER) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE COUNTRIES
6 MONTHS AGO
United States of America 53.0 37.0
Japan 20.0 19.5
Germany 3.8 12.2
France 3.5 8.8
Canada 3.1 6.6
ASSET ALLOCATION
AS OF JANUARY 31, 1996 * AS OF JULY 31, 1995 **
Row: 1, Col: 1, Value: 3.0
Row: 1, Col: 2, Value: 6.2
Row: 1, Col: 3, Value: 37.3
Row: 1, Col: 4, Value: 53.5
Row: 1, Col: 5, Value: 20.0
Row: 1, Col: 1, Value: 3.4
Row: 1, Col: 2, Value: 11.4
Row: 1, Col: 3, Value: 38.0
Row: 1, Col: 4, Value: 47.2
Stocks and
equity futures 53.5%
Bonds 37.3%
Convertible
securities 6.2%
Short-term
investments 3.0%
FOREIGN
INVESTMENTS 47.0%
Stocks and
equity futures 47.2%
Bonds 38.3%
Convertible
securities 11.4%
Short-term
investments 3.1%
FOREIGN
INVESTMENTS 63.0%
*
**
INVESTMENTS JANUARY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 48.1%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.5%
QNI Ltd. 176,500 $ 350,114
Western Mining Holdings Ltd. 44,000 271,035
621,149
AUSTRIA - 0.3%
EVN (Energie-Versor Nieder) 600 79,579
Mayr Melnhof Karton AG 1,900 94,659
Radex Heraklith Industrie 4,000 137,318
311,556
BRAZIL - 1.9%
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 832,300 405,491
Telebras sponsored ADR 3,500 195,125
Telebras PN (Pfd. Reg.) 27,707,200 1,543,931
Telecomunicacoes de Minas Gerais SA (Telemig) 1,693,100 119,446
2,263,993
CANADA - 2.3%
Falconbridge Ltd. (1st Installment Receipts) (h) 153,800 1,371,864
Inco Ltd. 8,600 299,796
Ulster Petroleums Ltd. (a) 235,800 832,730
Wascana Energy, Inc. (a) 20,400 189,391
2,693,781
DENMARK - 0.4%
International Service Systems AS, Series B 4,500 112,432
Teledanmark AS Class B 2,500 137,937
Unidanmark AS Class A 5,000 255,921
506,290
FINLAND - 0.9%
Huhtamaki Ord. 5,500 157,726
Kemira OY 50,000 417,027
Valmet OY Class A 17,500 447,073
1,021,826
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - 2.8%
Accor SA 900 $ 117,522
Alcatel Alsthom Cie Generale d'Electricite SA 4,000 365,231
Axa SA 2,000 125,294
Axa SA (rights) 2,000 3,896
Axime SA Ex Segin (a)(e) 7,000 650,255
Eramet SA 2,000 130,384
Generale des Eaux 4,078 432,709
Michelin SA Cie Generale des Etablissements Class B 18,000 764,683
Pechiney SA Class A 3,300 125,979
Seita 3,000 115,407
Total SA Class B 7,122 487,581
3,318,941
GERMANY - 0.9%
Bayer AG 300 89,627
Continental Gummi-Werke AG 7,000 114,199
Daimler-Benz AG Ord. 100 55,220
Deutsche Bank AG 7,000 349,178
Veba AG (warrants) (a) 2,400 440,685
Volkswagen AG 200 72,843
1,121,752
HONG KONG - 0.3%
Consolidated Electric Power Asia Ltd. 30,000 55,674
HSBC Holdings PLC 4,000 66,214
Peregrine Investments Holdings Ltd. 100,000 170,708
292,596
ISRAEL - 0.3%
Elscint Ltd. (a) 188,600 400,775
ITALY - 0.2%
De Rigo Spa sponsored ADR 300 7,500
Italcementi Fabbriche Ruinite Cemento Spa 5,000 33,550
Stet (Societa Finanziaria Telefonica) Spa Ord. 60,000 188,414
229,464
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - 19.7%
Acom Co. Ltd. 9,000 $ 348,739
Aiwa Co. Ltd. 3,000 63,025
Akita Bank Ltd. 21,000 157,647
Aoyama Trading Co. Ord. 3,500 102,941
Asahi Bank Ltd. ADR 15,000 179,272
Bridgestone Corp. 10,000 154,062
Canon, Inc. 71,000 1,339,122
Citizen Watch Co. Ltd. Ord. 15,000 123,249
Dai-Ichi Kangyo Bank 5,000 93,838
Dai-Tokyo Fire & Marine Insurance Ord. 13,000 92,857
Daiwa House Industry Co. Ltd. 15,000 238,095
Daiwa Securities Co. Ltd. 47,000 702,148
Dowa Fire & Marine Industries Co. Ltd. 5,000 25,584
Eighteenth Bank 10,000 87,768
Fuji Bank Ltd. (a) 15,000 340,336
Fuji Electric Co. Ltd. 59,000 291,419
Fuji Photo Film Co. Ltd. 45,000 1,268,908
Fujitsu Ltd. 5,000 53,688
Higashi Nihon House Co. Ltd. 10,000 169,001
Hitachi Koki Co. Ltd. Ord. 10,000 96,172
Hitachi Ltd. 100,000 1,008,403
Hitachi Maxell Ltd. 10,000 177,404
Honda Motor Co. Ltd. 17,000 371,429
Hoya Corp. 5,000 163,399
Ito-Yokado Co. Ltd. 22,000 1,250,980
Jusco Co. Ltd. 10,000 256,769
Kobe Steel Ltd. Ord. (a) 100,000 312,792
Konica Corp. 15,000 108,824
Kyocera Corp. 3,000 212,605
Makita Corp. 7,000 114,379
Matsushita Electric Industrial Co. Ltd. 30,000 498,599
Mitsubishi Bank of Japan 21,000 454,902
Mitsubishi Electric Co. Ord. 120,000 868,347
Mitsubishi Heavy Industries Ltd. 5,000 39,636
Mitsubishi Trust & Banking Corp. 10,000 154,995
Mitsui Trust and Banking 14,000 151,634
NEC Corp. 3,000 36,415
NKK Corp. (a) 50,000 142,390
Namco Ltd. 8,000 249,486
National House Industrial Co., Ltd. 4,000 72,082
Nichicon Corp. 20,000 289,449
Nichiei Co. Ltd. 1,000 70,028
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Nifco, Inc. 5,000 $ 62,558
Nintendo Co. Ltd. Ord. 2,500 183,240
Nippon Shokubai Co. Ltd. 25,000 266,106
Nissan Motor Co. Ltd. Ord. 10,000 78,898
Nitto Denko Corp. 32,000 463,119
Nomura Securities Co. Ltd. 57,000 1,234,734
Omron Corp. 93,000 2,049,300
Promise Co. Ltd. 2,000 90,196
Ricoh Co. Ltd. Ord. 20,000 212,885
Rohm Co. Ltd. 1,000 55,275
Sakura Bank Ltd. 25,000 287,115
Sankyo Co. Ltd. 2,000 47,246
Sanwa Bank Ltd. 14,000 264,052
Sekisui Chemical Co. Ltd. 38,000 510,924
Sekisui House Ltd. 15,000 190,476
Shimamura Corp. 5,000 185,808
Shin-Etsu Chemical Co. Ltd. 5,000 100,840
Sony Corp. 20,000 1,223,156
Sumitomo Bank Ltd. 15,000 287,115
Sumitomo Trust & Banking Co. Ltd. 12,000 161,345
TDK Corp. 8,000 398,133
Takeda Chemical Industries Ltd. 12,000 189,356
Tokai Bank Ltd. 15,000 204,482
Toshiba Corp. 5,000 38,889
Tostem Corp. 8,000 262,932
Toyota Motor Corp. 10,000 214,753
Uny Co. Ltd. 27,000 504,202
Wako Electric Co. Ltd. 19,000 390,289
Yamanouchi Pharmaceutical Co. Ltd. 16,000 349,580
Yoshinoya D&C Co. Ltd. Ord. 7 101,307
23,541,129
NETHERLANDS - 1.0%
Koninklijke Ptt Nederland NV 10,000 383,693
Royal Dutch Petroleum Co. 400 55,600
Royal Dutch Petroleum Co. Ord. 3,000 415,288
Vendex International NV (a)(e) 11,000 336,331
1,190,912
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NEW ZEALAND - 0.1%
Brierley Investments Ltd. 200,000 $ 173,544
NORWAY - 1.0%
Den Norske Bank Class A Free shares 20,000 54,630
Fokus Bank AS (a) 17,400 99,596
Fokus Bank AS (a)(e) 10,000 57,239
Smedvig AS 10,000 191,819
Transocean Drilling AS (a) 40,500 742,679
1,145,963
RUSSIA - 0.0%
Mosenergo AO sponsored ADR (a)(e) 7,000 51,625
SPAIN - 0.8%
Banco Bilbao Vizcaya SA Ord. (Reg.) 10,000 366,135
Banco de Santander SA Ord. (Reg.) 4,000 192,191
FOCSA (Fomento Construcciones y Contratas SA) 2,000 165,737
Tabacalera SA, Series A 5,000 194,223
918,286
SWEDEN - 1.0%
Electrolux AB 5,000 211,177
Esselte AB Class B Free shares 12,000 195,465
Svedala Industri 10,000 259,467
Volvo AB:
Class B 20,000 374,786
Class B ADR 5,000 93,750
1,134,645
SWITZERLAND - 0.1%
Swisslog Holding AG (Reg.) 350 94,337
UNITED KINGDOM - 1.4%
BET PLC Ord. 150,000 297,206
Cookson Group 100,000 443,919
Guinness PLC Ord. 41,300 284,846
Resort Hotels PLC (a) 570,000 9
Shanks & McEwan Group PLC 73,500 117,839
Shell Transport & Trading PLC 5,000 64,281
Telegraph PLC (The) 30,000 201,805
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Unilever PLC Ord. 5,000 $ 102,623
WPP Group PLC 6,300 16,485
Wickes PLC 100,000 192,088
1,721,101
UNITED STATES OF AMERICA - 12.2%
AEP Industries, Inc. 300 6,600
ASECO Corp. (a) 11,600 162,400
Aequitron Medical, Inc. (a) 33,000 255,750
Allied Products Corp. 2,300 51,175
American Buildings Co. (a) 51,000 1,150,688
American Telecasting, Inc. (a) 6,800 102,000
Atlantic Richfield Co. 2,000 227,250
Aviall, Inc. 43,200 367,200
BancTec, Inc. (a) 10,500 189,000
Bell Atlantic Corp. 6,900 475,238
CAI Wireless Systems, Inc. (a) 20,000 200,000
Canyon Resources Corp. (a) 80,000 250,000
Cardinal Health, Inc. 1,300 77,513
Consolidated Stores Corp. (a) 2,000 40,000
Continental Homes Holding Corp. 25,000 550,000
Elcor Corp. 10,000 252,500
Equitrac Corp. (a) 200 1,100
Flightsafety International, Inc. 300 14,963
Flir Systems, Inc. (a) 13,000 136,500
General Binding Corp. 16,500 375,375
Genlyte Group, Inc. (a) 37,000 277,500
Giant Industries, Inc. 58,700 704,400
Graphic Industries, Inc. 41,100 436,688
Hughes Supply, Inc. 1,100 31,625
ILC Technology, Inc. (a) 70,000 638,750
IMC Fertilizer Group, Inc. 12,000 450,000
IMCO Recycling, Inc. 2,800 58,800
Inacom Corp. (a) 20,000 310,000
Intermet Corp. 10,000 110,625
Kellwood Co. 400 5,600
Kinetic Concepts, Inc. 20,000 247,500
Lafarge Corp. 600 11,175
Layne, Inc. (a) 5,000 56,250
LeaRonal, Inc. 6,000 159,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA - CONTINUED
Lehman Brothers Holdings, Inc. 600 $ 15,375
Liberty Corp. (The) 900 31,388
Liberty Property Trust (SBI) 1,400 30,975
NCI Building Systems, Inc. (a) 12,500 352,344
NVR, Inc. (a) 10,000 103,750
Nabors Industries, Inc. (a) 33,600 407,400
Ortel Corp. (a) 80,000 920,000
Pier 1 Imports, Inc. 26,600 312,550
Regis Corp. 10,000 242,500
Rohr Industries, Inc. (a) 400 7,300
St. Jude Medical, Inc. (a) 50 2,206
Schnitzer Steel, Inc. Class A 21,700 656,425
Security-Connecticut Corp. 10,000 250,000
Talbots, Inc. 300 8,288
Trident Microsystems, Inc. (a) 10,000 137,500
United HealthCare Corp. 2,300 144,613
Universal Hospital Services, Inc. (a) 5,000 48,750
USLife Corp. 2,100 67,463
U.S. Satellite Broadcasting Co., Inc. Class A 100 2,700
Vertex Communications Corp. (a) 26,000 445,250
Washington Homes, Inc. (a) 6,200 36,425
Webb (Del) Corp. 19,100 358,125
Weeks Corp. 600 15,750
Westell Technologies, Inc. Class A (a) 100 2,363
Worldtex Corp. (a) 186,000 953,250
Zero Corp. 40,100 676,688
14,613,293
TOTAL COMMON STOCKS
(Cost $54,777,526) 57,366,958
PREFERRED STOCKS - 3.2%
CONVERTIBLE PREFERRED STOCKS - 2.6%
JAPAN - 0.3%
AJL PEPS Trust exchangeable (a) 15,000 311,250
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
UNITED STATES OF AMERICA - 2.3%
Alumax, Inc., Series A, $4.00 900 $ 118,013
Kaiser Aluminum Corp. $0.97 85,900 1,191,863
Occidental Petroleum Corp., Series A, Indexed $3.00 18,600 1,129,950
Reynolds Metals Co. $3.31 6,900 342,413
2,782,239
TOTAL CONVERTIBLE PREFERRED STOCKS 3,093,489
NONCONVERTIBLE PREFERRED STOCKS - 0.6%
AUSTRIA - 0.2%
Creditanstalt Bankverein 5,000 294,525
GERMANY - 0.3%
Porsche AG Ord. 200 115,878
Volkswagen AG $12.00 1,000 270,896
386,774
ITALY - 0.1%
Italmobiliare Spa 10,000 79,817
TOTAL NONCONVERTIBLE PREFERRED STOCKS 761,116
TOTAL PREFERRED STOCKS
(Cost $3,578,899) 3,854,605
CONVERTIBLE BONDS - 3.6%
MOODY'S PRINCIPAL
RATINGS (C) AMOUNT (B)
BERMUDA - 0.7%
MBL International Finance Bermuda
3%, 11/30/02 Aa3 $ 740,000 830,650
CANADA - 0.8%
Inco Ltd. yankee 5 3/4%, 7/1/04 Baa2 680,000 924,800
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
TAIWAN (FREE CHINA) - 0.0%
Acer, Inc. euro 4%, 6/10/01 - $ 10,000 $ 27,500
SWEDEN - 0.6%
Investor AB 8%, 6/1/01 (g) A- SEK 3,868,620 775,140
UNITED STATES OF AMERICA - 1.5%
Aspect Telecommunications Corp.
5%, 10/15/03 (e)(g) B3 382,000 735,828
Orbital Sciences Corp. 6 3/4%, 3/1/03 (g) B3 829,000 953,350
Wendy's International, Inc. 7%, 4/1/06 (g) Baa3 40,000 66,800
1,755,978
TOTAL CONVERTIBLE BONDS
(Cost $4,029,255) 4,314,068
GOVERNMENT OBLIGATIONS (I) - 39.5%
FRANCE - 0.7%
French Government Principal Strips
0%, 10/25/25 Aaa FRF 40,000,000 861,402
GERMANY - 2.6%
German Government (DBR) 6%, 6/20/16 Aaa DEM 4,850,000 3,031,128
ITALY - 2.5%
Republic of Italy (BTP) (d):
8 1/2%, 8/1/99 A1 ITL 2,000,000 1,231,964
10 1/2%, 9/1/05 A1 ITL 2,700,000 1,760,373
2,992,337
MEXICO - 0.0%
Mexico Value oil recovery rights (a) - 1,086,000 11
SWEDEN - 1.4%
Kingdom of Sweden:
10 1/4%, 5/5/03 Aa1 SEK 5,000,000 803,987
6%, 2/9/05 Aa1 SEK 6,500,000 802,229
1,606,216
UNITED KINGDOM - 0.9%
United Kingdom, Great Britain &
Northern Ireland 8 3/4%, 8/25/17 Aaa GBP 670,000 1,105,212
GOVERNMENT OBLIGATIONS (I) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
UNITED STATES OF AMERICA - 31.4%
U.S. Treasury Bill, yield at date of purchase
4.9030%, 3/7/96 - $ 2,600,000 $ 2,587,650
U.S. Treasury Bonds:
12 3/4%, 11/15/10 Aaa 880,000 1,337,873
13 7/8%, 5/15/11 Aaa 1,980,000 3,215,342
8 1/8%, 8/15/19 (f) Aaa 9,000,000 11,233,080
7 1/8%, 2/ 15/23 Aaa 1,350,000 1,529,928
6 1/4%, 8/15/23 Aaa 5,500,000 5,604,830
7 1/2%, 11/15/24 Aaa 2,335,000 2,776,829
7 5/8%, 2/15/25 Aaa 4,075,000 4,933,277
6 7/8%, 8/15/25 Aaa 665,000 742,200
U.S. Treasury Note 7 1/4%, 11/15/96 Aaa 3,490,000 3,549,435
37,510,444
TOTAL GOVERNMENT OBLIGATIONS
(Cost $45,151,488) 47,106,750
REPURCHASE AGREEMENTS - 5.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.88% dated
1/31/96 due 2/1/96 $ 6,713,096 6,712,000
PURCHASED OPTIONS - 0.0%
EXPIRATION DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
2,150,000 Goldman Sachs and Co. Put
Options on U.S. Treasury bonds, Feb. 96/
6 7/8%, 8/15/25 109.4375 $ 2,400,609 4,367
2,150,000 Lehman Brothers Put Options
on U.S. Treasury bonds, Feb. 96/
7 5/8%, 2/15/25 118.921875 2,602,844 5,289
TOTAL PURCHASED OPTIONS
(Cost $22,004) 9,656
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $114,271,172) $ 119,364,037
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
55 Nikkei 225 Index Futures March, 1996 $ 5,750,250 $ 558,492
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 4.8%
SECURITIES SOLD SHORT
NUMBER OF SHARES ISSUER VALUE
19,600 Aspect Telecommunications Corp. $ 725,200
24,650 Investor AB free shares 783,493
57,500 Orbital Sciences Corp. 898,437
3,000 Wendy's International, Inc. 61,875
TOTAL SECURITIES SOLD SHORT
(Total proceeds $1,899,171) $ 2,469,005
THE VALUE OF SECURITIES SOLD SHORT AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.1%
CURRENCY ABBREVIATIONS
DEM - German deutsche mark
FRF - French franc
GBP - British pound
ITL - Italian lira
SEK - Swedish krona
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Principal amount in thousands.
5. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,831,278 or 1.5% of net
assets.
6. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $1,248,120.
7. 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 $2,531,118.
8. Purchased on an installment basis. Market value reflects only those
payments made through January 31, 1996. The remaining installments
aggregating CAD 2,922,200 are due on July 31, 1996 and January 31, 1997.
9. Some foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 37.2% AAA, AA, A 37.9%
Baa 0.8% BBB 0.8%
Ba 0.0% BB 0.0%
B 1.4% B 0.8%
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.
INCOME TAX INFORMATION
At January 31, 1996, the aggregate cost of investment securities for income
tax purposes was $114,313,693. Net unrealized appreciation aggregated
$5,050,344, of which $7,727,735 related to appreciated investment
securities and $2,677,391 related to depreciated investment securities.
At July 31, 1995, the fund had a capital loss carry- forward of
approximately $10,190,000 all of which will expire on July 31, 2003.
The fund has elected to defer to its fiscal year ending July 31, 1996
approximately $14,797,000 of losses recognized during the period November
1, 1994 to July 31, 1995.
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Value of
Investment in Securities
Aerospace & Defense 1.2%
Basic Industries 7.2
Construction & Real Estate 3.4
Durables 5.1
Energy 4.5
Finance 8.4
Government Obligations 39.5
Health 1.4
Industrial Machinery &
Equipment 5.9
Media & Leisure 1.2
Nondurables 1.1
Retail & Wholesale 3.0
Repurchase Agreements 5.6
Technology 7.5
Utilities 3.4
Others (individually less than 1%) 1.6
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS JANUARY 31, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 119,364,037
agreements of $6,712,000) (cost $114,271,172) -
See accompanying schedule
Securities sold short, at value (proceeds received (2,469,005) $ 116,895,032
$1,899,171)
Restricted cash on securities sold short 1,899,171
Cash 7
Receivable for investments sold 4,204,056
Receivable for fund shares sold 427,170
Dividends receivable 88,109
Interest receivable 1,449,307
Receivable for daily variation on futures contracts 4,125
TOTAL ASSETS 124,966,977
LIABILITIES
Payable for investments purchased 2,987,516
Payable for fund shares redeemed 981,260
Accrued management fee 75,084
Other payables and accrued expenses 197,124
TOTAL LIABILITIES 4,240,984
NET ASSETS $ 120,725,993
Net Assets consist of:
Paid in capital $ 136,492,710
Undistributed net investment income 1,667,286
Accumulated undistributed net realized gain (loss) on (22,538,130)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 5,104,127
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 9,393,189 shares outstanding $ 120,725,993
NET ASSET VALUE, offering price and redemption price per $12.85
share ($120,725,993 (divided by) 9,393,189 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
INVESTMENT INCOME $ 459,611
Dividends
Interest 2,215,874
TOTAL INCOME 2,675,485
EXPENSES
Management fee $ 493,518
Transfer agent fees 241,309
Accounting fees and expenses 40,556
Non-interested trustees' compensation 1,078
Custodian fees and expenses 76,607
Registration fees 20,564
Audit 37,636
Legal 663
Interest 854
Dividends on securities sold short 15,132
Miscellaneous 81
Total expenses before reductions 927,998
Expense reductions (14,277) 913,721
NET INVESTMENT INCOME 1,761,764
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 4,392,700
Foreign currency transactions (695,641)
Futures contracts 787,823
Short sales (1,737,881) 2,747,001
Change in net unrealized appreciation (depreciation) on:
Investment securities (2,293,149)
Assets and liabilities in foreign currencies 562,295
Futures contracts 345,886
Short sales 1,780,249 395,281
NET GAIN (LOSS) 3,142,282
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 4,904,046
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,
31,1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 1,761,764 $ 10,413,648
Net investment income
Net realized gain (loss) 2,747,001 (26,837,322)
Change in net unrealized appreciation (depreciation) 395,281 17,642,981
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,904,046 1,219,307
FROM OPERATIONS
Distributions to shareholders from net investment income (479,379) -
Share transactions 30,472,045 57,907,802
Net proceeds from sales of shares
Reinvestment of distributions 452,929 -
Cost of shares redeemed (63,454,913) (223,542,247)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (32,529,939) (165,634,445)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (28,105,272) (164,415,138)
NET ASSETS
Beginning of period 148,831,265 313,246,403
End of period (including undistributed net investment $ 120,725,993 $ 148,831,265
income of $1,667,286 and $384,901, respectively)
OTHER INFORMATION
Shares
Sold 2,425,125 4,870,593
Issued in reinvestment of distributions 35,496 -
Redeemed (5,074,766) (18,989,120)
Net increase (decrease) (2,614,145) (14,118,527)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31, FEBRUARY 1, 1993
ENDED JANUARY (COMMENCEMENT
31, 1996 OF OPERATIONS) TO
(UNAUDITED) 1995 1994 F JULY 31, 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.40 $ 11.99 $ 11.98 $ 10.00
period
Income from Investment
Operations
Net investment income .20 .28 .32 D .15
Net realized and unrealized .30 .13 E .25 1.91
gain (loss)
Total from investment operations .50 .41 .57 2.06
Less Distributions (.05) - (.15) (.08)
From net investment income
From net realized gain - - (.11) -
In excess of net realized gain - - (.20) -
Return of capital - - (.10) -
Total distributions (.05) - (.56) (.08)
Net asset value, end of period $ 12.85 $ 12.40 $ 11.99 $ 11.98
TOTAL RETURN B, C 4.04% 3.42% 4.58% 20.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 120,726 $ 148,831 $ 313,246 $ 84,157
(000 omitted)
Ratio of expenses to average 1.42% A 1.34% 1.68% 2.12%
net assets A
Ratio of expenses to average net 1.40% A, 1.33% 1.67% 2.12%
assets after expense reductions G G G A
Ratio of net investment income to 2.69% A 4.68% 2.56% 4.02%
average net assets A
Portfolio turnover rate 252% A 242% 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.
F EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1996 (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 financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Debt securities for which quotations are readily
available are valued by a pricing service at their market values as
determined by their most recent bid prices in the principal market (sales
prices if the principal market is an exchange) in which such securities are
normally traded. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities
maturing within sixty days of their purchase date are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
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.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, foreign currency transactions, passive foreign
investment companies (PFIC), market discount, partnerships, non-taxable
dividends, capital loss carryforwards and losses deferred due to wash sales
and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. 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.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
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 involve, to varying degrees, risk
of loss in excess of the futures variation margin reflected in the
Statement of Assets and Liabilities. The underlying face amount at value of
any open futures contracts at period end, is shown in the schedule of
investments under the captions "Purchased Options," and "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 $160,582,113 and $192,572,356, respectively, of which U.S.
government and government agency obligations aggregated $60,308,478 and
$52,249,770, respectively.
The market value of futures contracts opened and closed during the period
amounted to $14,105,475 and $13,410,346, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. 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 .45%. For
the period, the management fee was equivalent to an annualized rate of .75%
of average net assets.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research (Far East) Inc., Fidelity International Investment
Advisors (FIIA), and Fidelity Investment Japan Ltd. In addition, FIIA
entered into a sub-advisory agreement with its subsidiary, Fidelity
International Investment Advisors (U.K.) Limited (FIIAL U.K.). 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. 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.
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. For the
period, the transfer agent fees were equivalent to an annualized rate of
.37% of average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 $27,509 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 period for
which loans were outstanding amounted to $1,779,000 and $1,653,000,
respectively. The weighted average interest rate was 6.20%.
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
$11,505 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of the fund's expenses. During the period, the fund's
custody and transfer agent fees were reduced by $682 and $2,090,
respectively, under these arrangements.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
Fidelity International Investment Advisors, Pembroke, Bermuda
Fidelity International Investment Advisors (U.K.) Limited
Kent, England
Fidelity Investments Japan Ltd.
Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert Haber, Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
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Product Information 1-800-544-8888
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(8 a.m. - 9 p.m.)
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for the deaf and hearing impaired
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(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
LOW-PRICED STOCK
FUND
SEMIANNUAL REPORT
JANUARY 31, 1996
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 38 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 42 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
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, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Low-Priced Stock 4.93% 26.32% 174.75% 196.46%
Low-Priced Stock (incl. 3% sales 1.78% 22.53% 166.51% 187.56%
charge)
Russell 2000(registered trademark) 6.03% 29.94% 137.50% 112.36%
Small Company Growth Funds 5.18% 31.62% 138.69% n/a
Average
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 invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Russell 2000 Index - a broad measure of small company
stocks. To measure how the fund's performance stacked up against its peers,
you can compare it to the small company growth funds average, which
reflects the performance of 343 small company growth funds with similar
objectives tracked by Lipper Analytical Services over the past six months.
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, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Low-Priced Stock 26.32% 22.40% 19.50%
Low-Priced Stock (incl. 3% sales charge) 22.53% 21.66% 18.90%
Russell 2000 29.94% 18.90% 13.14%
Small Company Growth Funds Average 31.62% 18.68% 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 StocRussell 2000 I
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 8816.43 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 11397.59 9938.77
03/31/91 12156.76 10638.35
04/30/91 12622.38 10611.58
05/31/91 12814.70 11117.39
06/30/91 12045.42 10469.50
07/31/91 12784.34 10836.89
08/31/91 13138.61 11238.01
09/30/91 13192.71 11326.01
10/31/91 13653.40 11625.57
11/30/91 13098.47 11087.87
12/31/91 14019.94 11975.73
01/31/92 15233.92 12946.08
02/29/92 16211.56 13323.74
03/31/92 15674.40 12872.75
04/30/92 15824.80 12421.76
05/31/92 15932.23 12586.94
06/30/92 15545.48 11991.68
07/31/92 16050.41 12408.75
08/31/92 16007.44 12058.59
09/30/92 16137.72 12336.88
10/31/92 16406.50 12729.02
11/30/92 17515.20 13703.05
12/31/92 18079.01 14180.43
01/31/93 18543.44 14660.38
02/28/93 18384.85 14321.78
03/31/93 18939.91 14786.51
04/30/93 18758.67 14380.63
05/31/93 19155.14 15016.96
06/30/93 19223.10 15110.64
07/31/93 19472.31 15319.27
08/31/93 20163.30 15981.08
09/30/93 20327.14 16432.07
10/31/93 21075.97 16855.01
11/30/93 20713.64 16300.25
12/31/93 21733.10 16857.57
01/31/94 22863.72 17386.11
02/28/94 22851.16 17323.23
03/31/94 21846.16 16408.60
04/30/94 22034.60 16506.13
05/31/94 21959.22 16320.79
06/30/94 21645.16 15766.59
07/31/94 22135.10 16025.63
08/31/94 22964.22 16918.62
09/30/94 23073.27 16861.97
10/31/94 23252.45 16795.42
11/30/94 22632.20 16117.11
12/31/94 22778.19 16550.13
01/31/95 22763.95 16341.32
02/28/95 23418.83 17021.10
03/31/95 23575.43 17314.24
04/30/95 24344.19 17699.23
05/31/95 24842.46 18003.56
06/30/95 25796.30 18937.50
07/31/95 27405.01 20028.34
08/31/95 27661.27 20442.67
09/30/95 28155.35 20807.74
10/31/95 27354.31 19877.17
11/30/95 28066.35 20712.30
12/31/95 28448.62 21258.78
01/31/96 28756.17 21219.09
$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 started, and paid
a 3% sales charge. As the chart shows, by January 31, 1996, the value of
your investment would have grown to $28,756 - a 187.56% 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 $21,236 - a 112.36% 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. For the six months ended January 31, 1996, the fund had a total return
of 4.93%. That slightly trailed the small company growth funds average
tracked by Lipper Analytical Services, which returned 5.18% for the same
period. For the 12 months ended January 31, 1996, the fund returned 26.32%,
while the small company growth funds average had a total return of 31.62%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE OVER THE PAST SIX
MONTHS?
A. Large Dow Jones Industrial Average stocks did particularly well,
surpassing the returns of the fund and the small company growth funds
average. Many institutional investors received large inflows and were most
readily able to invest them in large, liquid stocks. Also, the data
received so far shows that in the second half of 1995, operating profits of
the 1,000 largest public companies grew slightly faster than for the next
2,000 companies. Note that the average capitalization of the fund's
holdings tends to be quite small - on average, smaller even than most small
company mutual funds. In addition, these stocks tend to be of companies
growing at above-average rates on a sustainable basis, with valuations that
I believe to be cheap given their prospects. During the period, however,
small company investors favored the very fastest growing companies,
regardless of valuation.
Q. WHAT SORTS OF STRATEGIES HAVE YOU PURSUED OVER THE PAST SIX MONTHS?
A. Some parts of the economy slowed. Interest rates fell during the period,
with bond rates close to their lowest levels in two decades. This backdrop
tended to favor less cyclical - or economically sensitive - companies and
more interest rate-sensitive businesses such as home building, furniture
and those in the financial sector. I increased the fund's investments in
financial stocks and home builders. Specifically, I added to the fund's
insurance investments, including Commerce Group and United Insurance
Companies. They had attractively low price-to-earnings multiples (p/e) - a
stock valuation that gives investors an idea of how much they are paying
for a company's earnings - compared with their growth rates. United
Insurance has been growing its premiums by better than 20% per year for
several years, and I found it to be moderately priced. Commerce Group is an
auto insurer that was selling cheaply despite a strong long-term record and
a new group marketing program that sought to add to its policy holder
growth. The fund's furniture investments included Dorel Industries, Ethan
Allen and Bush, and home building stocks included Crossman Communities and
Washington Homes.
Q. YOU REDUCED THE FUND'S INVESTMENTS IN TECHNOLOGY BY 7% OVER THE PAST SIX
MONTHS . . .
A. The areas in technology where the fund tended to be well represented
were the more commodity-like, volume-manufacturing, component-oriented
parts of the sector, such as semiconductors, semiconductor capital
equipment and disc drives. Most semiconductor prices dropped toward the end
of the period and a fair number of other component companies had softer
pricing and weaker profit margins. The fund sold several companies that had
disappointing earnings, but some stocks fell despite positive earnings and
sales trends. An example was Cohu, the leading semiconductor test handler
company. This stock went down during the period, reflecting a weakness in
semiconductor prices, even though Cohu reported earnings that were up
sharply and its backlog of orders increased. The one area that didn't seem
to have overcapacity problems was disc drives. The fund increased its
largest technology investment in disc-drive manufacturer Quantum. Software
and services companies such as BDM International, GEAC and American
Business Information also were added to the portfolio.
Q. WHAT WERE SOME OF THE OTHER STOCKS THAT DIDN'T PERFORM AS WELL AS YOU
WOULD HAVE LIKED?
A. Mac Frugal's, a retailer, was one. This has been a very tough sector.
The company has been trying to reformat its stores, and is still
experimenting. Devon Group suffered because its second largest customer is
a retail chain suffering from weak sales.
Q. AND WHAT WERE SOME STOCKS THAT HELPED THE FUND DURING THE PERIOD?
A. I held Hillhaven, which merged into Vencor. The combined companies
offered a wide range of facilities such as respiratory care and nursing
homes, and took advantage of cross-referrals and transfers of patients. It
also implemented a new information system that improved efficiency.
Northumbrian Water, a long-time holding that the fund held since it became
public, was taken over by a French company. As a result, it performed well.
Q. JOEL, THE FUND'S SHORT-TERM INVESTMENT POSITION IS UP FROM 12.5% ON JULY
31, 1995, TO 27.3% AT THE END OF THE PERIOD. WHY IS THAT?
A. In the previous six-month period, I deployed some of the fund's cash and
short-term investments by purchasing shares of large-cap growth stocks
selling above $25 per share, as I can do with 35% of the fund, according to
its investment parameters. I had been attracted by the relative value of
those investments in the previous six-month period. As time went on, I
decided that their relative value wasn't attractive enough to warrant
holding these large-cap growth stocks and thus sold them off. At the end of
the period, I was maintaining the higher cash and short-term investment
position as I examined opportunities to buy low-priced stocks of companies
with attractive business prospects.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Intermediate- and long-term bond rates are near their 20-year lows.
Short-term interest rates are not. As a result, I've been waiting for the
effect of lower interest rates to stimulate the economy, but it hasn't
happened yet. I'm watching and waiting to see if lower long-term interest
rates can help to produce a stronger economy or whether that will come only
after short rates come down as well. Any drop in short-term interest rates
or economic improvement should help small company growth stocks.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high income with
preservation of capital. The
fund also considers the
potential for the growth of
capital
START DATE: April 16, 1947
SIZE: as of January 31,
1996, more than $16 billion
MANAGER: Richard Fentin,
since 1987; manager,
Fidelity Growth Company
Fund, 1983-1987; joined
Fidelity in 1980
(checkmark)
RICH FENTIN ON THE VALUE STYLE
OF INVESTING:
"I buy stocks cheap. That's
the bottom line. Anytime I
describe the attributes of a
particular industry or sector I
like, the first thing I will say is
that `the stocks are cheap.'
Basically, I seek high-quality
companies at low prices. I'm
looking for situations where a
stock's valuation is out of
whack with the quality of the
company.
"For a recent example,
take consumer stocks. I
owned Philip Morris - one of
the year's top stocks - not
because it was a hot stock or
that it might perform well in an
economic downturn. I owned
it because it began the year at
an inexpensive level. In my
view, only owning the
market's favorite high-flying
stocks is dangerous because
if something goes wrong, they
are often the first ones to get
hurt."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Universal Health Services, Inc. Class B 1.5 1.2
Lyondell Petrochemical Co. 1.4 1.8
Vencor, Inc. 1.1 0.0
Welsh Water PLC Ord. 1.0 0.9
Firstbank Puerto Rico 1.0 1.1
United Insurance Companies, Inc. 0.9 0.7
Canadian National Railway Co. 1st
Installment Receipt 0.9 0.0
Century Telephone Enterprises, Inc. 0.9 0.7
SouthTrust Corp. 0.7 0.5
Commerce Group, Inc. 0.7 0.5
TOP FIVE MARKET SECTORS AS OF JANUARY 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Finance 17.2 13.8
Technology 7.7 14.7
Health 6.6 8.4
Basic Industries 6.1 9.7
Utilities 5.3 4.8
ASSET ALLOCATION
AS OF JANUARY 31, 1996 * AS OF JULY 31, 1995 **
Row: 1, Col: 1, Value: 27.0
Row: 1, Col: 2, Value: 1.7
Row: 1, Col: 3, Value: 31.0
Row: 1, Col: 4, Value: 42.3
Row: 1, Col: 1, Value: 21.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 47.0
Stocks 72.4%
Bonds 0.3%
Short-term
investments 27.3%
FOREIGN
INVESTMENTS 20.3%
Stocks 87.1%
Bonds 0.4%
Short-term
investments 12.5%
FOREIGN
INVESTMENTS 21.1%
*
**
INVESTMENTS JANUARY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 71.5%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.3%
AEROSPACE & DEFENSE - 0.1%
Allied Research Corp. (a)(c) 248,110 $ 961
Datron Systems, Inc. (a)(c) 136,500 1,843
2,804
DEFENSE ELECTRONICS - 0.1%
Flir Systems, Inc. (a) 190,100 1,996
Tech-Sym Corp. (a) 86,100 2,744
4,740
SHIP BUILDING & REPAIR - 0.1%
Celsius Industrier AB Class B 64,100 1,387
TOTAL AEROSPACE & DEFENSE 8,931
BASIC INDUSTRIES - 6.1%
CHEMICALS & PLASTICS - 3.4%
ADCO Technologies, Inc. 139,600 960
AEP Industries, Inc. (c) 316,289 6,958
Aceto Corp. (c) 357,870 5,815
Agrium, Inc. 275,000 3,780
Arcadian Corp. 75,900 1,632
CFC International, Inc. (a) 55,000 536
Cytec Industries, Inc. (a) 225,300 17,179
EVC International NV (a) 33,300 938
EVC International NV (a)(e) 80,000 2,254
Kemira OY sponsored ADR (e) 75,000 1,247
Lyondell Petrochemical Co. 1,952,000 48,068
Martin Color-Fi, Inc. (a) 113,000 396
Mississippi Chemical Corp. 910,300 21,506
NL Industries, Inc. (a) 80,000 1,180
Spartech Corp. 731,200 5,210
117,659
IRON & STEEL - 0.9%
Bliss & Laughlin Industries, Inc. (a) 15,000 137
Cold Metal Products, Inc. (a)(c) 518,500 2,528
Intermetco Ltd. (c) 251,700 1,443
Roanoke Electric Steel Corp. 336,100 5,294
Samuel Manu-Tech, Inc. 575,000 4,867
Slater Industries, Inc. 425,000 4,332
Steel of West Virginia, Inc. (c) 663,000 6,878
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Sudbury, Inc. (a) 430,000 $ 3,494
TriMas Corp. 190,900 3,508
UNR Industries, Inc. 57,500 489
32,970
METALS & MINING - 0.6%
Acier Leroux, Inc. (a):
Class B 150,000 502
Class B (e) 200,000 670
Aluminum of Greece SA (Reg) 15,000 614
Capral Aluminum Ltd. 2,000,000 4,325
De Beers Consolidated Mines Ltd. ADR 50,000 1,706
Kaiser Aluminum Corp. (a) 871,700 12,095
Lindberg Corp. 186,000 1,488
MAXXAM, Inc. (a) 27,200 1,132
Outokumpu OY Class A 1,100 17
22,549
PACKAGING & CONTAINERS - 0.3%
Gaylord Container Corp. Class A 35,000 385
Owens-Illinois, Inc. (a) 569,500 8,116
PCI Services, Inc. (a) 151,200 1,625
10,126
PAPER & FOREST PRODUCTS - 0.9%
Alliance Forest Products, Inc. (a) 100,000 1,884
Crown Vantage, Inc. (a) 11,000 179
Enso-Gutzeit OY Class R Free shares 1,813,500 11,314
Klippans Finpapppershrunk (a) 100,000 519
Metsa-Serla Ltd. Class B 550,000 15,050
Repola OY 75,000 1,297
Rolland, Inc. (a) 19,400 108
Specialty Paperboard, Inc. (a) 64,000 808
31,159
TOTAL BASIC INDUSTRIES 214,463
CONGLOMERATES - 0.2%
Bibby & Sons PLC 1,650,000 2,892
Quixote Corp. (c) 408,200 3,163
6,055
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 3.6%
BUILDING MATERIALS - 1.4%
American Woodmark Corp. (a) 50,000 $ 200
Centex Construction Products 75,000 1,078
Devcon International Corp. (a) 118,200 1,182
Domco Industries Ltd. 17,200 241
Drew Industries, Inc. (a)(c) 382,600 5,261
Evered Bardon PLC 17,000,000 9,771
Hong Leong Industries BHD 600,000 3,093
Hoganas AB Class B Free shares 25,000 634
Patrick Industries, Inc. (c) 617,500 7,101
Polypipe PLC 175,000 516
Raytech Corp. (c) 260,800 913
Republic Gypsum Co. 211,300 2,958
Shelter Components Corp. (c) 546,525 7,788
Watsco, Inc.:
Class A (c) 321,350 5,423
Class B cv (c) 108,780 1,795
47,954
CONSTRUCTION - 1.9%
AAF Industries PLC (a)(c) 1,250,000 378
American Homestar Corp. (a) 137,500 2,355
Belmont Homes, Inc. 100,000 1,713
Cavco Industries, Inc. (a)(c) 238,550 3,340
Crossman Communities, Inc. (a) 48,800 976
Engle Homes, Inc. 89,500 873
Higgs and Hill PLC 3,000,000 3,721
M/I Schottenstein Homes, Inc. (a) 342,600 3,854
McAlpine (Alfred) Ord. 315,388 714
McDermott (J. Ray) SA 203,900 3,390
Monaco Coach Corp. (a) 50,000 494
NCI Building Systems, Inc. (a) 167,500 4,721
Oriole Homes Corp.:
Class A 91,000 643
Class B (c) 276,800 1,972
Redman Industries, Inc. (a) 150,900 5,225
Schult Homes Corp. 106,100 1,804
Tay Homes PLC 2,000,000 4,235
Technip SA (e) 80,000 6,160
U.S. Home Corp. (a) 555,645 15,557
Volker Stevin NV 30,000 1,888
Washington Homes, Inc. (a) 215,800 1,268
65,281
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
ENGINEERING - 0.1%
Agra Industries Ltd. Class A cv 50,000 $ 328
Greiner Engineering, Inc. 21,700 317
Harding Lawson Associations Group, Inc. (a)(c) 275,600 1,964
Simard Beaudry, Inc. (a) 25,000 67
URS Corp. 333,500 2,168
4,844
REAL ESTATE INVESTMENT TRUSTS - 0.2%
Banyan Short Term Income Trust (SBI) (a)(c) 653,200 408
Banyan Strategic Land Trust (SBI) (c) 991,750 4,215
First Union Real Estate Equity & Mortgage Investments 207,300 1,555
Home Properties of NY, Inc. 75,000 1,369
Sunstone Hotel Investors, Inc. 47,000 511
8,058
TOTAL CONSTRUCTION & REAL ESTATE 126,137
DURABLES - 4.6%
AUTOS, TIRES, & ACCESSORIES - 2.2%
Autocam Corp. 141,383 1,661
Breed Technologies, Inc. 50,000 844
Cook (D.C.) Holdings PLC 405,800 368
Deflecta-Shield Corp. (a) 43,600 164
Douglas & Lomason Co. 38,000 437
Durakon Industries, Inc. (a)(c) 651,800 7,822
Federal Screw Works (c) 108,800 2,203
Forsheda AB Class B Free shares 40,000 628
Gentex Corp. (a) 140,000 3,378
Hahn Automotive Warehouse, Inc. 64,528 436
Lund International Holdings, Inc. (a)(c) 220,000 2,915
Manitou BF SA 10,000 1,045
Mercury Air Group (c) 523,720 4,517
Monro Muffler Brake, Inc. 148,723 1,989
NGK Spark Plug Co. Ord. 50,000 588
Peugeot SA Ord. 25,000 3,651
Superior Industries International, Inc. 538,800 13,201
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Transpro, Inc. 288,825 $ 2,888
Travel Ports of America (a) 79,500 209
Treadco, Inc. 66,700 475
Uni Select, Inc. (c) 580,800 4,282
Valley Forge Corp. (c) 149,000 2,794
World Fuel Services Corp. (c) 787,504 13,289
Wynn's International, Inc. 254,550 5,186
74,970
CONSUMER DURABLES - 0.6%
Beijer AG (G&L), Series B (a)(c) 275,000 2,616
Finnveden Invest AB Class B Free shares 100,000 937
Libbey, Inc. (c) 767,300 15,730
Mikasa, Inc. (a) 112,200 1,417
20,700
CONSUMER ELECTRONICS - 0.5%
International Jensen, Inc. (a)(c) 567,000 4,678
Lg Electronics, Inc. GDR (non-vtg) (a) 646,200 6,947
Mackie Designs, Inc. 79,500 636
North American Watch Corp. (c) 318,500 5,932
Toastmaster, Inc. 36,900 152
18,345
HOME FURNISHINGS - 0.4%
BMTC Group, Inc. Class A (sub. vtg.) 125,000 694
Bush Industries, Inc. Class A 224,300 5,075
Carpetright PLC 50,000 349
DMI Furniture, Inc. (a) 95,000 143
Dorel Industries (a)(e):
Class A (vtg.) 125,000 910
Class B (sub.vtg.) 325,000 2,306
Ethan Allen Interiors, Inc. 50,000 1,169
Falcon Products, Inc. 60,170 782
Haverty Furniture Companies, Inc. 178,950 2,215
Roberds, Inc. 71,600 573
Rowe Furniture Corp. 48,800 201
14,417
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.9%
Adidas AG (a)(e) 14,000 $ 799
Concord Fabrics, Inc. (a):
Class A (c) 226,300 962
Class B 65,100 277
Cone Mills Corp. (a) 199,600 2,146
Conso Products Co. (a) 29,000 522
Decorator Industries, Inc. (c) 174,800 1,398
Fila Holding Spa sponsored ADR 380,000 18,429
G-III Apparel Group Ltd. (a) 52,000 150
Jones Apparel Group, Inc. (a) 71,200 2,678
Oshkosh B'Gosh, Inc. Class A 62,800 1,068
Superior Surgical Manufacturing, Inc. 264,600 2,646
Tandy Brands Accessories, Inc. (a) 97,000 558
Yue Yuen Industrial Holdings Ltd. 600,000 152
31,785
TOTAL DURABLES 160,217
ENERGY - 3.3%
ENERGY SERVICES - 1.4%
Akita Drilling Ltd. Class A (non-vtg.) (a) 638,150 2,381
Aztec Manufacturing Co. (c) 531,500 2,458
Computalog Ltd. (a)(c) 400,000 2,476
Diamond Offshore Drilling, Inc. 76,000 2,898
Dreco Energy Services Ltd. Class A (a)(c) 414,600 7,048
Key Energy Group, Inc. (a)(c) 573,000 3,689
Nabors Industries, Inc. (a) 1,700,000 20,612
Pe Ben Oilfield Services Ltd. (a)(c) 302,000 550
Petroleum Helicopters, Inc. 102,300 1,304
Petroleum Helicopters, Inc. (non-vtg.) 254,600 3,183
RPC Energy Services, Inc. (a) 174,800 1,595
Superior Energy Services, Inc. (a)(c) 164,000 451
Veritas Energy Service, Inc. (a) 50,000 273
48,918
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - 1.9%
Adams Resources and Energy, Inc. (a) 98,800 $ 679
Alamco, Inc. (a)(c) 465,300 3,781
Barrington Petroleum Ltd. (a) 100,000 240
Belden & Blake Corp. (a) 396,400 6,442
Blue Range Resource Corp. (a):
Class A 25,000 209
Class A (e) 175,000 1,465
British Borneo Petroleum 500,000 3,101
CEC Resources Ltd. (a)(c) 126,330 679
Castle Energy Corp. (a)(c) 988,750 7,663
Columbus Energy Corp. (c) 277,526 1,526
Cube Energy Corp. (a)(c) 271,600 1,582
Discovery West Corp. (a) 200,000 633
Edisto Resources Corp. (a) 361,400 2,214
ENEX Resources Corp. (c) 144,300 1,118
Ensign Resource Service Group Ord. 101,400 545
Foremost Industries, Inc. (a) 222,500 745
Goal Petroleum Ord. 2,000,000 2,904
Giant Industries, Inc. (c) 716,600 8,598
Hallwood Consolidated Resources Corp. (a) 35,950 908
Maynard Oil Co. (a) 131,000 950
McFarland Energy, Inc. (a) 81,300 610
Neste Oy 55,000 843
Novus Petroleum Ltd. (a) 1,500,000 1,678
Petro-Canada 200,000 2,366
Petro-Canada 1st Installment Receipt (f) 146,000 864
Petroleum Development Corp. (a)(c) 1,102,500 1,516
Premier Consolidated Oilfields Ltd. Ord. 500,000 204
Reserve Royalty Corp. (a) 580,000 405
Rio Alto Exploration Ltd. (a) 50,000 180
Saga Petroleum AS Class B 50,000 549
Swift Energy Co. (a) 586,610 7,039
Unit Corp. (a) 417,100 1,721
Williams Clayton Energy, Inc. (c) 462,172 1,560
YPF Sociedad Anonima sponsored ADR representing
Class D shares 100,000 2,263
67,780
TOTAL ENERGY 116,698
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 17.2%
BANKS - 6.1%
Arrow Financial Corp. 5,000 $ 89
Banco Totta & Acores Nationalisiert (Reg) 50,000 971
Banco Pastor SA 20,000 1,068
Bank of Ireland U.S. Holdings, Inc. 151,088 1,088
Bank of Montreal 1,000,000 24,211
Bank of New York Co., Inc. (warrants) (a) 370,400 15,186
Bank of Nova Scotia Halifax 200,000 4,587
Bank Atlantic Bancorp, Inc. (c) 763,550 12,217
Bergens Skillingsbank 200,000 1,565
Christiania Bank OG Kreditkasse (e) 2,000,000 4,788
Colonial BancGroup, Inc. 166,300 5,405
First Empire State Corp. 50,000 11,250
First Mutual Savings Bank 42,000 714
Firstbank Puerto Rico (c) 1,499,500 33,739
Fokus Bank AS (a) 790,000 4,522
Fokus Bank AS (a)(e) 317,300 1,816
Foreningsbanken AB Class A Ord. (a) 500,000 1,261
GBC Bancorp (c) 424,800 7,593
Gronlandsbanken AS 10,000 460
HSBC Holdings PLC 100,000 1,655
HUBCO, Inc. 337,720 7,556
Industri & Skipsbanken 25,000 74
Nordlandsbanken AS 150,000 2,440
Nordbanken (a) 400,000 6,804
Nordbanken AB (a)(e) 107,000 1,820
Okobank Class A (a) 150,000 1,084
Ringkjobing Bank 4,000 607
River Forest Bancorp 24,000 660
SouthTrust Corp. 1,000,000 26,124
Sparebanken Norway Prime share certificates 500,000 12,967
Sparebanken More 50,000 1,136
Stadshypotek:
Series A (a) 225,000 4,265
Series A (e) 100,000 1,896
Sumitomo Bank 46,300 1,181
Syd-Sonderjylland Holding 340,000 10,913
213,712
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 1.0%
Amagerbanken AS 40,000 $ 1,235
Benpress Holdings Corp. GDR 25,500 172
Cash America Investments, Inc. 160,300 882
Cityscape Financial Corp. (a)(c) 239,500 5,449
First Financial Caribbean Corp. (c) 379,000 8,148
Greenpoint Financial Corp. 285,000 7,356
Investors Financial Services Corp. (a) 62,200 1,407
Intrum Justitia NV (Reg.) (a) 750,000 987
Mercury Finance Co. 104,500 1,332
Mid Continent Bancshares, Inc. 2,500 44
National Home Loans 550,000 886
Perpetual PLC 140,000 4,516
Surrey Metro Savings Credit Union (non-vtg.) 200,000 1,311
33,725
INSURANCE - 7.3%
Allmerica Financial Corp. 296,000 7,881
American Indemnity Financial Corp. (c) 194,000 1,940
Amwest Insurance Group, Inc. 107,500 1,599
Blanch E.W. Holdings, Inc. 400,000 9,700
Capitol American Financial Corp. 142,900 3,287
Commerce Group, Inc. 1,342,900 26,019
Condor Services, Inc. (a)(c) 107,000 709
Enhance Financial Services Group Corp. 60,700 1,472
First American Financial Corp. 224,600 5,755
First Central Financial Corp. (c) 595,000 3,756
Fremont General Corp. 138,700 4,993
Frontier Insurance Group, Inc. 225,600 7,360
Gainsco, Inc. (c) 1,410,200 16,394
GCR Holdings Ltd. (Cayman Islands) 319,000 7,297
Guarantee Life Companies, Inc. 254,050 4,128
Home State Holdings, Inc. 231,400 2,227
Intercargo Corp. 131,300 1,215
Intercontinental Life Corp. (a) 109,500 1,506
John Alden Financial Corp. 463,100 9,609
Kingsway Financial Services, Inc. 10,000 81
Lloyd Thompson Group, PLC 350,000 889
Life USA Holding, Inc. (a) 85,700 750
Life RE Corp. 69,700 1,699
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
London Insurance Group, Inc. 200,000 $ 3,950
Lowndes Lambert Group Holdings PLC 275,000 624
MMI Companies, Inc. 109,900 2,528
Merchants Group, Inc. (c) 195,100 3,414
Meridian Insurance Group, Inc. 182,700 2,603
Mid South Insurance Co. 200,720 3,095
Midland Financial Group, Inc. (a) 14,700 173
National Western Life Insurance Co. Class A (a) 109,700 6,253
Navigators Group, Inc. (a) 5,000 81
Nelson Hurst PLC 50,000 127
Pembridge, Inc. (a) 400,000 1,369
Protective Life Corp. 600,000 20,850
RLI Corp. (c) 500,000 12,625
Renaissance RE Holdings 91,500 2,745
Rightchoice Managed Care, Inc. Class A (a)(c) 282,200 4,127
Security-Connecticut Corp. (c) 445,900 11,148
Stewart Information Services Corp. (c) 531,000 11,151
Titan Holdings, Inc. 295,195 3,985
Transport Holdings, Inc. Class A (a)(c) 112,200 4,712
Unionamerica Holdings PLC sponsored ADR (a) 241,900 4,233
United Coasts Corp. (a) 195,000 1,475
United Insurance Companies, Inc. 1,442,500 33,178
United Wisconsin Services, Inc. 90,200 1,827
Western National Corp. 88,900 1,456
257,995
SAVINGS & LOANS - 2.4%
Andover Bancorp, Inc. (c) 346,100 7,311
Astoria Financial Corp. 356,000 17,489
Bankunited Financial Corp. Class A (c) 113,050 791
Cameron Financial Corp. 42,000 609
Coastal Bancorp, Inc. (c) 268,800 4,771
Collective Bancorp, Inc. 690,000 17,336
First Federal Savings & Loan Assn. 13,800 279
First Home Savings Bank FSB 60,000 1,065
Independence Federal Savings Bank (c) 119,500 926
Iroquois Bancorp, Inc. 86,000 1,161
Lakeview Financial Corp. (c) 140,866 2,430
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Pocahontas Federal Savings And Loan Association 52,000 $ 832
Poncebank (c) 579,600 8,694
Primary Bank 40,215 483
SFFed Corp. 389,096 12,354
Sovereign Bancorp, Inc. 218,525 2,172
Springfield Institution for Savings 106,780 1,909
Virginia First Financial Corp. 204,000 2,295
Warren Bancorp, Inc. (c) 267,700 2,945
85,852
SECURITIES INDUSTRY - 0.4%
BHC Financial, Inc. 44,000 743
Charles JW Financial Services, Inc. (a) 57,200 243
Harvey Norman Holdings Ltd. 100,000 604
London Pacific Group Ltd. 650,000 2,114
Raymond James Financial, Inc. 469,200 10,322
14,026
TOTAL FINANCE 605,310
HEALTH - 6.6%
DRUGS & PHARMACEUTICALS - 0.7%
Astra AB Class B Free shares 50,000 2,007
Bio-Rad Laboratories, Inc. Class A (a)(c) 407,900 16,418
Biowhittaker, Inc. (a) 72,600 581
Glaxo Holdings PLC 100,000 1,454
Nabi 299,161 3,627
Polymedica Industries, Inc. (a) 100,000 569
Santen Pharmaceutical Co. Ord. 25,000 539
Virbac SA (Societe) 1,781 234
25,429
MEDICAL EQUIPMENT & SUPPLIES - 2.4%
ADAC Laboratories 92,500 1,307
Allied Healthcare Products, Inc. 205,000 2,396
Fischer Imaging Corp. (a) 100,000 1,363
HPSC, Inc. (a)(c) 352,500 1,718
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED
Haemonetics Corp. (a) 1,362,100 $ 23,665
Herbalife International, Inc. 450,900 4,904
Hycor Biomedical, Inc. (a) 132,900 648
Laser Industries Ltd. Ord. (a)(c) 567,900 6,105
Minntech Corp. 310,000 6,045
Model Imperial, Inc. (a) 75,000 56
OEC Medical Systems, Inc. (a) 505,800 5,058
Orthofix International (a)(c) 727,400 5,819
Protocol Systems, Inc. 106,300 1,329
Scandinavian Mobility International AS (a)(e) 57,500 1,437
Scandinavian Mobility International AS (Reg) (a) 29,000 725
Spacelabs Medical, Inc. (a) 78,300 2,114
Sterile Concepts Holdings (c) 378,300 4,871
Utah Medical Products, Inc. (a)(c) 770,000 16,073
85,633
MEDICAL FACILITIES MANAGEMENT - 3.5%
Advocat, Inc. (a) 56,500 692
America Service Group, Inc. (a)(c) 239,000 1,793
Clinic Holdings Ltd. 500,000 685
Community Care of America, Inc. 85,000 1,233
Horizon Mental Health Management, Inc. 133,200 2,231
Lincare Holdings, Inc. (a) 40,800 1,081
Meadowbrook Insurance Group, Inc. (a) 25,000 822
Nexthealth, Inc. (a) 132,100 429
Rehabcare Corp. (a)(c) 426,000 7,934
Rotech Medical Corp. (a) 93,500 2,817
Sierra Health Services, Inc. (a) 140,000 4,760
Syncor International Corp. 65,300 446
TheraTx, Inc. (a) 102,300 933
Universal Health Services, Inc. Class B (a)(c) 1,022,000 50,972
Vencor, Inc. (a) 1,000,000 38,125
Vivra, Inc. (a) 269,300 6,800
121,753
TOTAL HEALTH 232,815
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.3%
Brierley Investments Ltd. 9,000,000 $ 7,808
DCC PLC 100,000 336
Marine Wendel SA 44,676 3,372
Perry Group 150,000 336
Vestmanl Lans Tidn Class B Free shares 10,000 123
11,975
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
ELECTRICAL EQUIPMENT - 0.6%
BMC Industries, Inc. (a) 260,000 5,558
Emcee Broadcast Products, Inc. (a) 45,000 332
IEC Electronics Corp. 6,900 67
Juno Lighting, Inc. 40,000 650
Murata Manufacturing Co. Ltd. 50,000 1,732
Omnipoint Corp. 4,000 83
QPL International Ltd. Ord. 2,000,000 1,953
Star Paging International Holdings Ltd. 1,002,000 206
Twentsche Kabel Holding NV 30,400 1,112
Vertex Communications Corp. (a)(c) 425,100 7,279
Yurtec Corp. 26,000 444
19,416
INDUSTRIAL MACHINERY & EQUIPMENT - 1.8%
Allied Products Corp. 400,000 8,900
Arts Way Manufacturing Co., Inc. (a) 33,500 142
Baldwin Technology, Inc. Class A (a) 241,500 966
CPAC, Inc. (a) 188,000 2,538
EDAC Technologies Corp. (a)(c) 235,000 264
Fedders Corp. Class A 219,750 1,071
Gardner Denver Machinery, Inc. (a) 118,400 2,190
Gehl Co. (a)(c) 337,000 2,359
Geveke NV 25,000 589
Hardinge Brothers, Inc. (c) 322,500 8,386
IWP International 50,000 333
IWP International (UK Reg.) 150,000 998
Kverneland Gruppen AS 75,000 1,588
Molins PLC 100,000 1,214
Oilgear Co. 12,600 183
Park Ohio Industries, Inc. (a) 254,507 3,563
Powerscreen International PLC 1,450,000 8,357
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Regal-Beloit Corp. 43,000 $ 785
Rotork PLC 100,000 278
SkyJack, Inc. (a)(e) 278,700 5,403
Speizman Industries, Inc. (a) 85,000 234
Summa Industries (a) 67,250 303
Svedala Industri 100,000 2,595
Toromont Industries Ltd. 25,000 528
Tylan General, Inc. (a) 50,000 625
Varlen Corp. 200,185 4,854
Wedco Technology, Inc. (a)(c) 206,172 2,680
61,926
POLLUTION CONTROL - 0.2%
American Ecology Corp. 146,300 439
Chempower, Inc. (a)(c) 677,700 2,541
MFRI, Inc. (a) 34,000 208
NSC Corp. 165,500 331
Sani Gestion, Inc. 87,400 305
Sevenson Environmental Services, Inc. (c) 157,200 2,850
Weston (Roy F.), Inc. Class A (a)(c) 393,800 2,043
8,717
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 90,059
MEDIA & LEISURE - 3.1%
BROADCASTING - 1.0%
Audiofina 20,000 980
Austereo Ltd. 1,012,080 1,510
BET Holdings, Inc. Class A (a) 350,000 8,574
Canwest Global System Corp. (sub. vtg.) 350,000 6,434
Carlton Communications 100,000 1,567
Cogeco, Inc. 325,000 1,982
Cogeco Cable, Inc. (c) 300,000 1,748
Electrohome Ltd. Class Y (non-vtg) 50,000 355
Metropole Television SA 2,000 189
Moffat Communications Ltd. 200,000 2,294
NRJ SA 10,000 989
Premier Choix Tvec, Inc. Class A 200,600 2,848
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Prime Television Ltd. 532,127 $ 825
Publishing & Broadcasting 800,000 3,234
Radiomutuel, Inc. Class A 25,000 69
Tele-Metropole, Inc. Class B (a) 125,000 1,809
TV 4 AB Class A 30,000 480
US Satellite Broadcasting, Inc. Class A 4,000 108
Wireless One, Inc. 3,000 48
36,043
ENTERTAINMENT - 0.2%
Alliance Communications Corp. Class A (vtg.) (a) 10,000 111
Anchor Gaming (a) 10,000 238
Carnival Cruise Lines, Inc. Class A 50,000 1,350
Cinram Ltd. 25,000 460
Sydney Aquarium Ltd. 250,000 513
United Video, Inc. (a)(c) 218,500 1,692
Vacation Break USA, Inc. (a) 75,000 525
Vaughns, Inc. (a) 63,000 575
5,464
LEISURE DURABLES & TOYS - 0.2%
Baldwin Piano & Organ Co. (a) 80,000 1,020
Brio AB B Free shares 50,700 417
Escalade, Inc. (a) 35,275 123
Varsity Spirit Corp. (c) 269,750 4,249
5,809
LODGING & GAMING - 0.1%
Resort Hotels PLC (a) 1,690,200 -
Sands Regent (c) 258,572 1,261
Sholodge, Inc. (a) 170,400 2,002
Supertel Hospitality, Inc. (a) 45,000 495
3,758
PUBLISHING - 0.9%
Aamulehti Yhtynae Oy:
Series II 34,000 804
Series II (a)(e) 25,000 591
Big Flower Press Holdings, Inc. (a) 75,000 1,125
Culturecom Holdings Ltd. 1,000,000 23
Independent Newspapers Ltd. 50,000 166
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Lee Enterprises, Inc. 9,500 $ 198
Matichon Newspaper Group 50,000 306
Mondadori Arnoldo Editore SPA 50,000 414
Nation Publishing Group (For. Reg.) 100,000 178
Perskor Groep Beperk 52,000 1,567
Sadlier (William H.), Inc. 8,000 60
Schibsted AS, Series B 100,000 1,366
Score Board, Inc. (a) 226,600 1,161
Scripps (E.W.) Co. Class A 400,000 16,250
Star Publications BHD (a) 25,000 57
Talentum Oy Class B 25,000 219
Wegener Tijil NV 15,000 1,677
WSOY (Werner Soderstrom) Class B 325,000 4,980
World Color Press, Inc. (Del) 11,000 219
31,361
RESTAURANTS - 0.7%
ARK Restaurants Corp. (a)(c) 222,600 1,447
Brinker International, Inc. (a) 400,000 5,150
Buffets, Inc. (a) 160,000 2,200
Consolidated Products, Inc. (a) 498,000 7,096
Cracker Barrel Old Country Store, Inc. 27,400 538
Elxsi Corp. 42,000 252
IHOP Corp. 5,000 109
M Corp, Inc. (c) 322,500 881
Quantum Restaurant Group, Inc. (a) 183,900 2,230
Ryan's Family Steak Houses, Inc. (a) 500,000 3,500
Sbarro, Inc. 125,000 2,781
26,184
TOTAL MEDIA & LEISURE 108,619
NONDURABLES - 2.1%
AGRICULTURE - 0.2%
Kanthal AB Class B Free shares 150,000 2,076
Sylvan Foods Holdings, Inc. (a) 289,000 3,540
5,616
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
BEVERAGES - 0.0%
Brahma (Cia Cervejaria) PN Class B (Pfd. Reg.) 1,000,000 $ 487
FOODS - 0.5%
Darling International, Inc. (a) 50,000 1,500
Foodbrands America, Inc. (a) 168,700 2,362
GoodMark Foods, Inc. 240,000 3,930
Grist Mill Co. (a) 285,200 2,210
Raision Tehtaat OY V Free shares 100,090 1,821
Riviana Foods, Inc. 551,000 7,301
Thorn Apple Valley, Inc. 11,500 181
19,305
HOUSEHOLD PRODUCTS - 1.1%
Alberto-Culver Co. Class A 55,500 1,859
Allou Health & Beauty Care, Inc. Class A (a)(c) 340,500 2,043
DSG International Ltd. (a) 125,100 1,767
Helen of Troy Corp. (a)(c) 663,600 13,190
Jean Philippe Fragrances, Inc. (a)(c) 605,000 4,764
Maybelline, Inc. 121,600 5,335
Oriflame International SA 398,700 2,460
Playtex Products, Inc. (a) 2,400 19
Safeskin Corp. (a) 38,300 708
Stephan Co. (c) 374,700 6,089
38,234
TOBACCO - 0.3%
UST, Inc. 300,000 10,087
W.D. & H.O. Wills Holdings Ltd. 408,700 695
10,782
TOTAL NONDURABLES 74,424
PRECIOUS METALS - 0.8%
Coolgardie Gold (a) 750,000 126
Industrias Penoles SA Prov. Certs 4,900,000 21,342
Richmont Mines, Inc. (a) 432,700 1,449
Royal Oak Mines, Inc. (a) 500,000 2,184
Terra Mining AB (e) 125,000 1,910
27,011
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 3.7%
APPAREL STORES - 0.4%
Buckle, Inc. (The) (a) 129,700 $ 2,481
Catherines Stores Corp. (a) 47,500 303
Chateau Stores of Canada Ltd. Class A 142,900 624
Claire's Stores, Inc. 29,000 555
Designs, Inc. (a) 217,500 1,251
Frederick's of Hollywood:
Class A 54,600 212
Class B 172,600 583
Marisa Christina, Inc. (a) 165,600 2,566
Nasan Industrial Co. (a) 1,050 23
Nasan Co. Ltd. 252 4
One Price Clothing Stores, Inc. (a) 68,300 213
Pantorama Industries, Inc. (a) 100,000 84
Ross Stores, Inc. 218,400 4,367
S & K Famous Brands, Inc. (a) 114,900 661
13,927
APPLIANCE STORES - 0.0%
Farnell Electronics PLC 60,000 586
DRUG STORES - 0.3%
Jean Coutu Group, Inc. Class A (c) 1,200,000 8,847
Vitalink Pharmacy Services, Inc. (a) 197,300 3,650
12,497
GENERAL MERCHANDISE STORES - 1.4%
Algonquin Mercantile Corp. 49,700 199
Caldor Corp. (a) 252,800 822
Dollar General Corp. 100,000 2,488
Duckwall-Alto Stores, Inc. (a) 125,000 1,219
Mac Frugals Bargains Closeouts, Inc. (a)(c) 1,490,000 20,673
Uni Marts, Inc. 229,700 1,881
Venture Stores, Inc. 150,000 713
Wal-Mart Stores, Inc. 1,000,000 20,374
48,369
GROCERY STORES - 0.6%
Food Lion, Inc. Class A 1,950,000 10,969
Iceland Group PLC 850,000 2,057
Riser Foods, Inc. Class A (c) 557,500 8,223
21,249
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Adventure Electronics, Inc. 75,000 $ 216
Betterware PLC 200,000 215
Brookstone, Inc. (a) 46,800 310
But SA 10,000 574
Celebrity, Inc. (a)(c) 333,900 1,205
Dickson Concepts International Ltd. 1,000,000 1,054
Fabri-Centers of America, Inc. (a):
Class A 69,000 940
Class B (non-vtg) 94,300 1,155
Farepak PLC 25,000 114
Finlay Enterprises, Inc. 122,900 1,352
Finish Line, Inc. Class A (a)(c) 403,600 3,027
Land's End, Inc. (a) 11,900 174
Little Switzerland, Inc. (a) 99,200 409
Luria (L.) & Son, Inc. (a)(c) 230,000 1,006
Old American Stores, Inc. (a)(c) 353,400 2,871
Partridge Fine Arts PLC 200,000 197
Piercing Pagoda, Inc. (a) 5,000 88
Rex Stores Corp. (a) 165,000 2,145
Sound Advice, Inc. (a)(c) 370,900 649
Sound Advice, Inc. (warrants) (a) 11,205 -
Vendex International NV (a)(e) 87,000 2,660
Waban, Inc. (a) 354,500 6,824
27,185
TRADING COMPANIES - 0.2%
Hagemeyer NV 110,200 6,183
International Cosmetics Ltd. 50,000 474
6,657
TOTAL RETAIL & WHOLESALE 130,470
SERVICES - 2.4%
ADVERTISING - 0.1%
American List Corp. 152,280 4,397
Ariely Advertising Ltd. (a) 107,000 910
John Singleton Advertising Ltd. 57,100 152
5,459
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
LEASING & RENTAL - 0.1%
Cort Business Services Corp. 100,000 $ 1,850
Orix Corp. 10,000 420
2,270
PRINTING - 0.7%
Cadmus Communications Corp. 194,600 5,570
Devon Group, Inc. (a)(c) 551,800 16,002
Graphic Industries, Inc. 271,300 2,883
Paris Business Forms, Inc. (a)(c) 214,500 858
Pubco Corp. (a) 150,000 900
26,213
SERVICES - 1.5%
Barbers Hairstyling for Men, Inc. 2,000 17
BIS SA Ord. (a) 5,000 455
Barefoot, Inc. 402,600 4,529
Caldwell Partners International, Inc.:
Class A (c) 322,800 3,408
Class A special (warrants) (a) 52,200 485
Concord Career Colleges, Inc. (a) 130,000 77
Craig (Jenny), Inc. (a) 391,800 3,820
Ecco Travaille Tempoire SA 30,000 2,238
FYI, Inc. (c) 131,800 2,504
Failure Group, Inc. (a) 77,000 404
Firstservice Corp. (a) 10,000 36
Franklin Quest Co. (a) 239,600 5,750
Health Care Services Group, Inc. (a) 207,800 1,948
LCS Industries, Inc. 165,700 2,568
Lawyers Title Corp. 242,000 4,296
Mail Boxes Etc. (a) 111,200 1,390
Morgan & Banks Ltd. 400,000 713
OroAmerica, Inc. (a) 296,500 1,260
Programming & Systems, Inc. (a)(c) 313,300 3
Rentokil Group PLC 500,000 2,632
Right Management Consultants, Inc. (c) 399,600 9,192
Sophus Berendsen AS, Series B 10,000 1,133
Supercuts, Inc. (a) 159,100 974
TRO Learning, Inc. (a) 60,000 908
Thomas Group (a) 41,400 538
51,278
TOTAL SERVICES 85,220
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 7.5%
COMMUNICATIONS EQUIPMENT - 0.8%
Amper SA (Reg.) (a) 75,000 $ 911
Circuit Systems, Inc. (a)(c) 532,200 3,060
Communications Systems, Inc. 271,500 4,072
Digital Systems International, Inc. (a) 48,900 630
IPC Information Systems, Inc. (a)(c) 627,300 11,919
Napco Security Systems, Inc. (a) 184,000 690
Olicom A/S (a) 25,000 294
Synt ellect, Inc. (a)(c) 777,500 2,333
Zoom Telephonics, Inc. (a) 260,000 4,615
28,524
COMPUTER SERVICES & SOFTWARE - 2.7%
Admiral Computing Group PLC (a) 35,000 439
Aladdin Knowledge Systems Ltd. 129,900 1,169
American Business Information, Inc. (a) 330,850 5,128
Ark AS (a) 73,000 1,176
BDM International, Inc. 106,600 3,065
BancTec, Inc. (a) 95,000 1,710
Black Box Corp. (a) 260,900 4,501
Brandon Systems Corp. 75,300 2,071
Computer Management Group Ltd. 25,000 157
CompuCom Systems, Inc. (a) 177,500 1,487
Computer Data Systems, Inc. (c) 503,700 7,493
Cyn Crona AB, Series B 50,000 677
Digi International, Inc. (a) 350,000 8,138
ECI Telecom Ltd. 200,000 4,300
Edusoft Ltd. 10,000 60
Enea Data AB B Free shares (c) 122,700 1,141
Equitrac Corp. (a)(c) 208,300 1,146
Frontec AB, Series B (a) 31,000 974
GSE System, Inc. (c) 305,600 4,355
GEAC Computer Ltd. (a) 175,000 3,026
Getronics NV 52,256 2,735
Government Technology Services, Inc. (a)(c) 666,500 2,499
Group 1 Software, Inc. (a) 128,100 961
Hartco Enterprises, Inc. 311,200 1,869
Inacom Corp. (a)(c) 812,000 12,585
Mai Systems Corp. 232,750 1,484
Merkantildata 50,000 414
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Misys PLC Ord. 200,000 $ 1,742
Open Text Corp. 1,500 25
Rainbow Technologies, Inc. (a) 52,500 1,119
Saturn Solutions, Inc. (a) 50,000 328
Smith Micro Software, Inc. 90,800 636
Software Spectrum, Inc. 195,700 3,767
TT Teito Oy 250,000 8,100
Triad Systems Corp. (a) 179,600 1,055
Unicomp, Inc. (a)(c) 227,800 1,566
93,098
COMPUTERS & OFFICE EQUIPMENT - 1.1%
General Scanning, Inc. 67,200 882
Genicom Corp. 520,000 2,600
Interphase Corp. (a) 36,700 395
Mizar, Inc. (a) 59,000 494
P & P PLC 500,000 1,044
PenTech International, Inc. (a) 261,300 523
Performance Technologies, Inc. 90,000 743
Quantum Corp. (a) 972,400 17,563
Seagate Technology (a) 201,700 11,950
Semi-Tech (Global) Ltd. 583,464 894
Southern Electronics Corp. 157,000 903
Spacetec IMC Corp. (a) 6,600 78
38,069
ELECTRONIC INSTRUMENTS - 0.7%
Aeroflex, Inc. (a) 429,522 1,611
BTU International, Inc. (a)(c) 423,700 2,436
Cohu, Inc. (c) 669,500 14,896
DSP Technology, Inc. (a)(c) 131,800 840
Milltronics Ltd. (a) 150,000 3,222
Reliability, Inc. (a)(c) 213,000 1,518
Voltex Holdings Ltd. 102,000 101
24,624
ELECTRONICS - 2.2%
Aiwa Co. Ltd. 50,000 1,050
Aspo Yhtynae Oy 50,000 1,724
ASM Pacific Technology Ltd. 11,500,000 10,411
Bel Fuse, Inc. (a)(c) 505,100 5,998
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Benchmarq Microelectronics, Inc. (a) 50,000 $ 331
Bergman & Beving AB Class B Free shares 258,900 6,494
C-MAC Industries, Inc. (a) 200,000 783
Corcom, Inc. (a)(c) 209,500 1,414
DH Technology, Inc. (a) 123,000 2,768
Dallas Semiconductor Corp. 120,000 2,550
Elec & Eltek International Holdings Ltd. 1,000,000 207
Exar Corp. (a) 245,250 3,587
Finvest B 357,500 297
Griffon Corp. (a) 346,700 3,207
Hadco Corp. (a) 300,000 7,237
Integrated Circuit Systems, Inc. 293,100 3,004
KOA 25,000 378
Kyocera Corp. (warrants) (a) 1,500 1,631
Micro Linear Corp. (a) 137,500 1,134
Quality Semiconductor, Inc. (c) 298,200 1,752
Robinson Nugent, Inc. (a) 40,500 238
Rohm Co. Ltd. 50,000 2,764
Samsung Electronics Co. Ltd. GDS:
(vtg) (a) 7,746 755
(non-vtg.) (Reg.) 200,000 11,200
Siliconix, Inc. (a) 50,000 1,956
Smartflex Systems, Inc. 48,000 684
Sterling Electronics Corp. (a) 180,195 2,703
Wongs Industrial International 5,350,000 886
77,143
PHOTOGRAPHIC EQUIPMENT - 0.0%
Fuji Photo Film Co. Ltd. 25,000 705
TOTAL TECHNOLOGY 262,163
TRANSPORTATION - 2.0%
AIR TRANSPORTATION - 0.2%
Helikopter Services AS 200,110 2,150
Midwest Express Holdings, Inc. 184,500 4,889
Qantas Airways Ltd. sponsored ADR (e) 47,400 776
7,815
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
RAILROADS - 1.0%
Canadian National Railway Co.
1st Installment Receipt (a)(f) 1,850,000 $ 32,666
Portec, Inc. (a)(c) 249,930 2,437
35,103
TRUCKING & FREIGHT - 0.8%
Air Express International Corp. 268,800 5,780
Arkansas Best Corp. 278,800 1,777
Arnold Industries, Inc. 538,600 7,844
Baltrans Holdings Ltd. 250,000 34
Cannon Express, Inc. (a)(c) 253,700 2,378
Cannon Express, Inc. Class B (a)(c) 285,700 2,214
Landstar System, Inc. (a) 10,000 250
Marten Transport Ltd. (a)(c) 247,400 4,144
TNT Freightways Corp. 150,000 2,775
27,196
TOTAL TRANSPORTATION 70,114
UTILITIES - 5.1%
CELLULAR - 1.0%
Century Telephone Enterprises, Inc. 932,500 31,589
Korea Mobile Telecommunications Corp. 300 376
Palmer Wireless, Inc. (a) 117,200 1,992
Vodafone Group PLC 500,000 1,800
35,757
ELECTRIC UTILITY - 0.8%
Gas Y Electricidad 25,000 1,305
Hong Kong Electric Holdings Ord. (a) 200,000 679
National Grid Co. PLC (a) 6,000,000 18,194
Northern Ireland Electric PLC 812,900 5,127
Scottish Power PLC ADR 250,000 1,441
Scottish Hydro-Electric PLC Ord. 250,000 1,337
28,083
GAS - 0.4%
Aquila Gas Pipeline Corp. 536,400 6,838
Southwestern Energy Co. 44,500 512
USX-Delhi Group (c) 621,200 6,756
14,106
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 0.4%
Atlantic Tele-Network, Inc. (a) 251,700 $ 2,769
Davel Communications GRP, Inc. (a)(c) 445,300 5,678
Portugal Telecom SA sponsored ADR (a) 200,000 4,225
Tel-Save Holdings, Inc. 37,800 633
Tele Danmark AS Class B ADR 50,000 1,394
14,699
WATER - 2.5%
Anglian Water Ord. 900,000 7,698
South West Water PLC Ord. 800,000 6,062
Southern Water PLC Ord. (a) 700,000 7,279
Thames Water PLC Ord. 700,000 5,757
Welsh Water PLC Ord. 3,100,002 34,580
Yorkshire Water Ord. 2,787,439 25,724
87,100
TOTAL UTILITIES 179,745
TOTAL COMMON STOCKS
(Cost $2,056,438) 2,510,426
PREFERRED STOCKS - 0.9%
CONVERTIBLE PREFERRED STOCKS - 0.7%
CONSTRUCTION & REAL ESTATE - 0.0%
CONSTRUCTION - 0.0%
U S Home Corp. (a) 45,000 1,238
ENERGY - 0.5%
OIL & GAS - 0.5%
Atlantic Richfield Co. exchangeable $2.23 404,300 10,158
Gerrity Oil & Gas Corp. $1.50 442,200 4,975
Goodrich Petroleum Corp., Series A 80,200 561
15,694
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
NONDURABLES - 0.2%
TOBACCO - 0.2%
RJR Nabisco Holdings Corp., Series C, depositary
shares representing 1/10 953,500 $ 6,317
TOTAL CONVERTIBLE PREFERRED STOCKS 23,249
NONCONVERTIBLE PREFERRED STOCKS - 0.2%
FINANCE - 0.0%
CREDIT & OTHER FINANCE - 0.0%
Trilon Financial Corp. Class 2, Series 3 12,100 146
SECURITIES INDUSTRY - 0.0%
Everen Capital Corp., Series A exchangeable pay-in-kind 30,265 753
TOTAL FINANCE 899
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.1%
Telecom Italia Mobile SA De Risp (a) 2,000,000 2,260
WATER - 0.1%
Welsh Water PLC 2,500,000 3,885
TOTAL UTILITIES 6,145
TOTAL NONCONVERTIBLE PREFERRED STOCKS 7,044
TOTAL PREFERRED STOCKS
(Cost $29,523) 30,293
CONVERTIBLE BONDS - 0.3%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (D) AMOUNT (000S) (C) (000S)
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
St Laurent Paperboard, Inc. 8%, 6/15/04 (e) - CAD $ 1,350 $ 1,312
ENERGY - 0.0%
OIL & GAS - 0.0%
Swift Energy Co. 6 1/2%, 6/30/03 - CAD 900 965
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Park Ohio Industries, Inc. 7 1/4%,
6/15/04 (d) - 2,000 1,972
TECHNOLOGY - 0.2%
ELECTRONICS - 0.2%
United Microelectronics Corp. euro 1 1/4%,
6/8/04 - 5,660 5,929
TOTAL CONVERTIBLE BONDS
(Cost $14,141) 10,178
U.S. TREASURY OBLIGATIONS - 10.4%
U.S Treasury Bill, yield at date of purchase
5.2187%, 3/21/96 (Cost $366,360) 369,000 366,668
REPURCHASE AGREEMENTS - 16.9%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.88% dated
1/31/96 due 2/1/96 $ 594,843 594,746
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,061,208) $ 3,512,311
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Affiliated company (see Note 6 of Notes to Financial Statements).
4. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
Park Ohio Industries, Inc.
7 1/4%, 6/15/04 6/6/94 $ 2,000
5. Security exempt from registration under
Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At the period end, the value of these securities amounted to
$40,220,000 or 1.2% of net assets.
6. Purchased on an installment basis. Market value reflects only those
payments made through January 31, 1996. The remaining installment for
Canadian National Railway, aggregating CAD 19,888,000, is due November 26,
1996. The remaining installments for Petro-Canada, aggregating CAD
1,241,000, are due September 23, 1996 and March 24, 1997.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 79.7%
United Kingdom 5.1
Canada 5.0
Finland 1.4
Sweden 1.2
Norway 1.0
Others (individually less than 1%) 6.6
TOTAL 100.0%
INCOME TAX INFORMATION
At January 31, 1996, the aggregate cost of investment securities for income
tax purposes was $3,061,597,000. Net unrealized appreciation aggregated
$450,714,000, of which $593,815,000 related to appreciated investment
securities and $143,101,000 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, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 3,512,311
agreements of $594,746) (cost $3,061,208) -
See accompanying schedule
Receivable for investments sold 11,844
Receivable for fund shares sold 7,890
Dividends receivable 2,752
Interest receivable 63
Other receivables 547
TOTAL ASSETS 3,535,407
LIABILITIES
Payable for investments purchased $ 96,506
Payable for fund shares redeemed 12,351
Accrued management fee 2,266
Other payables and accrued expenses 1,000
TOTAL LIABILITIES 112,123
NET ASSETS $ 3,423,284
Net Assets consist of:
Paid in capital $ 2,862,572
Undistributed net investment income 2,111
Accumulated undistributed net realized gain (loss) on 107,303
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 451,298
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 183,058 shares outstanding $ 3,423,284
NET ASSET VALUE and redemption price per share $18.70
($3,423,284 (divided by) 183,058 shares)
Maximum offering price per share (100/97.00 of $18.70) $19.28
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
INVESTMENT INCOME $ 15,597
Dividends (including $2,414 received from affiliated
issuers)
Interest 20,078
TOTAL INCOME 35,675
EXPENSES
Management fee $ 10,742
Basic fee
Performance adjustment 1,924
Transfer agent 3,648
Fees
Redemption fees (27)
Accounting fees and expenses 383
Non-interested trustees' compensation 25
Custodian fees and expenses 257
Registration fees 233
Audit 19
Legal 10
Miscellaneous 2
Total expenses before reductions 17,216
Expense reductions (206) 17,010
NET INVESTMENT INCOME 18,665
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of 207,884
$21,970 on sales of investments in affiliated issuers)
Foreign currency transactions 536 208,420
Change in net unrealized appreciation (depreciation) on:
Investment securities (74,235)
Assets and liabilities in foreign currencies (16) (74,251)
NET GAIN (LOSS) 134,169
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 152,834
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED
ENDED JULY 31,
JANUARY 31,1996 1995
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 18,665 $ 32,141
Net investment income
Net realized gain (loss) 208,420 175,957
Change in net unrealized appreciation (depreciation) (74,251) 345,583
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 152,834 553,681
FROM OPERATIONS
Distributions to shareholders (37,877) (12,296)
From net investment income
From net realized gain (204,729) (264,897)
TOTAL DISTRIBUTIONS (242,606) (277,193)
Share transactions 686,025 859,444
Net proceeds from sales of shares
Reinvestment of distributions 237,133 271,488
Cost of shares redeemed (357,687) (627,283)
Redemption fees 304 579
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 565,775 504,228
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 476,003 780,716
NET ASSETS
Beginning of period 2,947,281 2,166,565
End of period (including undistributed net investment $ 3,423,284 $ 2,947,281
income of $2,111 and $23,018, respectively)
OTHER INFORMATION
Shares
Sold 36,343 50,657
Issued in reinvestment of distributions 12,696 16,520
Redeemed (19,088) (37,030)
Net increase (decrease) 29,951 30,147
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED JULY 31,
ENDED
JANUARY 31,
1996
(UNAUDITED 1995 1994 E 1993 1992 1991
)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 19.25 $ 17.62 $ 17.19 $ 14.94 $ 12.63 $ 10.74
beginning of
period
Income from Invest-
ment Operations
Net investment .09 .20 .06 .15 .11 .17 D
income
Net realized and .83 3.57 2.15 2.88 2.93 2.09
unrealized
gain (loss)
Total from .92 3.77 2.21 3.03 3.04 2.26
investment
operations
Less Distributions (.23) (.09) (.16) (.10) (.15) (.14)
From net invest-
ment income
From net (1.24) (2.05) (1.62) (.69) (.60) (.26)
realized gain
Total distributions (1.47) (2.14) (1.78) (.79) (.75) (.40)
Redemption fees .00 .00 .00 .01 .02 .03
added to paid in
capital
Net asset value, $ 18.70 $ 19.25 $ 17.62 $ 17.19 $ 14.94 $ 12.63
end of period
TOTAL RETURN B, C 4.93% 23.81% 13.67% 21.32% 25.55% 22.72%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 3,423 $ 2,947 $ 2,167 $ 2,116 $ 928 $ 256
period (in millions)
Ratio of expenses to 1.07% A 1.12% 1.14% 1.12% 1.20% 1.36%
average net assets
Ratio of expenses to 1.05% A, 1.11% 1.13% 1.12% 1.20% 1.36%
average net F F F
assets after
expense
reductions
Ratio of net invest- 1.15% A 1.31% .51% 1.00% 1.27% 2.14%
ment income to
average net
assets
Portfolio turnover 85% A 65% 54% 47% 82% 84%
rate
</TABLE>
H ANNUALIZED
I THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
J TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
K INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO
$.02 PER SHARE.
L EFFECTIVE AUGUST 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
M FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Low-Priced Stock Fund (the fund) is a fund of Fidelity Puritan
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for foreign
currency transactions, passive foreign investment companies (PFIC), market
discount, partnerships, non-taxable dividends and losses deferred due to
wash sales. The fund also utilized earnings and profits distributed to
shareholders on redemptions of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 90 days are subject to a
redemption fee equal to 1.5% of the proceeds of the redeemed shares. A
portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. 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
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements that mature in
60 days or less from the date of purchase, and are collateralized by U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options
contracts to manage its exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures, writing
puts, and buying calls tend to increase the fund's exposure to the
underlying instrument. Selling futures, buying puts, and writing calls tend
to decrease the fund's exposure to the underlying instrument, or hedge
other fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $1,972,000 or
0.1% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,105,182,000 and $1,316,532,000, respectively, of which U.S.
government and government agency obligations aggregated $215,813,000 and
$219,458,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% 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 .79% of average
net assets after the performance adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $3,175,000 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.
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. For the
period, the transfer agent fees were equivalent to an annualized rate of
.22% of average net assets.
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 $221,000 for the period.
5. 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
$174,000 under this arrangement.
In addition, the fund has entered into certain arrangements with its
custodian and transfer agent whereby interest earned on univested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's custodian and transfer agent fees were reduced by $2,000
and $30,000, respectively, under these arrangements.
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 during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
AAF Industries PLC $ - $ - $ - $ 378
AEP Industries, Inc. 2,579 833 8 6,958
Aceto Corp. 1,281 - 50 5,815
Alamco, Inc. - - - 3,781
Allied Products Corp. - 2,240 - -
Allied Research Corp. 107 - - 961
Allou Health & Beauty Care, Inc.
Class A - 710 - 2,043
America Service Group, Inc. 143 - - 1,793
American Consumer Products Corp. - 915 - -
American Indemenity Financial Corp. - - 15 1,940
Andover Bancorp, Inc. - 1,070 90 7,311
ARI Holdings, Inc. - 1,915 - -
ARK Restaurants Corp. - 17 - 1,447
Aztec Manufacturing Co. 62 - - 2,458
Bank Atlantic Bancorp, Inc. - 486 86 12,217
Bankunited Financial Corp. Class A - 28 - 791
Banyan Short Term Income Trust (SBI) - - - 408
Banyan Strategic Land Trust (SBI) - - 99 4,215
Bel Fuse, Inc. 1,214 1,516 - 5,998
Beijer Ag (G&L) Series B - - - 2,616
Bio-Rad Laboritories, Inc. Class A 1,746 1,851 - 16,418
BTU International, Inc. - 187 - 2,436
Caldwell Partners International, Inc.
Class A 154 - 64 3,408
Cannon Express, Inc. 126 - - 2,378
Cannon Express, Inc. Class B 420 - - 2,214
Castle Energy Corp. - 2,217 - 7,663
Cavco Industries, Inc. - 21 - 3,340
CEC Resources Ltd. - - - 679
Celebrity, Inc. 30 - - 1,205
Chempower, Inc. - - - 2,541
Circuit Systems, Inc. 223 - - 3,060
Cityscape Financial Corp. - - - 5,449
Coastal Bancorp, Inc. - 275 45 4,771
Cogeco Cable, Inc. 22 - 11 1,748
Cohu, Inc. - 1,791 68 14,896
Cold Metal Products, Inc. - 228 - 2,528
Collective Bancorp, Inc. - 1,832 - -
Columbus Energy Corp. - 4 - 1,526
Computalog Ltd. - 744 - 2,476
Computer Data Systems, Inc. 43 - 25 7,493
Concord Fabrics, Inc. Class A - 5 - 962
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Condor Services, Inc. $ - $ - $ - $ 709
Consolidated Products, Inc. - 448 - -
Corcom, Inc. 126 - - 1,414
Cube Energy Corp. - - - 1,582
Datron Systems, Inc. - 1,089 - 1,843
Davel Communications GRP. Inc. - 65 - 5,678
Decorator Industries, Inc. - 283 24 1,398
Devon Group, Inc. - 643 - 16,002
Dreco Energy Services Ltd. Class A 37 372 - 7,048
Drew Industries, Inc. 1,100 - - 5,261
DSP Technology, Inc. - - - 840
Durakon Industries, Inc. - - - 7,822
EDAC Technologies Corp. - 92 - 264
Elco Industries, Inc. - 5,454 - -
Enea Data AB Class B Free shares - - - 1,141
ENEX Resources Corp. - - 14 1,118
Equitrac Corp. 15 - - 1,146
Exar Corp. - 4,307 - -
Federal Screw Works - - 98 2,203
Finish Line, Inc. Class A - - - 3,027
First Central Financial Corp. 126 - 35 3,756
Firstbank Puerto Rico 2,363 1,268 209 33,739
First Financial Caribbean Corp. - - 67 8,148
Foremost Industries, Inc. - 43 - -
Future Now, Inc. - - - -
FYI, Inc. 1,600 - - 2,504
Gainsco, Inc. 1,850 22 30 16,394
GBC Bancorp California - 920 72 7,593
Gehl Co. 713 1,654 - 2,359
Giant Industries, Inc. - 176 73 8,598
Government Technology Services, Inc. - - - 2,499
GSE Systems, Inc. 216 - - 4,355
Hardinge Brothers, Inc. 6,687 - - 8,386
Harding Lawson Associates Group,
Inc. - - - 1,964
Helen of Troy Corp. - - - 13,190
HPSC, Inc. - - - 1,718
Huffman Koos, Inc. - 2,322 - -
Inacom Corp. 2,803 539 - 12,585
Independence Federal Savings Bank - - - 926
Interface Systems, Inc. - 1,160 4 -
Intermetco Ltd. - 540 28 1,443
International Jensen, Inc. - - - 4,678
International Recovery Corp. - - - -
Interphase Corp. - 295 - -
IPC Information Systems, Inc. 6,292 - - 11,919
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Jean Coutu Group, Inc. Class A $ 1,153 $ - $ 40 $ 8,847
Jean Philippe Fragrances, Inc. 1,349 - - 4,764
Key Energy Group, Inc. - - - 3,689
Lakeview Financial Corp. - - 8 2,430
Laser Industries Ltd. Ord. 624 - - 6,105
Libbey, Inc. - 825 122 15,730
Lund International Holdings, Inc. - 1,395 - 2,915
Luria (L) & Son, Inc. - - - 1,006
M Corp, Inc. - 6 - 881
Mac Frugals Bargains Closeouts, Inc. - 135 - 20,673
Marten Transport Ltd. 1,300 - - 4,144
Merchants Group, Inc. - 103 20 3,414
Mercury Air Group 1,252 - 15 4,517
Minntech Corp. - 3,990 53 -
North American Watch Corp. - - 8 5,932
Old American Stores, Inc. - - - 2,871
Oriole Homes Corp. Class B - - - 1,972
Orthofix International - - - 5,819
Orthopedic Technology, Inc. - 1,075 - -
Paris Business Forms, Inc. - 17 - 858
Patrick Industries, Inc. - - 49 7,101
Pe Ben Oilfield Services Ltd. - - - 550
Petroleum Development Corp. - - - 1,516
Poncebank 2,216 94 52 8,694
Portec, Inc. - 131 - 2,437
Programming & Systems, Inc. - - - 3
Pulse Engineering, Inc. - 4,187 - -
Quality Semiconductor, Inc. 90 - - 1,752
Quixote Corp. - 2,154 51 3,163
Raytech Corp. - - - 913
Rehabcare Corp. 632 - - 7,934
Realiability, Inc. - 152 - 1,518
Right Management Consultants, Inc. - - - 9,192
Rightchoice Managed Care, Inc.
Class A 1,298 429 - 4,127
Riser Foods, Inc. Class A 1,162 783 - 8,223
RLI Corp. 75 894 135 12,625
Sands Regent 177 - - 1,261
Security - Connecticut Corp. - - 54 11,148
Serv-Tech, Inc. - 689 - -
Sevenson Environmental Services, Inc. - - - 2,850
Shelter Components Corp. 2,847 420 - 7,788
Software Spectrum, Inc. - 1,059 - -
Sound Advice, Inc. - - - 649
Steel of West Virginia, Inc. 1,159 250 - 6,878
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Stephan Co. $ 2,360 $ - $ 13 $ 6,089
Sterile Concepts Holdings 380 1,040 35 4,871
Stewart Information Services Corp. - - 58 11,151
Superior Energy Services, Inc. - - - 451
Swift Energy Co. - 909 - -
Syds-Sonderjylland Holding - - - -
Syntellect, Inc. - - - 2,333
Tay Homes PLC - - 172 4,235
Terra Mining AB - 900 - -
Transport Holdings, Inc. Class A 473 - - 4,712
Travel Ports America - 328 - -
Unicomp, Inc. - - - 1,566
Uni Select, Inc. - 268 40 4,282
United Video, Inc. - 252 - 1,692
Universal Health Services, Inc. Class B - 1,148 - 50,972
USX-Delhi Group - - 62 6,756
Utah Medical Products, Inc. - 720 - 16,073
Valley Forge Corp. 116 522 28 2,794
Varlen Corp. 2,937 4,221 33 -
Varsity Spirit Corp. - 13 16 4,249
Vertex Communications Corp. 2,226 - - 7,279
Warren Bancorp, Inc. 541 - 23 2,945
Watsco, Inc. Class A - - 11 5,423
Watsco, Inc. Class B - 569 32 1,795
Wedco Technology, Inc. - - - 2,680
Weston (Roy F.) Inc. Class A - - - 2,043
Williams Clayton Energy, Inc. - - - 1,560
World Fuel Services Corp. 2,712 - 69 13,289
Zoom Telephonics, Inc. - 343 - -
TOTALS $ 59,157 $ 70,598 $ 2,414 $ 709,700
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)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 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
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CALIFORNIA
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Americas
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UTAH
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WASHINGTON
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Bellevue, WA
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Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Joel Tillinghast, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
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Export Fund
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Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
