FIDELITY
BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 31, 1999
(fidelity_logo_graphic)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The managers' 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 30 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 34 Notes to the financial
statements.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
After the first month of 1999, U.S. stock markets seem to have
maintained their momentum from 1998, as the S&P 500, the Dow and
NASDAQ all reached record highs in January. The technology sector, and
Internet stocks in particular, were the main contributors. In the bond
markets, domestic securities continued to trade at historically low
yields, while positive economic news helped credit-sensitive sectors
outperform Treasury bonds.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY BALANCED 11.83% 22.60% 77.28% 242.39%
Fidelity Balanced Composite 11.55% 22.91% 122.69% 308.14%
S&P 500 (registered trademark) 15.02% 32.49% 196.12% 462.78%
LB Aggregate Bond 5.10% 8.08% 41.16% 140.67%
Balanced Funds Average 7.39% 14.62% 90.24% 231.93%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Fidelity Balanced Composite Index - a hypothetical combination
of unmanaged indices. The composite index combines the total returns
of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate
Bond Index. 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 mutual funds with similar objectives
tracked by Lipper Inc. The past six months average represents a peer
group of 437 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY BALANCED 22.60% 12.13% 13.10%
Fidelity Balanced Composite 22.91% 17.36% 15.10%
AVERAGE ANNUAL TOTAL RETURNS take the fund's 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
Balanced FID Balanced Composite
S&P 500 LB Aggregate Bond
00304 F0021
SP001 LB001
1989/01/31 10000.00 10000.00
10000.00 10000.00
1989/02/28 9926.67 9821.80
9751.00 9928.00
1989/03/31 10036.79 9976.00
9978.20 9970.69
1989/04/30 10362.06 10370.05
10496.07 10179.08
1989/05/31 10594.39 10731.14
10921.16 10446.79
1989/06/30 10752.62 10824.93
10858.91 10764.37
1989/07/31 11176.32 11503.65
11839.47 10993.65
1989/08/31 11242.23 11570.83
12071.52 10830.94
1989/09/30 11251.05 11565.97
12022.03 10886.18
1989/10/31 11289.19 11518.79
11743.12 11153.98
1989/11/30 11460.82 11703.55
11982.68 11259.95
1989/12/31 11575.88 11884.72
12270.26 11290.35
1990/01/31 11148.28 11349.67
11446.92 11155.99
1990/02/28 11229.73 11452.04
11594.59 11191.69
1990/03/31 11321.36 11637.34
11901.85 11199.53
1990/04/30 11166.55 11419.95
11604.30 11096.49
1990/05/31 11538.08 12223.23
12735.72 11424.95
1990/06/30 11589.40 12252.08
12649.12 11608.89
1990/07/31 11620.78 12296.18
12608.64 11769.09
1990/08/31 11129.17 11563.33
11468.82 11611.38
1990/09/30 10947.36 11263.84
10910.29 11707.76
1990/10/31 10894.32 11292.00
10863.37 11856.45
1990/11/30 11276.20 11826.79
11565.15 12111.36
1990/12/31 11522.04 12098.57
11887.81 12300.30
1991/01/31 11998.96 12475.08
12406.12 12452.82
1991/02/28 12540.92 13052.67
13293.16 12558.67
1991/03/31 12780.79 13278.22
13614.86 12645.33
1991/04/30 12989.41 13354.71
13647.53 12781.90
1991/05/31 13406.65 13731.84
14237.10 12856.03
1991/06/30 13162.89 13351.75
13585.05 12849.60
1991/07/31 13507.53 13799.30
14218.11 13028.21
1991/08/31 13818.82 14114.75
14555.08 13309.62
1991/09/30 13936.42 14087.93
14312.01 13579.81
1991/10/31 14248.17 14263.75
14503.79 13730.54
1991/11/30 13994.16 13971.34
13919.29 13856.86
1991/12/31 14607.81 15096.31
15511.65 14268.41
1992/01/31 14607.81 14845.71
15223.14 14074.36
1992/02/29 14820.72 15000.11
15421.04 14165.85
1992/03/31 14726.24 14791.01
15120.33 14086.52
1992/04/30 14905.83 15094.52
15564.86 14187.94
1992/05/31 15181.20 15253.01
15641.13 14456.09
1992/06/30 15133.59 15200.85
15408.08 14655.59
1992/07/31 15497.09 15697.91
16038.27 14954.56
1992/08/31 15581.91 15568.25
15709.48 15105.60
1992/09/30 15689.71 15752.58
15894.86 15285.36
1992/10/31 15614.52 15701.85
15950.49 15082.06
1992/11/30 15652.11 16024.37
16494.40 15085.08
1992/12/31 15768.48 16244.54
16697.28 15324.93
1993/01/31 16114.90 16451.18
16837.54 15619.17
1993/02/28 16551.13 16700.58
17066.53 15892.51
1993/03/31 17078.95 16940.06
17426.63 15959.25
1993/04/30 17624.02 16741.52
17004.91 16070.97
1993/05/31 17909.54 17019.43
17460.64 16091.86
1993/06/30 17923.66 17172.27
17511.28 16383.12
1993/07/31 18159.84 17170.21
17441.23 16476.51
1993/08/31 18750.30 17680.85
18102.25 16764.85
1993/09/30 18569.74 17618.26
17962.87 16810.11
1993/10/31 18720.94 17863.15
18334.70 16872.31
1993/11/30 18391.05 17700.60
18160.52 16728.89
1993/12/31 18808.23 17867.34
18380.26 16819.23
1994/01/31 19313.90 18328.31
19005.19 17046.29
1994/02/28 18976.79 17902.73
18490.15 16749.68
1994/03/31 18197.91 17257.52
17683.98 16335.97
1994/04/30 18041.89 17334.83
17910.33 16205.28
1994/05/31 18070.26 17504.71
18204.06 16203.66
1994/06/30 17883.86 17231.99
17758.06 16168.01
1994/07/31 18226.68 17708.28
18340.53 16489.75
1994/08/31 18398.09 18152.40
19092.49 16509.54
1994/09/30 18268.73 17778.83
18624.72 16266.85
1994/10/31 18052.96 18012.44
19043.78 16252.21
1994/11/30 17794.03 17602.98
18350.20 16216.46
1994/12/31 17808.73 17808.20
18622.34 16328.35
1995/01/31 17808.73 18226.30
19105.22 16651.65
1995/02/28 18199.97 18825.98
19849.75 17047.96
1995/03/31 18506.08 19205.25
20435.51 17151.95
1995/04/30 18696.26 19652.16
21037.34 17392.08
1995/05/31 19047.36 20427.67
21878.20 18065.15
1995/06/30 19255.25 20772.04
22386.43 18197.03
1995/07/31 19536.46 21167.04
23128.76 18157.00
1995/08/31 19580.86 21301.37
23186.82 18376.70
1995/09/30 19757.62 21923.37
24165.30 18554.95
1995/10/31 19578.01 21990.41
24079.03 18796.16
1995/11/30 20131.82 22701.58
25136.10 19078.11
1995/12/31 20462.79 23091.04
25620.22 19345.20
1996/01/31 20644.41 23623.62
26492.33 19472.88
1996/02/29 20266.03 23590.59
26737.92 19134.05
1996/03/31 20102.70 23660.84
26995.40 19000.11
1996/04/30 20163.94 23817.10
27393.32 18893.71
1996/05/31 20301.74 24166.59
28099.79 18855.92
1996/06/30 20455.89 24351.37
28206.85 19108.59
1996/07/31 19975.85 23732.16
26960.67 19160.19
1996/08/31 20208.13 24016.33
27529.27 19127.61
1996/09/30 20865.14 24994.47
29078.62 19460.44
1996/10/31 21538.71 25630.03
29880.61 19892.46
1996/11/30 22588.24 26967.76
32139.28 20232.62
1996/12/31 22373.68 26546.90
31502.60 20044.45
1997/01/31 23009.29 27575.01
33470.89 20106.59
1997/02/28 23247.65 27732.30
33733.30 20156.86
1997/03/31 22649.83 26925.46
32347.20 19933.12
1997/04/30 23211.66 28051.48
34278.32 20232.11
1997/05/31 24367.43 29182.74
36365.19 20424.32
1997/06/30 25207.37 30106.08
37994.35 20667.37
1997/07/31 26731.16 31868.55
41017.56 21225.39
1997/08/31 25936.84 30689.03
38719.76 21044.97
1997/09/30 27177.61 31879.21
40840.44 21356.44
1997/10/31 26628.22 31425.25
39476.37 21666.11
1997/11/30 27108.93 32355.88
41303.73 21765.77
1997/12/31 27619.69 32819.93
42012.91 21985.60
1998/01/31 27927.18 33205.76
42477.58 22267.02
1998/02/28 29048.60 34632.01
45541.06 22249.21
1998/03/31 30105.11 35743.22
47873.22 22324.85
1998/04/30 30305.81 36033.31
48354.82 22440.94
1998/05/31 30232.82 35798.59
47523.60 22654.13
1998/06/30 30800.81 36792.79
49454.01 22846.69
1998/07/31 30617.04 36588.59
48927.32 22894.67
1998/08/31 27860.40 33653.16
41853.41 23267.85
1998/09/30 29454.41 35261.64
44534.54 23812.32
1998/10/31 30759.48 36907.80
48156.98 23686.12
1998/11/30 31924.00 38334.14
51075.78 23821.13
1998/12/31 33203.72 39705.43
54018.76 23892.59
1999/01/29 34238.80 40814.48
56277.83 24067.00
IMATRL PRASUN SHR__CHT 19990131 19990303 083214 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Balanced Fund on January 31, 1989. As the chart
shows, by January 31, 1999, the value of the investment would have
grown to $34,239 - a 242.39% increase on the initial investment. For
comparison, look at how both the Standard & Poor's 500 Index, a market
capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard & Poor's
Index would have grown to $56,278 - a 462.78% increase. If $10,000 was
invested in the Lehman Brothers Aggregate Bond Index, it would have
grown to $24,067 - a 140.67% increase. You can also look at how the
Fidelity Balanced Composite index did over the same period. The
composite index combines the total returns of the Standard & Poor's
500 index (60%) and the Lehman Brothers Aggregate Bond Index (40%).
With dividends and interest, if any, reinvested, the same $10,000
would have grown to $40,814 - a 308.14% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
Extreme volatility was no stranger
to the U.S. stock and bond markets
during the six-month period ending
January 31, 1999. In contrast, the
U.S. economy was relatively tranquil,
as the trend of low inflation, low
unemployment and low interest
rates continued. The international
scene was another story. Economic
uncertainty abroad, particularly in
Asia and Russia, plagued the U.S.
stock markets. Then, when Russia
announced a one-two punch of
loan defaults and currency
devaluation, equity investors'
confidence hit the mat. Investors
fled the equity markets in droves,
searching for safer, less volatile
havens - particularly U.S.
Treasuries. After the near-collapse of
a major U.S. hedge fund, the U.S.
Federal Reserve Board waded in
with three cuts in key interest rates,
which boosted equity market
confidence and restored some
measure of liquidity to the
fixed-income markets. Despite some
instances of profit-taking in
technology issues and concerns
over Brazil's currency devaluation
in the first month of 1999, the
Standard and Poor's 500 Index,
Dow Jones Industrial Average and
NASDAQ all reached record highs
in January. Overall, the S&P 500(registered trademark)
index- a popular measure of U.S.
stock market performance -
returned 15.02% for the six-month
period. Meanwhile, the Lehman
Brothers Aggregate Bond Index -
a broad measure of the U.S.
taxable investment-grade bond
market - returned 5.10%.
(photograph of Kevin Grant)
(photograph of Stephen DuFour)
An interview with Stephen DuFour (right), Lead Portfolio Manager
of Fidelity Balanced Fund, and
Kevin Grant, Co-Manager for
fixed-income investments
Q. HOW DID THE FUND PERFORM, STEVE?
S.D. The fund did well. For the six and 12 months that ended January
31, 1999, the fund returned 11.83% and 22.60%, respectively. Since the
fund is made up of stocks and bonds, its performance typically falls
between that of its two benchmark indexes, the Standard & Poor's 500
Index and the Lehman Brothers Aggregate Bond Index. That held true
once again, as the returns for the S&P 500 over the same six- and
12-month periods were 15.02% and 32.49%, respectively, while the
Lehman Brothers index returned 5.10% and 8.08%, respectively.
Furthermore, the fund's performance compared favorably to that of its
peers in the balanced funds average monitored by Lipper Inc. For the
six- and 12-month periods in question, the Lipper average returned
7.39% and 14.62%, respectively.
Q. WHY DID THE FUND OUTPERFORM THE LIPPER AVERAGE BY SUCH A WIDE
MARGIN?
S.D. There were several contributing factors. The fund's allocations
to financial services stocks helped, both by underweighting them
relative to our peers during the third-quarter downturn in stocks and
by overweighting them during the recovery that followed in the fourth
quarter. In addition, a number of the fund's media and technology
holdings performed exceedingly well during the period. On the
fixed-income side, the fund was helped by overweighting high-grade
corporate securities relative to its peers, and by avoiding the issues
of companies with exposure to emerging markets.
Q. WHICH STOCKS PERFORMED WELL DURING THE PERIOD, AND WHICH FAILED TO
MEET YOUR EXPECTATIONS?
S.D. Time Warner was one of the fund's strongest performers. The
company benefited from its strong position as a likely beneficiary of
the ongoing shift to cable as the platform of choice for video, data
and voice communications. Recent accomplishments for Time Warner
include a lucrative deal to sell telephone rights on its cable network
to AT&T. Another holding that did well was Unisys, which continued to
prosper under its new CEO, Larry Weinbach. Weinbach has successfully
focused the company's efforts on providing high-end computer services.
Chase Manhattan also performed well. The stock had been beaten down
during the third-quarter market decline, as investors avoided the
shares of large money-center banks because of their international
exposure. However, Chase Manhattan's risk control procedures helped
the company to post higher fourth-quarter earnings, thereby surpassing
investors' expectations. On the negative side, Banc One underperformed
when the revenue growth and cost savings investors expected from the
company's merger with First Chicago failed to materialize. As of the
end of the period, the fund no longer owned Banc One shares.
Q. TURNING TO YOU, KEVIN, HOW DID THE FUND'S BOND HOLDINGS FARE DURING
THE PERIOD?
K.G. Russia's actions forced some funds to liquidate large positions
in corporate and mortgage securities, while investors flocked to U.S.
Treasury securities because of their reputation for safety. As a
result, the spread - that is, the difference in yield - between
Treasuries and other fixed-income securities widened dramatically, as
Treasury bond yields dropped to levels not seen in more than 30 years.
While some of the fund's holdings were hurt by this turn of events, it
also presented an opportunity to upgrade holdings in the corporate and
mortgage-backed sectors. When the fixed-income markets settled down in
the second half of the period, many of those purchases did quite well,
handily outperforming Treasuries. Barring further negative surprises
from the emerging markets, spreads for corporate and mortgage issues
could continue to narrow during the rest of 1999, which would be good
news for the fund's investors.
Q. WHAT'S YOUR OUTLOOK, STEVE?
S.D. In spite of sluggish economies in many parts of the world, growth
in the United States continues to chug along at a healthy pace. Even
parts of Asia are showing some signs of recovery. As a result, many
economists speculate that the next move by the Fed will be to raise
interest rates as a means of heading off inflationary pressures.
Regardless of how the economic scenario unfolds, however, the fund
will continue its disciplined search for stocks that represent good
value in the marketplace.
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.
(checkmark)FUND FACTS
GOAL: high income with
preservation of capital by
investing in a broadly
diversified portfolio of
high-yielding equity and debt
securities
FUND NUMBER: 304
TRADING SYMBOL: FBALX
START DATE: November 6, 1986
SIZE: as of January 31,
1999, more than $5.4
billion
MANAGERS: Stephen DuFour,
since 1997; manager,
Fidelity Convertible Securities
Fund, January 1997-July
1997; various Fidelity Select
Portfolios, 1993-1997;
joined Fidelity in 1992;
Kevin Grant, since 1997;
joined Fidelity in 1993
STEVE DUFOUR ON HIS
APPROACH TO BUYING
UNDERVALUED STOCKS:
"I look for stocks that investors
have abandoned for the wrong
reasons. Sometimes a stock
declines because of a general
market panic like the one that
occurred last fall. Times like that
are great for a value investor like
me. When indiscriminate selling
takes good stocks down with bad
ones, I'm waiting with open arms
to scoop up the bargains.
"At other times, I find value when
the basic business prospects for
an industry improve and market
participants fail to notice. For
example, I believe the energy
sector offers good value now.
Many world economies are
strengthening, indicating the
likelihood of higher demand for
energy products in the near
future. Furthermore, production
is dropping as marginal producers
cut back or go out of business
because of weak prices. More
demand and less supply should
lead to stronger energy prices and
higher profits for many companies
in the energy sector.
"Often the value catalyst is
company-specific. A new CEO, an
exciting product or technology in
the pipeline - there are many
factors to consider. Nevertheless,
all of the fund's equity holdings
share one common characteristic:
a mismatch between the current
public perception of their
prospects and the more favorable
prospects I see based on my
analysis of the companies, their
industries and, to some extent,
general market conditions."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF JANUARY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Time Warner, Inc. 4.3 2.2
Chase Manhattan Corp. 3.6 1.2
MCI WorldCom, Inc. 3.4 2.5
Unisys Corp. 3.1 2.8
Fannie Mae 2.7 2.1
TOP FIVE BOND ISSUERS AS OF
JANUARY 31, 1999
(WITH MATURITIES MORE THAN % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
ONE YEAR) THESE BOND ISSUERS 6 MONTHS
AGO
Fannie Mae 10.4 11.6
U.S. Treasury Obligations 4.0 6.4
Government National Mortgage 2.3 2.8
Association
MCI WorldCom, Inc. 0.6 0.6
TCI Communications, Inc. 0.6 0.7
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 20.9 24.8
UTILITIES 10.1 9.9
MEDIA & LEISURE 9.7 6.3
TECHNOLOGY 9.0 6.8
ENERGY 5.0 5.6
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF JANUARY 31, 1999 *
Stocks 64.2%
Bonds 33.5%
Convertible
securities 0.3%
Short-term
investments 2.0%
*FOREIGN
INVESTMENTS 3.8%
Row: 1, Col: 1, Value: 63.4
Row: 1, Col: 2, Value: 33.5
Row: 1, Col: 3, Value: 0.3
Row: 1, Col: 4, Value: 2.0
AS OF JULY 31, 1998 **
Stocks 54.4%
Bonds 39.8%
Convertible
securities 0.9%
Short-term
investments 4.9%
**FOREIGN
INVESTMENTS 4.0%
Row: 1, Col: 1, Value: 53.4
Row: 1, Col: 2, Value: 39.8
Row: 1, Col: 3, Value: 1.9
Row: 1, Col: 4, Value: 4.9
INVESTMENTS JANUARY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 64.2%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.7%
AEROSPACE & DEFENSE - 0.5%
Textron, Inc. 364,700 $ 27,147
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. Class B 189,000 10,572
TOTAL AEROSPACE & DEFENSE 37,719
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 0.7%
Crompton & Knowles Corp. 619,200 11,300
du Pont (E.I.) de Nemours & 332,000 16,994
Co.
Ferro Corp. 34,400 753
Great Lakes Chemical Corp. 91,300 3,458
Praxair, Inc. 181,400 5,861
38,366
IRON & STEEL - 0.2%
Nucor Corp. 198,400 9,722
METALS & MINING - 0.5%
Alcoa, Inc. 323,600 27,061
PAPER & FOREST PRODUCTS - 0.2%
Fort James Corp. 383,300 13,751
TOTAL BASIC INDUSTRIES 88,900
CONSTRUCTION & REAL ESTATE -
0.4%
BUILDING MATERIALS - 0.4%
Owens-Corning 455,600 16,288
Sherwin-Williams Co. 134,800 3,454
19,742
DURABLES - 4.2%
AUTOS, TIRES, & ACCESSORIES -
3.3%
Danaher Corp. 96,000 5,136
Eaton Corp. 254,900 17,747
Federal-Mogul Corp. 42,500 2,518
Ford Motor Co. 624,600 38,374
General Motors Corp. 189,900 17,044
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Lear Corp. (a) 103,900 $ 4,091
Navistar International Corp. 2,909,000 99,088
(a)
183,998
CONSUMER DURABLES - 0.2%
Minnesota Mining & 118,100 9,168
Manufacturing Co.
TEXTILES & APPAREL - 0.7%
Jones Apparel Group, Inc. (a) 94,800 2,963
Nautica Enterprises, Inc. (a) 165,300 2,603
NIKE, Inc. Class B 385,100 17,618
Polo Ralph Lauren Corp. Class 189,200 4,706
A (a)
Shaw Industries, Inc. 238,900 5,062
Unifi, Inc. 339,300 5,662
38,614
TOTAL DURABLES 231,780
ENERGY - 4.7%
ENERGY SERVICES - 0.8%
Halliburton Co. 552,800 16,411
Schlumberger Ltd. 562,200 26,775
43,186
OIL & GAS - 3.9%
Anadarko Petroleum Corp. 306,500 8,295
BP Amoco PLC sponsored ADR 365,638 29,662
Exxon Corp. 1,207,700 85,067
Mobil Corp. 539,900 47,342
Tosco Corp. 665,300 14,470
Weatherford International, 1,556,800 27,439
Inc. (a)
212,275
TOTAL ENERGY 255,461
FINANCE - 15.4%
BANKS - 5.6%
Bank of New York Co., Inc. 1,012,600 35,947
BankAmerica Corp. 1,004,100 67,149
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Chase Manhattan Corp. 2,546,500 $ 195,921
Mellon Bank Corp. 104,000 6,968
305,985
CREDIT & OTHER FINANCE - 2.6%
Associates First Capital 455,000 18,456
Corp. Class A
Citigroup, Inc. 1,156,200 64,819
Equitable Companies (The), 334,900 23,359
Inc.
Fleet Financial Group, Inc. 322,000 14,269
Household International, Inc. 309,200 13,585
MBNA Corp. 370,900 10,362
144,850
FEDERAL SPONSORED CREDIT - 3.6%
Fannie Mae 2,052,500 149,576
Freddie Mac 746,500 46,283
195,859
INSURANCE - 2.0%
Allmerica Financial Corp. 543,000 29,288
Ambac Financial Group, Inc. 30,000 1,794
American Bankers Insurance 134,400 6,182
Group, Inc.
American International Group, 379,950 39,111
Inc.
Hartford Financial Services 642,600 33,375
Group, Inc.
109,750
SAVINGS & LOANS - 0.0%
Washington Mutual, Inc. 23,600 991
SECURITIES INDUSTRY - 1.6%
Dain Rauscher Corp. 14,200 438
Franklin Resources, Inc. 141,800 4,750
Lehman Brothers Holdings, 402,500 22,012
Inc.
Merrill Lynch & Co., Inc. 195,000 14,820
Morgan Stanley, Dean Witter & 290,900 25,254
Co.
Price (T. Rowe) Associates, 330,100 12,069
Inc.
Schwab (Charles) Corp. 89,250 6,275
85,618
TOTAL FINANCE 843,053
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 4.5%
DRUGS & PHARMACEUTICALS - 3.7%
Biomatrix, Inc. (a) 280,700 $ 16,947
Bristol-Myers Squibb Co. 151,200 19,382
Lilly (Eli) & Co. 455,700 42,693
Merck & Co., Inc. 156,000 22,893
Millennium Pharmaceuticals, 23,600 896
Inc. (a)
Pharmacia & Upjohn, Inc. 318,100 18,291
Schering-Plough Corp. 227,000 12,372
Warner-Lambert Co. 981,200 70,830
204,304
MEDICAL EQUIPMENT & SUPPLIES
- - 0.8%
Baxter International, Inc. 85,000 6,030
Becton, Dickinson & Co. 317,300 11,343
Boston Scientific Corp. (a) 123,300 3,013
Guidant Corp. 104,000 6,130
Medtronic, Inc. 80,400 6,407
Millipore Corp. 362,100 11,067
43,990
TOTAL HEALTH 248,294
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.2%
ELECTRICAL EQUIPMENT - 0.9%
Anixter International, Inc. 216,400 3,503
(a)
General Electric Co. 306,200 32,113
Honeywell, Inc. 165,400 10,782
46,398
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
Caterpillar, Inc. 108,700 4,708
Ingersoll-Rand Co. 275,500 13,086
17,794
TOTAL INDUSTRIAL MACHINERY & 64,192
EQUIPMENT
MEDIA & LEISURE - 8.0%
BROADCASTING - 6.8%
CBS Corp. 660,500 22,457
Infinity Broadcasting Corp. 82,300 2,279
Class A (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
MediaOne Group, Inc. 2,003,000 $ 112,293
Time Warner, Inc. 3,723,659 232,729
369,758
ENTERTAINMENT - 0.1%
News Corp. Ltd. ADR 174,900 5,160
LODGING & GAMING - 0.1%
Promus Hotel Corp. (a) 97,700 2,919
PUBLISHING - 1.0%
Belo (A.H.) Corp. Class A 295,400 5,557
Gannet, Inc. 123,000 8,095
Meredith Corp. 888,800 33,108
Washington Post Co. Class B 17,700 10,071
56,831
RESTAURANTS - 0.0%
Marriott International, Inc. 50,000 1,756
Class A
TOTAL MEDIA & LEISURE 436,424
NONDURABLES - 1.7%
BEVERAGES - 0.3%
PepsiCo, Inc. 283,500 11,074
Seagram Co. Ltd. 114,800 5,470
16,544
FOODS - 0.4%
Nabisco Holdings Corp. Class A 36,900 1,552
Quaker Oats Co. 369,700 20,565
22,117
HOUSEHOLD PRODUCTS - 0.4%
Gillette Co. 122,200 7,179
Procter & Gamble Co. 151,100 13,731
20,910
TOBACCO - 0.6%
Philip Morris Companies, Inc. 703,200 33,050
TOTAL NONDURABLES 92,621
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - 0.0%
Newmont Mining Corp. 142,400 $ 2,519
RETAIL & WHOLESALE - 1.6%
APPAREL STORES - 0.2%
TJX Companies, Inc. 331,100 9,788
GENERAL MERCHANDISE STORES -
1.3%
Consolidated Stores Corp. (a) 836,600 13,961
Dayton Hudson Corp. 376,300 23,989
Dollar General Corp. 699,500 17,444
Nordstrom, Inc. 415,800 17,308
72,702
GROCERY STORES - 0.1%
Great Atlantic & Pacific Tea, 94,500 3,154
Inc.
TOTAL RETAIL & WHOLESALE 85,644
SERVICES - 1.0%
ADVERTISING - 1.0%
Interpublic Group of 275,400 21,791
Companies, Inc.
Omnicom Group, Inc. 527,300 33,747
55,538
TECHNOLOGY - 8.6%
COMMUNICATIONS EQUIPMENT - 0.6%
ADC Telecommunications, Inc. 658,500 26,217
(a)
Northern Telecom Ltd. 94,800 6,003
32,220
COMPUTER SERVICES & SOFTWARE
- - 0.7%
BMC Software, Inc. 44,000 2,054
Electronic Data Systems Corp. 118,100 6,193
Equifax, Inc. 94,500 3,739
J.D. Edwards & Co. (a) 23,600 479
Marketwatch.Com, Inc. (a) 1,100 76
Microsoft Corp. (a) 151,300 26,478
39,019
COMPUTERS & OFFICE EQUIPMENT
- - 4.2%
Bell & Howell Co. (a) 47,400 1,801
Compaq Computer Corp. 536,700 25,560
Data General Corp. (a) 198,800 3,889
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
EMC Corp. (a) 56,700 $ 6,173
Seagate Technology, Inc. (a) 73,600 2,995
Unisys Corp. (a) 5,144,700 170,418
Xerox Corp. 146,500 18,166
229,002
ELECTRONIC INSTRUMENTS - 1.0%
Applied Materials, Inc. (a) 397,000 25,085
KLA-Tencor Corp. (a) 98,100 5,665
Teradyne, Inc. (a) 363,900 23,972
54,722
ELECTRONICS - 2.1%
Intel Corp. 141,900 19,999
Micron Technology, Inc. (a) 423,500 33,086
Sterling Commerce, Inc. (a) 23,600 1,013
Texas Instruments, Inc. 446,600 44,158
Thomas & Betts Corp. 324,300 14,330
Vishay Intertechnology, Inc. 195,900 2,559
115,145
TOTAL TECHNOLOGY 470,108
TRANSPORTATION - 2.6%
AIR TRANSPORTATION - 0.5%
Continental Airlines, Inc. 786,700 26,846
Class B (a)
RAILROADS - 1.8%
Burlington Northern Santa Fe 1,535,400 53,163
Corp.
Canadian Pacific Ltd. 47,300 978
Kansas City Southern 118,300 5,619
Industries, Inc.
Union Pacific Corp. 687,500 35,363
95,123
TRUCKING & FREIGHT - 0.3%
CNF Transportation, Inc. 400,000 17,750
TOTAL TRANSPORTATION 139,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - 8.0%
CELLULAR - 0.2%
SkyTel Communications, Inc. 146,200 $ 3,856
(a)
Sprint Corp. Series 1 (PCS 101,350 3,231
Group) (a)
Teleglobe, Inc. 167,600 6,543
13,630
ELECTRIC UTILITY - 0.6%
Duke Energy Corp. 150,977 9,332
PG&E Corp. 684,868 21,873
31,205
GAS - 0.1%
Enron Corp. 102,200 6,745
TELEPHONE SERVICES - 7.1%
AT&T Corp. 627,900 56,982
BellSouth Corp. 768,900 34,312
GTE Corp. 242,900 16,396
MCI WorldCom, Inc. (a) 2,348,947 187,329
Qwest Communications 330,700 19,821
International, Inc. (a)
SBC Communications, Inc. 923,600 49,874
Sprint Corp. (FON Group) 251,100 21,061
385,775
TOTAL UTILITIES 437,355
TOTAL COMMON STOCKS 3,509,069
(Cost $2,536,383)
CONVERTIBLE PREFERRED STOCKS
- - 0.3%
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
Union Pacific Capital Trust:
$3.125 TIDES (d) 200,000 10,000
$3.125 50,000 2,500
12,500
CONVERTIBLE PREFERRED STOCKS
- - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Ingersoll Rand Co./Ingersoll 103,800 $ 2,556
Rand Finance $1.68 Income
PRIDES
TOTAL CONVERTIBLE PREFERRED 15,056
STOCKS
(Cost $13,551)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NONCONVERTIBLE BONDS - 13.4%
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S)
AEROSPACE & DEFENSE - 0.2%
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. 6.45% 8/15/02 Baa1 $ 13,000 13,384
BASIC INDUSTRIES - 0.2%
CHEMICALS & PLASTICS - 0.2%
Praxair, Inc. 6.15% 4/15/03 A3 10,925 10,987
CONSTRUCTION & REAL ESTATE -
0.4%
REAL ESTATE INVESTMENT TRUSTS
- - 0.4%
CenterPoint Properties Trust Baa2 2,600 2,510
6.75% 4/1/05
EOP Operating LP:
6.625% 2/15/05 Baa1 2,500 2,502
6.75% 2/15/08 Baa1 4,590 4,604
7.25% 2/15/18 Baa1 15,000 14,530
24,146
DURABLES - 0.4%
TEXTILES & APPAREL - 0.4%
Levi Strauss & Co. 7% 11/1/06 Baa3 14,500 13,558
(d)
Unifi, Inc. 6.5% 2/1/08 A3 8,670 8,531
22,089
ENERGY - 0.3%
ENERGY SERVICES - 0.1%
Baker Hughes, Inc. 6.875% A2 5,340 5,422
1/15/29 (d)
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - 0.2%
Petro-Canada, Inc. 7% 11/15/28 A3 $ 5,030 $ 5,031
Petroleum Geo-Services ASA Baa3 8,750 8,047
yankee 7.125% 3/30/28
13,078
TOTAL ENERGY 18,500
FINANCE - 5.3%
BANKS - 2.3%
ABN-Amro Bank NV, Chicago A1 6,750 6,935
6.625% 10/31/01
Banco Latinoamericano Baa2 2,300 2,276
Exportaciones SA euro 6.9%
12/4/99 (d)
Bank of New York A1 10,000 10,904
Institutional Capital Trust
A 7.78% 12/1/26 (d)
BankAmerica Corp. 10% 2/1/03 Aa3 850 984
BankBoston NA 6.375% 3/25/08 A2 5,000 5,037
BanPonce Corp.:
5.75% 3/1/99 A3 1,620 1,621
6.378% 4/8/99 A3 2,980 2,985
BanPonce Financial Corp.:
6.69% 9/21/00 A3 500 505
6.75% 8/9/01 A3 770 777
6.88% 6/16/00 A3 2,500 2,535
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 11,000 11,031
5.95% 7/15/01 A1 12,450 12,528
Capital One Bank:
6.375% 2/15/03 Baa3 5,300 5,232
7.2% 7/19/99 Baa3 18,000 18,047
Chase Manhattan Corp. 5.5% Aa3 2,400 2,409
2/15/01
Korea Development Bank:
6.625% 11/21/03 Ba2 3,070 2,911
7.125% 9/17/01 Ba2 2,170 2,127
MBNA Corp.:
6.34% 6/2/03 Baa2 1,800 1,765
6.875% 11/15/02 Baa2 8,350 8,400
NationsBank NA 5.92% 6/8/01 Aa2 6,500 6,582
NB Capital Trust IV 8.25% Aa2 6,630 7,618
4/15/27
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Providian National Bank 6.25% Baa3 $ 3,250 $ 3,272
5/7/01
Union Planters National Bank A3 4,000 4,080
6.81% 8/20/01
Zions Bancorp 8.625% 10/15/02 Baa1 6,000 6,566
127,127
CREDIT & OTHER FINANCE - 2.4%
Associates Corp. of North
America:
6% 4/15/03 Aa3 5,550 5,648
6% 7/15/05 Aa3 20,000 20,368
AT&T Capital Corp.:
6.41% 8/13/99 Baa3 7,500 7,525
7.5% 11/15/00 Baa3 8,350 8,473
BankBoston Capital Trust II A2 3,250 3,389
7.75% 12/15/26
BanPonce Trust I 8.327% 2/1/27 A3 7,150 6,883
Chase Capital I 7.67% 12/1/26 Aa3 7,635 8,273
ERP Operating LP 6.55% A3 2,000 2,014
11/15/01
Finova Capital Corp. 6.12% Baa1 5,000 5,001
5/28/02
First Security Capital I A3 4,690 5,179
8.41% 12/15/26
First Union Institutional BBB+ 2,650 2,991
Capital I 8.04% 12/1/26
Fleet Capital Trust II 7.92% A2 1,300 1,440
12/11/26
Ford Motor Credit Co. 6.2% A1 20,000 20,309
3/12/01
General Electric Capital Aaa 7,000 7,020
Corp. 6.94% 4/13/09 (c)
Household Finance Corp. 6% A2 15,000 15,077
5/8/00
KeyCorp Institutional Capital A1 4,000 4,413
A 7.826% 12/1/26
Money Store, Inc. 7.3% 12/1/02 A2 3,850 4,073
Sprint Capital Corp. 5.7% Baa1 4,070 4,087
11/15/03
132,163
INSURANCE - 0.3%
Executive Risk Capital Trust Baa3 10,000 9,786
8.675% 2/1/27
SunAmerica, Inc. 6.2% 10/31/99 Aaa 5,500 5,539
15,325
SAVINGS & LOANS - 0.2%
Great Western Finance Trust A3 8,000 8,724
II 8.206% 2/1/27
Long Island Savings Bank FSB Baa3 3,750 3,753
6.2% 4/2/01
12,477
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.1%
Amvescap PLC yankee 6.375% A3 $ 3,600 $ 3,670
5/15/03
TOTAL FINANCE 290,762
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.5%
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
Tyco International Group SA Baa1 16,000 16,232
yankee 6.125% 6/15/01
POLLUTION CONTROL - 0.2%
WMX Technologies, Inc.:
6.25% 4/1/99 Baa3 8,500 8,510
8.25% 11/15/99 Baa3 1,920 1,960
10,470
TOTAL INDUSTRIAL MACHINERY & 26,702
EQUIPMENT
MEDIA & LEISURE - 1.7%
BROADCASTING - 1.4%
Clear Channel Communications,
Inc.:
6.875% 6/15/18 Baa3 10,000 9,989
7.25% 10/15/27 Baa3 5,000 5,163
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa3 500 561
9% 9/1/08 Baa3 4,040 4,840
TCI Communications, Inc.:
8.25% 1/15/03 Baa3 4,120 4,531
8.75% 8/1/15 Baa3 14,710 18,678
9.8% 2/1/12 Baa3 6,290 8,457
Time Warner, Inc.:
6.625% 5/15/29 Baa3 6,500 6,620
6.85% 1/15/26 Baa3 10,000 10,368
6.875% 6/15/18 Baa3 4,770 5,042
74,249
PUBLISHING - 0.3%
News America Holdings, Inc. Baa3 13,000 14,623
8% 10/17/16
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
(G)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
News America, Inc.:
6.625% 1/9/08 Baa3 $ 950 $ 993
7.25% 5/18/18 Baa3 2,000 2,101
17,717
RESTAURANTS - 0.0%
Darden Restaurants, Inc. Baa1 105 104
6.375% 2/1/06
TOTAL MEDIA & LEISURE 92,070
NONDURABLES - 0.5%
BEVERAGES - 0.2%
Seagram Co. Ltd. yankee Baa3 950 914
6.875% 9/1/23
Seagram J E & Sons, Inc.:
6.625% 12/15/05 Baa3 6,000 6,114
7.6% 12/15/28 Baa3 5,000 5,327
12,355
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 5,000 5,353
TOBACCO - 0.2%
Philip Morris Companies, Inc. A2 8,980 9,585
6.95% 6/1/06
TOTAL NONDURABLES 27,293
RETAIL & WHOLESALE - 0.7%
DRUG STORES - 0.2%
Rite Aid Corp. 6% 12/15/05 (d) Baa1 8,000 8,071
GENERAL MERCHANDISE STORES -
0.2%
Dayton Hudson Corp. 6.4% A3 1,000 1,036
2/15/03
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa2 6,000 6,218
8.5% 6/15/03 Baa2 4,000 4,427
11,681
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.3%
American Stores Co. 7.5% Baa2 $ 7,000 $ 7,874
5/1/37
Kroger Co. 6% 7/1/00 Baa3 8,050 8,098
15,972
TOTAL RETAIL & WHOLESALE 35,724
TECHNOLOGY - 0.4%
COMPUTERS & OFFICE EQUIPMENT
- - 0.4%
Comdisco, Inc.:
6.375% 11/30/01 Baa1 12,000 12,110
9.3% 6/27/00 Baa2 3,750 3,949
9.45% 6/8/00 Baa2 6,000 6,319
22,378
TRANSPORTATION - 0.7%
AIR TRANSPORTATION - 0.2%
Delta Air Lines, Inc.:
equipment trust certificate Baa1 782 851
8.54% 1/2/07
9.875% 5/15/00 Baa3 2,000 2,089
9.875% 4/30/08 Baa1 4,677 5,350
8,290
RAILROADS - 0.5%
Burlington Northern Santa Fe
Corp.:
6.53% 7/15/37 Baa2 12,000 12,459
6.875% 12/1/27 Baa2 5,000 5,314
Norfolk Southern Corp. 7.05% Baa1 8,820 9,688
5/1/37
27,461
TOTAL TRANSPORTATION 35,751
UTILITIES - 2.1%
CELLULAR - 0.2%
Cable & Wireless Baa1 9,150 9,302
Communications PLC 6.375%
3/6/03
ELECTRIC UTILITY - 1.1%
Avon Energy Partners Holdings:
6.46% 3/4/08 (d) Baa2 6,800 6,893
7.05% 12/11/07 (d) Baa2 20,000 20,923
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
DR Investments UK PLC yankee A2 $ 7,500 $ 7,793
7.1% 5/15/02 (d)
Israel Electric Corp. Ltd.:
yankee 7.25% 12/15/06 (d) A3 3,000 3,018
7.75% 12/15/27 (d) A3 12,795 11,783
Texas Utilities Co. 6.375% Baa3 8,055 8,229
1/1/08
58,639
GAS - 0.2%
Southwest Gas Corp. 9.75% Baa2 8,700 9,704
6/15/02
TELEPHONE SERVICES - 0.6%
MCI WorldCom, Inc.:
6.4% 8/15/05 Baa2 14,300 14,831
7.75% 4/1/07 Baa2 7,870 8,935
8.875% 1/15/06 Baa2 9,592 10,444
34,210
TOTAL UTILITIES 111,855
TOTAL NONCONVERTIBLE BONDS 731,641
(Cost $716,859)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 5.2%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 1.2%
Fannie Mae:
5.75% 6/15/05 Aaa 10,100 10,471
6.15% 12/10/07 Aaa 2,000 2,107
7.49% 3/2/05 Aaa 11,000 12,298
Federal Agricultural Mortgage
Corp.:
7.01% 2/10/05 Aaa 1,530 1,672
7.04% 8/10/05 Aaa 2,400 2,643
Federal Home Loan Bank:
7.36% 7/1/04 Aaa 2,990 3,294
7.46% 9/9/04 Aaa 1,540 1,708
7.87% 10/20/04 Aaa 6,400 7,235
Financing Corp. Coupon Strip Aaa 4,574 3,547
0% 3/26/04
Freddie Mac 8.115% 1/31/05 Aaa 4,750 5,455
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Government Trust Certificates Aaa $ 1,524 $ 1,605
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency): Class T-3, 9.625%
5/15/02
Class 1-C, 9.25% 11/15/01 Aaa 5,515 5,853
Guaranteed Export Trust Aaa 226 225
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994 C, 6.61% 9/15/99
Private Export Funding Corp. Aaa 1,326 1,378
secured 6.86% 4/30/04
U.S. Department of Housing Aaa 6,270 7,018
and Urban Development
government guaranteed
participation certificates
Series 1995 A, 8.27% 8/1/03
66,509
U.S. TREASURY OBLIGATIONS -
4.0%
U.S. Treasury Bond:
7.625% 2/15/25 Aaa 17,575 23,246
8.75% 5/15/17 Aaa 1,740 2,432
8.875% 8/15/17 Aaa 22,365 31,643
9% 11/15/18 Aaa 6,940 10,022
U.S. Treasury Notes:
7% 7/15/06 Aaa 88,625 100,922
7.5% 11/15/01 Aaa 45,660 49,027
217,292
TOTAL U.S. GOVERNMENT AND 283,801
GOVERNMENT AGENCY OBLIGATIONS
(Cost $275,259)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 12.2%
FANNIE MAE - 9.9%
5.5% 11/1/08 to 1/1/14 Aaa 16,637 16,486
6% 1/1/12 to 1/1/29 Aaa 55,954 55,359
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FANNIE MAE - CONTINUED
6% 1/1/14 to 2/1/14 (e) Aaa $ 47,200 $ 47,407
6.5% 7/1/08 to 12/1/28 Aaa 321,164 324,093
7% 12/1/08 to 2/1/29 Aaa 85,540 87,413
7% 3/1/26 (e) Aaa 26 26
7.5% 6/1/07 to 6/1/28 Aaa 1,942 2,001
8% 9/1/17 to 12/1/27 Aaa 5,702 5,921
538,706
FREDDIE MAC - 0.0%
7% 8/1/99 to 7/1/01 Aaa 1,525 1,532
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 2.3%
7% 10/15/27 to 12/15/28 Aaa 90,745 92,957
7.5% 1/15/26 to 8/15/28 Aaa 29,853 30,847
8% 1/15/17 to 8/15/25 Aaa 1,072 1,117
9% 11/15/14 to 1/15/23 Aaa 925 993
9.5% 6/15/09 to 3/15/23 Aaa 2,161 2,316
128,230
TOTAL U.S. GOVERNMENT AGENCY 668,468
- - MORTGAGE SECURITIES
(Cost $660,345)
ASSET-BACKED SECURITIES - 1.0%
Capital Equipment Receivables Baa2 4,680 4,683
Trust 6.48% 10/15/06
Chevy Chase Auto Receivables Aaa 3,015 3,032
Trust 5.91% 12/15/04
Contimortgage Home Equity Aaa 15,000 15,009
Loan Trust 6.26% 7/15/12
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa3 3,850 3,865
6.4% 5/15/02 A1 4,250 4,300
6.4% 12/15/02 Baa3 2,360 2,369
Green Tree Financial Corp. Aaa 767 768
6.1% 4/15/27
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Key Auto Finance Trust:
6.3% 10/15/03 A2 $ 4,448 $ 4,453
6.65% 10/15/03 Baa3 1,305 1,319
KeyCorp Auto Grantor Trust A3 93 93
5.8% 7/15/00
MBNA Master Credit Card Trust Aaa 15,000 15,756
II 6.55% 1/15/07
Premier Auto Trust 6% 5/6/00 Aaa 556 556
UFSB Grantor Trust 8.2% Baa2 154 154
1/10/01
Union Acceptance Corp. 7.075% Baa2 423 424
7/10/02
TOTAL ASSET-BACKED SECURITIES 56,781
(Cost $55,791)
COMMERCIAL MORTGAGE
SECURITIES - 1.2%
CS First Boston Mortgage
Securities Corp.:
Series 1997 C2 Class D, 7.27% Baa2 5,790 5,493
1/17/35
Series 1998 FLI Class E, Baa2 12,180 11,849
6.4788% 1/10/13 (d)(f)
Equitable Life Assurance
Society of the United States
(The):
Series 174 Class B1, 7.33% Aa2 4,000 4,257
5/15/06 (d)
Series 1996 1 Class C1, 7.52% A2 4,000 4,243
5/15/06 (d)
GS Mortgage Securities Corp. Baa3 5,000 4,561
II Series 1998 GLII Class E,
6.9697% 4/13/31 (d)(f)
Morgan Stanley Capital I,
Inc. Series 1998 CF1:
Class D, 7.35% 1/15/12 Baa2 5,605 5,412
Class E, 7.35% 12/15/12 Baa3 1,934 1,704
Nomura Asset Securities Corp. Baa2 20,000 18,244
Series 1998-D6 Class A-4,
7.5718% 3/17/28 (f)
Thirteen Affiliates of Aaa 8,000 8,346
General Growth Properties,
Inc. sequential pay Series A
2, 6.602% 12/15/10 (d)
Wells Fargo Capital Markets Aaa 2,590 2,616
Apartment Financing Trust
Series APT Class 1, 6.56%
12/29/05 (d)
TOTAL COMMERCIAL MORTGAGE 66,725
SECURITIES
(Cost $68,504)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS (H) - 0.3%
MOODY'S RATINGS (UNAUDITED) (G) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Korean Republic:
global bond 8.75% 4/15/03 Ba1 $ 4,200 $ 4,386
8.875% 4/15/08 Ba1 9,220 10,015
Quebec Province yankee:
7.125% 2/9/24 A2 680 747
7.5% 7/15/23 A2 2,880 3,297
TOTAL FOREIGN GOVERNMENT AND 18,445
GOVERNMENT AGENCY OBLIGATIONS
(Cost $18,150)
SUPRANATIONAL OBLIGATIONS -
0.1%
Inter American Development Aaa 3,000 3,168
Bank yankee 6.29% 7/16/27
(Cost $2,981)
CERTIFICATES OF DEPOSIT - 0.1%
Canadian Imperial Bank of 4,500 4,560
Commerce, New York yankee
6.2% 8/1/00 (Cost $4,507)
CASH EQUIVALENTS - 2.0%
MATURITY AMOUNT (000S)
Investments in repurchase $ 3,626 3,625
agreements (U.S. Treasury
obligations), in a joint
trading account at 4.25%,
dated 1/29/99 due 2/1/99
SHARES
Taxable Central Cash Fund (b) 105,467,502 105,468
TOTAL CASH EQUIVALENTS 109,093
(Cost $109,093)
TOTAL INVESTMENT IN $ 5,466,807
SECURITIES - 100%
(Cost $4,461,423)
</TABLE>
SECURITY TYPE ABBREVIATIONS
PRIDES - Preferred Redeemable
Increased Dividend
Equity Securities
TIDES - Term Income Deferred
Equity Securities
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
(d) 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 $136,513,000 or 2.5% of net assets.
(e) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(f) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(g) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Services, Inc.
(h) For foreign government obligations not individually rated by S&P
or Moody's, the ratings listed have been assigned 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 investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 23.5% AAA, AA, A 23.0%
Baa 9.5% BBB 9.5%
Ba 0.4% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
INCOME TAX INFORMATION
At January 31, 1999, the aggregate cost of investment securities for
income tax purposes was $4,461,860,000. Net unrealized appreciation
aggregated $1,004,947,000, of which $1,051,046,000 related to
appreciated investment securities and $46,099,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) JANUARY
31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 5,466,807
value (including repurchase
agreements of $3,625) (cost
$4,461,423) - See
accompanying schedule
Receivable for investments 91,649
sold
Receivable for fund shares 9,035
sold
Dividends receivable 3,347
Interest receivable 21,172
Other receivables 464
TOTAL ASSETS 5,592,474
LIABILITIES
Payable for investments $ 56,196
purchased Regular delivery
Delayed delivery 47,357
Payable for fund shares 19,312
redeemed
Accrued management fee 1,941
Other payables and accrued 1,100
expenses
Collateral on securities 22,477
loaned, at value
TOTAL LIABILITIES 148,383
NET ASSETS $ 5,444,091
Net Assets consist of:
Paid in capital $ 4,347,567
Undistributed net investment 11,345
income
Accumulated undistributed net 79,782
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,005,397
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 322,724 $ 5,444,091
shares outstanding
NET ASSET VALUE, offering $16.87
price and redemption price
per share ($5,444,091
(divided by) 322,724 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JANUARY 31,
1999 (UNAUDITED)
INVESTMENT INCOME $ 16,782
Dividends
Interest (including income on 66,189
securities loaned of $286)
TOTAL INCOME 82,971
EXPENSES
Management fee $ 10,854
Transfer agent fees 5,517
Accounting and security 424
lending fees
Non-interested trustees' 15
compensation
Custodian fees and expenses 77
Registration fees 41
Audit 42
Legal 16
Miscellaneous 16
Total expenses before 17,002
reductions
Expense reductions (1,009) 15,993
NET INVESTMENT INCOME 66,978
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 102,533
Foreign currency transactions 122 102,655
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 401,335
Assets and liabilities in 10 401,345
foreign currencies
NET GAIN (LOSS) 504,000
NET INCREASE (DECREASE) IN $ 570,978
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1998
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 66,978 $ 134,510
income
Net realized gain (loss) 102,655 589,388
Change in net unrealized 401,345 (108,105)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 570,978 615,793
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (61,566) (143,536)
From net investment income
From net realized gain (376,204) (378,462)
TOTAL DISTRIBUTIONS (437,770) (521,998)
Share transactions Net 601,427 1,387,837
proceeds from sales of shares
Reinvestment of distributions 428,387 512,005
Cost of shares redeemed (681,614) (1,204,221)
NET INCREASE (DECREASE) IN 348,200 695,621
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 481,408 789,416
IN NET ASSETS
NET ASSETS
Beginning of period 4,962,683 4,173,267
End of period (including $ 5,444,091 $ 4,962,683
undistributed net investment
income of $11,345 and
$5,932, respectively)
OTHER INFORMATION
Shares
Sold 38,334 86,120
Issued in reinvestment of 30,096 33,230
distributions
Redeemed (43,504) (74,686)
Net increase (decrease) 24,926 44,664
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
1999
(UNAUDITED) 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.66 $ 16.49 $ 12.90 $ 13.20 $ 12.76 $ 13.84
period
Income from Investment
Operations
Net investment income .21 D .48 D .51 D .57 .62 .25
Net realized and 1.47 1.67 3.73 (.27) .27 (.17)
unrealized gain (loss)
Total from investment 1.68 2.15 4.24 .30 .89 .08
operations
Less Distributions
From net investment income (.20) (.52) (.65) (.60) (.45) (.25)
From net realized gain (1.27) (1.46) - - - (.50)
In excess of net realized - - - - - (.41)
gain
Total distributions (1.47) (1.98) (.65) (.60) (.45) (1.16)
Net asset value, end of $ 16.87 $ 16.66 $ 16.49 $ 12.90 $ 13.20 $ 12.76
period
TOTAL RETURN B, C 11.83% 14.54% 33.82% 2.25% 7.19% .37%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 5,444 $ 4,963 $ 4,173 $ 4,022 $ 5,070 $ 5,390
millions)
Ratio of expenses to average .69% A .70% .75% .82% .91% 1.02%
net assets
Ratio of expenses to average .65% A, E .67% E .74% E .79% E .90% E 1.01% E
net assets after expense
reductions
Ratio of net investment 2.72% A 2.97% 3.58% 4.12% 5.33% 4.09%
income to average net assets
Portfolio turnover rate 170% A 135% 70% 247% 269% 157%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PEIODS 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 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, 1999 (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, 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 require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Debt securities for which quotations are
readily available are valued by a pricing service at their market
values as determined by their most recent bid prices in the principal
market (sales prices if the principal market is an exchange) in which
such securities are normally traded. Securities (including restricted
securities) for which market quotations are not readily available are
valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at 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 foreign
currency contracts disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. 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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
is informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
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, options
transactions, foreign currency transactions, market discount,
non-taxable dividends and losses deferred due to wash sales and
options. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery 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 values of the securities purchased or sold on a
delayed delivery basis are identified as such in the fund's schedule
of investments. The fund may receive compensation for interest forgone
in the purchase of a delayed delivery security. With respect to
purchase commitments, the fund identifies securities as segregated in
its custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
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 $4,169,231,000 and $4,061,021,000, respectively, of which
U.S. government and government agency obligations aggregated
$1,027,862,000 and $1,169,913,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .15%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .44% of average net
assets.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (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 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 $819,000 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.
The market value of the loaned securities is determined at the close
of business of the fund and any additional required collateral is
delivered to the fund on the next business day. At period end, the
value of the securities loaned amounted to $21,451,000. The fund
received cash collateral of $22,477,000.
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 $782,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $1,000 and $226,000, respectively, under these
arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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 Investments
Money Management, Inc. (FIMM),
Merrimack, NH
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Stephen M. DuFour, Vice President
Kevin E. Grant, Vice President
Richard A. Spillane, Jr., Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
William O. McCoy *
Marvin L. Mann *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
BAL-SANN-0399 72335
1.471161.101
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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 (registered trademark) Fund
Global Balanced Fund
Growth & Income Portfolio
Growth & Income II Portfolio
Puritan(registered trademark) Fund
Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress(registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(fidelity_logo_graphic)(registered trademark)
Corporate Headquarters
www.fidelity.com
FIDELITY
GLOBAL BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 31, 1999
(fidelity_logo_graphic)(registered trademark)
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 27 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 31 Notes to the financial
statements.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
After the first month of 1999, U.S. stock markets seem to have
maintained their momentum from 1998, as the S&P 500, the Dow and
NASDAQ all reached record highs in January. The technology sector, and
Internet stocks in particular, were the main contributors. In the bond
markets, domestic securities continued to trade at historically low
yields, while positive economic news helped credit-sensitive sectors
outperform Treasury bonds.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY GLOBAL BALANCED 5.68% 17.56% 36.93% 97.41%
MSCI World 9.11% 23.62% 98.64% 157.99%
SB World Govt Bond 11.00% 13.15% 43.40% n/a
Global Flexible Portfolio 3.39% 11.29% 57.10% n/a
Funds Average
</TABLE>
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 February 1, 1993. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Morgan Stanley Capital
International World Index - a market capitalization-weighted index
that is designed to represent the performance of developed stock
markets throughout the world. As of January 31, 1999, the index
included over 1500 equity securities of companies domiciled in 22
countries. You can also compare the fund's returns to the performance
of the Salomon Brothers World Government Bond Index - a market
value-weighted index of debt issues traded in 14 world government bond
markets. To measure how the fund's performance stacked up against its
peers, you can compare it to the global flexible portfolio funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 93 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY GLOBAL BALANCED 17.56% 6.49% 12.00%
MSCI World 23.62% 14.71% 17.11%
SB World Govt Bond 13.15% 7.48% n/a
Global Flexible Portfolio 11.29% 9.37% n/a
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's 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 an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
Fidelity Global Balanced MSCI World
SB World Govt Bond
00334 MS004
SB006 1993/02/28 10000.00 10000.00
10000.00
1993/03/31 10639.77 10576.83
10153.51
1993/04/30 11203.78 11064.11
10368.08
1993/05/31 11423.65 11316.16
10472.05
1993/06/30 11299.46 11218.32
10449.72
1993/07/31 11501.06 11446.52
10479.38
1993/08/31 12163.48 11968.39
10794.43
1993/09/30 12102.98 11744.40
10922.48
1993/10/31 12649.13 12065.21
10903.98
1993/11/30 12502.84 11379.87
10825.83
1993/12/31 13096.97 11933.93
10917.94
1994/01/31 13743.86 12718.26
11005.86
1994/02/28 13246.25 12550.86
10933.99
1994/03/31 12368.06 12006.96
10918.29
1994/04/30 12198.22 12375.31
10930.85
1994/05/31 12398.03 12404.35
10834.90
1994/06/30 11806.56 12367.06
10991.21
1994/07/31 12027.25 12599.35
11078.78
1994/08/31 12278.02 12975.91
11040.40
1994/09/30 12247.93 12632.10
11120.30
1994/10/31 12087.43 12988.52
11298.58
1994/11/30 11746.38 12422.32
11143.33
1994/12/31 11595.91 12539.70
11174.03
1995/01/31 11284.95 12348.47
11408.49
1995/02/28 11405.32 12525.49
11700.51
1995/03/31 11726.32 13126.17
12395.51
1995/04/30 11906.88 13580.59
12625.08
1995/05/31 11916.91 13693.69
12980.25
1995/06/30 11947.00 13686.40
13056.66
1995/07/31 12438.52 14368.10
13087.36
1995/08/31 12358.27 14044.91
12637.64
1995/09/30 12538.83 14450.95
12919.89
1995/10/31 12418.46 14220.32
13016.19
1995/11/30 12649.17 14710.97
13163.42
1995/12/31 12930.36 15137.97
13301.24
1996/01/31 12940.43 15408.69
13136.91
1996/02/29 12728.95 15499.36
13069.92
1996/03/31 12799.44 15754.07
13051.78
1996/04/30 13161.98 16121.28
12999.79
1996/05/31 13182.12 16131.99
13002.58
1996/06/30 13282.82 16210.32
13104.81
1996/07/31 13000.85 15634.18
13356.01
1996/08/31 13031.06 15810.64
13408.00
1996/09/30 13330.51 16426.40
13462.42
1996/10/31 13392.46 16537.82
13714.33
1996/11/30 13991.35 17461.31
13895.05
1996/12/31 13932.06 17178.39
13782.71
1997/01/31 13900.78 17382.20
13414.28
1997/02/28 14046.77 17578.87
13314.14
1997/03/31 13994.63 17227.87
13212.62
1997/04/30 14140.63 17787.72
13098.18
1997/05/31 14901.89 18882.39
13452.66
1997/06/30 15538.01 19820.92
13613.15
1997/07/31 16111.56 20730.57
13507.08
1997/08/31 15298.16 19340.53
13499.06
1997/09/30 16099.75 20387.98
13786.55
1997/10/31 15482.98 19311.64
14072.64
1997/11/30 15525.52 19650.09
13856.67
1997/12/31 15675.93 19886.29
13814.81
1998/01/31 16008.10 20437.18
13949.13
1998/02/28 16715.28 21816.33
14062.52
1998/03/31 17176.02 22734.20
13923.31
1998/04/30 17497.47 22952.95
14145.91
1998/05/31 17390.32 22661.87
14179.05
1998/06/30 17604.62 23196.25
14199.99
1998/07/31 17808.20 23155.59
14218.83
1998/08/31 15879.52 20064.26
14606.10
1998/09/30 16298.56 20415.67
15382.74
1998/10/31 17111.86 22257.74
15838.39
1998/11/30 17773.35 23577.90
15614.75
1998/12/31 18458.88 24726.22
15929.10
1999/01/31 18818.89 25264.05
15782.92
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Global Balanced Fund on February 28, 1993,
shortly after the fund started. As the chart shows, by January 31,
1999, the value of the investment would have grown to $18,819 - an
88.19% increase on the initial investment. For comparison, look at how
both the Morgan Stanley Capital International World Index and Salomon
Brothers World Government Bond Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment in the Morgan Stanley Capital International World Index
would have grown to $25,264 - a 152.64% increase. If $10,000 was put
in the Salomon Brothers World Government Bond Index, it would have
grown to $15,783 - a 57.83% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
Many markets around the globe
offer the potential for significant
growth over time; however,
investing in foreign markets
means assuming greater risks
than investing in the United
States. Factors like changes in
a country's financial markets,
its local political and economic
climate, and the fluctuating
value of its currency create
these risks. For these reasons
an international fund's
performance may be more
volatile than a fund that invests
exclusively in the United States.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
A continuation of currency and
economic upheaval highlighted
the global stock and bond markets
during the six-months ending
January 31, 1999. The ongoing
Asian crisis and August's political
and economic woes in Russia
spilled over into markets worldwide,
creating a mass flight to safety.
During the especially turbulent
late summer and early fall,
investors moved assets from stocks
and riskier bond markets into safer
havens, helping the performance
of U.S. and developed bond markets.
The Lehman Brothers Aggregate
Bond Index returned 5.10% and the
Salomon Brothers World
Government Bond Index returned
11.00% during the period. After the
near-collapse of a major hedge fund
early in the fall, the U.S. Federal
Reserve Board initiated three key
interest-rate cuts, which helped
boost equity market confidence
worldwide. When all was said and
done, many developed-market
countries managed to post positive
overall returns. For the period, the
Morgan Stanley Capital
International EAFE Index - a
measure of over 1,000 securities
listed on the stock exchanges of
Europe, Australiasia and the Far
East - returned 2.29%, while the
U.S. stock markets, as measured by
the Standard & Poor's 500 Index,
returned 15.02%. Emerging-market
regions were the period's
hardest-hit players, as witnessed
by the Morgan Stanley Emerging
Market Free Index return of
- -12.25%.
(photographo of Rick Mace)
An interview with Rick Mace, Portfolio Manager of Fidelity Global
Balanced Fund
Q. HOW DID THE FUND PERFORM, RICK?
A. For the six months that ended January 31, 1999, the fund returned
5.68%. The fund compares its performance to three measures: a bond
index, an equity index and a peer group of competitor funds. The fund
lagged its bond-related benchmark - the Salomon Brothers World
Government Bond Index, which returned 11.00% and the equity-related
benchmark - the Morgan Stanley Capital International (MSCI) World
Index, which returned 9.11%. During the same period, the fund outpaced
the 3.39% return for the global flexible portfolio funds average,
tracked by Lipper Inc. For the 12 months that ended January 31, 1999,
the fund returned 17.56%. This performance beat the 13.15% return for
the Salomon Brothers Index, and the global flexible portfolio funds
average, tracked by Lipper Inc., which returned 11.29%. The fund
trailed the MSCI World index, which returned 23.62% during the same
12-month period.
Q. WHY DID THE FUND UNDERPERFORM THE MSCI WORLD INDEX?
A. A major reason was the fund's exposure to investments in
emerging-market countries as well as companies whose businesses were
negatively affected by emerging-market disruptions. This was an
important factor, even though the fund's average exposure to emerging
markets totaled less than 3% of its investments. A number of the
fund's commodity and banking-related positions performed poorly as
declining demand led to lower energy and commodity prices, while banks
reported an increase in problematic loans stemming from stagnant
economic growth in the world's emerging markets. Among the energy and
commodity-related holdings that hurt fund performance were
USX-Marathon Group, Cooper Cameron and Weatherford International in
the U.S., as well as Brazil-based Petrobras. Banking positions that
were negatively affected included Citigroup and BankAmerica Corp. in
the U.S., Argentina's Bansud and Swiss-based UBS.
Q. WHY DID THE FUND'S BOND COMPONENT UNDERPERFORM ITS BENCHMARK INDEX
DURING THE SIX-MONTH PERIOD?
A. Unlike the index, I avoided Japanese bonds because they appeared
unattractive on a yield basis and I wanted to avoid the currency risk.
Conversely, I overweighted the U.S. bond component to insulate the
portfolio from the currency impact of a strengthening dollar. This
strategy served the fund well until the last quarter when Japanese
bonds rallied on a strengthening yen. This turnaround in Japanese
bonds caused the fund to lag the index, which is heavily weighted in
Japanese bonds.
Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE LIPPER PEER GROUP?
A. The fund's holdings in telephone utilities provided a solid
contribution to total return. These stocks benefited from the
privatization of state-owned businesses and industry deregulation,
which opened up new opportunities for expansion into new markets.
These developments spawned a rash of consolidation activity as
companies sought to gain a foothold in these markets and protect their
competitive positions closer to home. U.S. telephone companies were
among the fund's top performers, including MCI WorldCom and AT&T. I
also found a number of telecommunications companies in Europe and
Japan that I felt were attractively valued, particularly among
cellular providers. These included United Kingdom-based Vodafone,
Japan's NTT Mobile Communication Network, Germany's Mannesmann and
Spain's Telefonica.
Q. DID ANY OTHER SECTORS HELP THE FUND?
A. The health care sector contributed positively, particularly those
pharmaceutical and biotech companies that have deep product lines of
successful new drugs. An example would be Eli Lilly, which has been
able to keep generic drug companies at bay by developing a new version
of its highly successful anti-depressant, Prozac. Biotechnology
company Amgen scored impressive gains after an arbitration panel gave
the company all rights to Epogen, a popular anemia drug. Other notable
contributors were Merck and Swiss companies Novartis and Roche
Holding.
Q. WHAT'S YOUR OUTLOOK, RICK?
A. I'm optimistic that Europe's economies will continue to improve. As
the past six months have proved, however, corporate earnings must be
watched carefully and a determination must be made as to whether those
earnings support prevailing valuations. As far as the situation in
Japan goes, I'll continue to look for glimmers of economic
improvement. Towards the end of the period, we began to see Japanese
companies adopt a more shareholder-friendly focus. Lastly, emerging
markets still appear to be in turmoil at this point. Continuing
economic and currency concerns, combined with social unrest, provide a
less than promising outlook for a fast recuperation.
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.
(checkmark)FUND FACTS
GOAL: high current income
with regard for both
preservation of capital and
potential for growth of
capital by investing in a
broadly diversified portfolio
of high-yielding equity and
debt securities
FUND NUMBER: 334
TRADING SYMBOL: FGBLX
START DATE: February 1, 1993
SIZE: as of January 31,
1999, more than $97 million
MANAGER: Richard Mace,
since 1996; manager,
Fidelity International Value
Fund, since 1994; manager,
Fidelity Overseas Fund, since
1996; Group Leader, Fidelity
International funds; joined
Fidelity in 1987
RICK MACE DISCUSSES
THE IMPACT OF THE EURO:
"On January 1, 1999, 11 countries
of the European Union -
including Germany, France, Italy,
Spain, the Netherlands, Belgium,
Austria, Finland, Portugal, Ireland
and Luxembourg - officially
adopted the euro as their
currency. The introduction of the
euro could have the effect of
reducing the cost of doing business
throughout Europe. This could
make Europe a more attractive
place to do business. In turn, it
could heighten interest among
multinational corporations
around the world in both owning
more European businesses and
expanding their operations in the
region. In addition, the launch of
the euro should serve to improve
the efficiency of those businesses
operating in Europe.
"In terms of the impact the euro
will have on the way I manage the
fund, it will be minimal. My
stock-selection process is built on
the foundation of individual
stock analysis and that has never
wavered. At the same time, we
may see more investment
opportunities throughout Europe,
as companies could forego the
traditional bank route and go to
the capital markets to raise money
for improvements."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF JANUARY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
MCI WorldCom, Inc. (United 1.8 1.4
States of America)
Microsoft Corp. (United 1.4 1.1
States of America)
General Electric Co. (United 1.2 1.1
States of America)
Wal-Mart Stores, Inc. (United 1.2 1.1
States of America)
AT&T Corp. (United States of 1.0 0.8
America)
TOP FIVE BOND ISSUERS AS OF
JANUARY 31, 1999
(WITH MATURITIES MORE THAN % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
ONE YEAR) THESE BOND ISSUERS 6 MONTHS
AGO
U.S. Treasury Obligations 11.4 9.1
Federal Home Loan Bank 4.8 4.8
Treuhandanstalt 3.2 3.0
French Government 2.3 1.3
United Kingdom, Great Britain 2.0 1.8
& Northern Ireland
TOP FIVE COUNTRIES AS OF
JANUARY 31, 1999
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE COUNTRIES 6 MONTHS AGO
United States of America 46.1 44.1
Japan 8.3 7.7
United Kingdom 8.1 5.8
Germany 8.0 5.6
France 6.4 5.9
</TABLE>
TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY,
INCLUDING WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT
RISKS. PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES
CONTRACTS, IF APPLICABLE.
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF JANUARY 31, 1999*
Stocks and
equity futures 62.1%
Bonds 30.3%
Convertible
securities 0.4%
Short-term
investments 7.2%
*FOREIGN
INVESTMENTS 45.1%
Row: 1, Col: 1, Value: 62.1
Row: 1, Col: 2, Value: 30.3
Row: 1, Col: 3, Value: 0.4
Row: 1, Col: 4, Value: 7.2
AS OF JULY 31, 1998**
Stocks and
equity futures 64.4%
Bonds 23.5%
Convertible
securities 0.3%
Short-term
investments 11.8%
**FOREIGN
INVESTMENTS 44.3%
Row: 1, Col: 1, Value: 64.4
Row: 1, Col: 2, Value: 23.5
Row: 1, Col: 3, Value: 0.3
Row: 1, Col: 4, Value: 11.8
INVESTMENTS JANUARY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 57.8%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
Bansud SA Class B (a) 2,500 $ 5,752
Importadora y Exportadorade 800 5,442
de la Patagonia SA
Inversiones y Representacions 200 4,600
SA sponsored GDR
Perez Companc SA Class B 1,240 5,055
Telefonica de Argentina SA 600 14,813
sponsored ADR
YPF Sociedad Anonima 1,025 32,672
sponsored ADR representing
Class D shares
68,334
AUSTRALIA - 1.0%
Amcor Ltd. 4,000 18,840
AMP Ltd. 5,500 66,738
Australia & New Zealand 9,838 64,910
Banking Group Ltd.
Australian Gas Light Co. 5,715 40,167
Brambles Industries Ltd. 1,600 43,623
Broken Hill Proprietary Co. 10,512 77,401
Ltd. (The)
Cable & Wireless Optus Ltd. 15,100 35,884
(a)
Coles Myer Ltd. 3,900 21,437
Fosters Brewing Group Ltd. 8,600 25,316
Goodman Fielder Ltd. 24,000 23,298
Harvey Norman Holdings Ltd. 4,800 42,360
Lend Lease Corp. Ltd. 2,900 38,491
Mirvac Ltd. warrants 6/30/01 1,255 245
(a)
National Australia Bank Ltd. 6,600 111,035
News Corp. Ltd. 15,777 114,567
Smith (Howard) Ltd. 2,200 15,185
Telstra Corp. Ltd. 24,800 135,066
Westfield Holdings Ltd. 7,800 45,234
WMC Ltd. 7,900 24,351
Woodside Petroleum Ltd. 4,700 21,301
965,449
BELGIUM - 0.2%
Electrabel SA 400 174,936
BRAZIL - 0.2%
Centrais Electricas 2,841,000 35,700
Brasileiras SA
Companhia de Electricidade do 27,000,000 2,849
Estado do Rio de Janeiro
(CERJ)
Companhia de Tecidos Norte de 46,000 3,309
Minas
Compania Cervejaria Brahma PN 26,000 8,791
(Pfd. Reg.) (a)
Compania Energertica Minas 764,478 9,496
Gerais
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BRAZIL - CONTINUED
Embratel Participacoes SA 2,780,000 $ 30,667
Perdigao SA (a) 9,970,000 7,268
Petrobras PN (Pfd. Reg.) 43,000 2,764
Tele Centro Sul Participacoes 2,366,000 15,660
SA (a)
Tele Norte Leste 500 4,969
Participacoes SA ADR (a)
Tele Sudeste Celular 650,000 1,855
Participacoes SA (a)
Telesp Participacoes SA (a) 2,166,500 37,407
Votorantim Celulose e Papel 350,000 3,861
SA (Pfd. Reg.)
164,596
CANADA - 1.5%
Alberta Energy Co. Ltd. 600 12,705
Bank of Montreal 1,400 61,838
Bank of Nova Scotia 2,700 58,066
Barrick Gold Corp. 2,200 41,563
BCE, Inc. 4,000 179,460
Biochem Pharma, Inc. 800 23,002
Bombardier, Inc. Class B 4,900 72,955
Bro-X Minerals Ltd. (a) 600 -
Canadian National Railway Co. 500 26,502
Canadian Natural Resources 600 9,330
Ltd. (a)
Canadian Tire Corp. Ltd. 500 13,731
Series A
Celestica, Inc. (sub-vtg.) (a) 900 30,433
CGI Group, Inc. Class A (sub. 2,300 53,649
vtg.) (a)
Edperbrascan Corp. Class A 600 7,941
(ltd. vtg.)
Enbridge, Inc. 600 27,296
Euro-Nevada Mining Corp. Ltd. 700 11,071
Great-West Lifeco, Inc. 900 15,782
High Liner Foods, Inc. (a) 100 648
Imasco Ltd. 2,700 61,640
Imperial Oil Ltd. 900 13,668
Investors Group, Inc. 900 14,829
JDS Fitel, Inc. (a) 700 31,220
Loblaw Companies Ltd. 1,100 28,024
Magna International, Inc. 200 11,944
Class A
Metro Richelieu, Inc. Class A 500 6,915
National Bank of Canada 1,000 15,517
Newbridge Networks Corp. (a) 800 28,216
Northern Telecom Ltd. 2,400 151,985
Placer Dome, Inc. 1,300 14,710
Potash Corp. of Saskatchewan 200 12,110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CANADA - CONTINUED
Power Corp. of Canada 1,300 $ 28,689
Renaissance Energy Ltd. (a) 800 8,920
Rogers Communications, Inc. 2,200 30,936
Class B (non-vtg.) (a)
Royal Bank of Canada 1,100 56,849
Seagram Co. Ltd. 2,100 100,053
Shaw Communications, Inc. 1,000 28,487
Class B
Sportscene Restaurants, Inc. 9,300 40,617
Class A
Suncor Energy, Inc. 500 13,450
Teleglobe, Inc. 1,100 42,946
Toronto Dominion Bank 1,800 75,040
Videotron Group Ltd. (sub. 900 13,728
vtg.)
Westcoast Energy, Inc. 700 14,058
1,490,523
CHILE - 0.1%
Compania Cervecerias Unidas 200 3,600
SA sponsored ADR
Compania de 600 12,225
Telecomunicaciones de Chile
SA sponsored ADR
Embotelladora Andina 1,100 15,400
sponsored ADR Class A
Enersis SA sponsored ADR 500 13,563
Santa Isabel SA sponsored ADR 1,000 5,500
Supermercados Unimarc SA 1,400 4,550
sponsored ADR
Vina Concha Stet y Toro SA 100 2,438
sponsored ADR
57,276
FINLAND - 0.9%
Merita Ltd. Series A 10,400 66,748
OY Nokia AB Series A 3,100 446,400
Sampo Insurance Co. Ltd. 2,200 93,216
Teito Corp. Class B 5,400 231,625
837,989
FRANCE - 3.1%
Alcatel Alsthom Compagnie 900 103,500
Generale d'Electricite SA
(RFD)
Atos SA (a)(d) 300 75,654
Axa SA 1,600 232,279
Banque Nationale de Paris 2,800 254,294
Cap Gemini SA 600 118,457
Castorama Dubois 580 131,770
Investissements SA
Club Mediterranee SA (a) 300 29,989
Elf Aquitaine 1,500 163,875
France Telecom SA 2,972 279,874
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - CONTINUED
Groupe Danone 625 $ 175,362
L'Oreal SA 228 164,722
Peugeot SA 60 10,196
Pinault Printemps SA 400 73,201
Promodes 264 182,034
Rhone-Poulenc SA Class A 2,800 144,725
Sanofi SA 700 137,564
Societe Generale, France 200 35,896
Class A
Suez Lyonnaise des Eaux 1,000 206,061
Synthelabo 300 76,336
Total SA Class B 82 8,395
Vivendi SA 1,400 409,351
3,013,535
GERMANY - 2.5%
Allianz AG (Reg.) 875 323,036
BASF AG 2,500 91,018
Bayer AG 2,000 76,608
Bayerische Hypo-und 1,900 123,822
Vereinsbank AG
BHF Bank AG 100 3,686
DaimlerChrysler AG (Reg.) 3,613 374,171
Deutsche Lufthansa AG (Reg.) 4,400 93,016
Deutsche Telekom AG 9,100 415,450
Dresdner Bank AG 1,700 68,555
Hoechst AG 1,600 69,793
Mannesmann AG 1,900 271,946
Munich Reinsurance AG (RFD) 300 72,519
(a)
Munich Reinsurance AG (Reg.) 300 74,632
Schering AG 400 53,685
Siemens AG 2,200 156,193
Viag AG 205 111,312
2,379,442
HONG KONG - 0.7%
Cheung Kong Holdings Ltd. 18,000 124,855
China Telecom (Hong Kong) 24,000 42,900
Ltd.
CLP Holdings Ltd. 3,500 15,899
Dairy Farm International 25,000 26,000
Holdings Ltd.
Hang Seng Bank Ltd. 4,500 37,602
Hong Kong & China Gas Co. 26,560 30,848
Ltd.
Hong Kong Telecommunications 31,447 51,691
Ltd.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HONG KONG - CONTINUED
Hutchison Whampoa Ltd. 22,000 $ 156,149
Johnson Electric Holdings 14,000 34,237
Ltd.
Li & Fung Ltd. 12,000 23,229
Sun Hung Kai Properties Ltd. 15,000 98,722
Swire Pacific Ltd. Class A 4,500 19,222
Wing Hang Bank Ltd. 8,000 16,260
677,614
IRELAND - 0.4%
Allied Irish Banks PLC 8,600 166,985
Bank of Ireland, Inc. 5,300 118,608
CRH PLC 3,677 60,147
Irish Life PLC 172 1,690
347,430
ITALY - 1.0%
Assicurazioni Generali Spa 5,900 249,922
Banca Commerciale Italiana Spa 6,300 39,826
Banca di Roma (a) 28,200 41,548
Eni Spa sponsored ADR 41,100 243,662
Fiat Spa 29,300 93,227
San Paolo-IMI Spa 8,700 140,533
Unicredito Italiano Spa 22,500 121,072
929,790
JAPAN - 8.0%
Acom Co. Ltd. 2,300 137,897
Advantest Corp. 1,600 130,012
Aeon Credit Service Ltd. 2,000 136,574
Aiful Corp. 600 39,684
Alps Electric Co. Ltd. 5,000 92,982
Asahi Breweries Ltd. 5,000 67,342
Bank of Tokyo-Mitsubishi Ltd. 13,000 154,321
Banyu Pharmaceutical Co. Ltd. 12,000 208,727
Benesse Corp. 2,000 122,831
Bridgestone Corp. 1,980 43,709
Canon, Inc. 3,000 64,500
Citizen Watch Co. Ltd. 6,000 39,839
DDI Corp. 50 191,977
Don Quijote Co. Ltd. 400 52,568
Fuji Bank Ltd. 8,000 33,602
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Fuji Coca-Cola Bottling Co. 4,000 $ 44,666
Ltd.
Fuji Heavy Industries Ltd. 15,000 84,264
Fuji Photo Film Co. Ltd. 7,000 257,945
Fuji Soft ABC, Inc. (a) 500 25,769
Fujitsu Ltd. 7,000 91,574
Fujitsu Support & Service, 1,000 73,183
Inc.
Furukawa Electric Co. Ltd. (a) 22,000 94,485
Hirose Electric Co. Ltd. 1,000 67,772
Hitachi Information Systems 14,000 151,520
Honda Motor Co. Ltd. 7,000 260,313
Hoya Corp. 3,000 153,324
Ito En Ltd. 3,000 145,851
Ito-Yokado Co. Ltd. 1,000 62,790
Japan Tobacco, Inc. 10 97,062
Kao Corp. 5,000 100,928
Kawasumi Laboratories, Inc. 8,000 133,310
Kokusai Securities Co. Ltd. 5,000 43,034
Konami Co. Ltd. 3,000 92,510
Marui Co. Ltd. 4,000 71,637
Matsushita Communication 4,000 183,130
Industrial Co. Ltd.
Matsushita Electric 10,000 170,000
Industrial Co. Ltd.
Meiwa Estate Co. Ltd. 2,000 36,076
Mikasa Coca Cola Bottling Co. 5,000 39,942
Minebea Co. Ltd. 15,000 166,080
Minolta Co. Ltd. 26,000 139,581
Mitsubishi Trust & Banking 10,000 80,914
Corp.
Mitsui Mining & Smelting Co. 7,000 34,633
Ltd.
Mori Seiki Co. Ltd. 3,000 30,639
NEC Corp. 8,000 81,842
Nichicon Corp. 8,000 92,080
Nintendo Co. Ltd. 500 46,384
Nippon System Development Co. 2,200 80,502
Nippon Telegraph & Telephone 23 185,312
Corp.
Nomura Securities Co. Ltd. 5,000 43,549
NTT Mobile Communication 7 294,623
Network, Inc. (d)
Omron Corp. 7,000 76,361
Otsuka Kagu Ltd. 600 48,291
Paris Miki, Inc. 3,000 67,901
Riso Kagaku Corp. 800 32,297
Rohm Co. Ltd. 1,000 94,056
Ryohin Keikaku Co. Ltd. 400 52,053
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Sanwa Bank Ltd. 9,000 $ 86,351
Sanyo Coca-Cola Bottling Co. 3,000 55,145
Ltd.
Senshukai Co. Ltd. 6,000 47,672
Sharp Corp. 12,000 122,350
Shikoku Coca-Cola Bottling 3,000 41,745
Co. Ltd.
Shin-Etsu Chemical Co. Ltd. 4,000 97,234
Shohkoh Fund & Co. Ltd. 400 141,900
Softbank Corp. 600 43,962
Sony Corp. 2,400 175,350
Takeda Chemical Industries 5,000 178,234
Ltd.
Takefuji Corp. 3,400 233,053
TDK Corp. 1,000 82,116
Terumo Corp. 6,000 128,844
THK Co. Ltd. 10,000 146,023
Tokyo Seimitsu Co. Ltd. 1,000 42,604
Toyota Motor Corp. 3,000 78,852
Unified-Charm Corp. 3,000 137,090
Watami Food Service Co. Ltd. 3,000 108,229
World Co. Ltd. 2,000 90,191
Yonekyu Corp. 4,000 64,628
7,746,321
LUXEMBOURG - 0.0%
Quilmes Industrial SA 600 4,800
sponsored ADR
MEXICO - 0.4%
Alfa SA de CV 1,000 2,380
Apasco SA de CV 2,000 7,227
BANACCI SA de CV Class B (a) 20,000 22,301
Cemex SA Series B 4,000 10,619
Cifra SA de CV Series C (a) 35,000 38,820
El Puerto de Liverpool SA 11,000 14,039
Class C
Fomento Economico Mexicano SA 800 17,700
de CV sponsored ADR
Grupo Carso SA de CV Class A-1 5,000 14,135
Grupo Financiero Bancomer SA 111,000 22,375
de CV Class B
Grupo Financiero Inbursa SA 2,000 3,921
Class B
Grupo Industrial Maseca SA de 800 9,750
CV sponsored ADR
Grupo Modelo SA de CV Class C 5,000 11,062
Grupo Televisa SA de CV 1,200 30,750
sponsored ADR (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - CONTINUED
Kimberly-Clark de Mexico SA 6,000 $ 17,168
de CV Class A
Telefonos de Mexico SA 2,300 117,588
sponsored ADR representing
Class L shares
339,835
NETHERLANDS - 1.8%
Aegon NV 2,200 241,662
Akzo Nobel NV 2,600 103,962
Fortis Amev NV 4,200 171,517
ING Groep NV 4,209 245,276
Koninklijke Ahold NV 6,652 258,427
Koninklijke KPN NV 1,400 77,529
Philips Electronics NV 2,200 160,187
(Bearer)
Samas Groep NV 3,500 46,915
TNT Post Group NV 1,600 55,525
Unilever NV 3,400 259,928
Vedior NV 1,800 34,147
Vnu NV 2,000 81,788
1,736,863
NETHERLANDS ANTILLES - 0.1%
Schlumberger Ltd. 1,800 85,725
NEW ZEALAND - 0.1%
Telecom Corp. of New Zealand 11,000 53,178
Ltd.
PANAMA - 0.0%
Panamerican Beverages, Inc. 900 13,725
Class A
PERU - 0.0%
Cementos Lima S.A. 300 3,750
Telefonica del Peru SA ADR 800 9,500
13,250
PORTUGAL - 0.2%
Banco Pinto & Sotto Mayor SA 3,840 83,969
Electricidade de Portugal SA 5,600 136,768
220,737
RUSSIA - 0.0%
Vimpel Communications 400 5,775
sponsored ADR (a)
SINGAPORE - 0.3%
Datacraft Asia Ltd. 13,000 25,610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SINGAPORE - CONTINUED
Elec & Eltek International 3,400 $ 19,720
Co. Ltd.
Oversea-Chinese Banking Corp. 5,000 34,279
(For. Reg.)
Overseas Union Bank Ltd. 5,000 18,617
Singapore Airlines Ltd. (For. 3,000 20,390
Reg.)
Singapore Press Holdings Ltd. 6,000 68,085
Singapore Telecommunications 25,000 35,018
Ltd.
United Overseas Bank Ltd. 7,000 41,785
(For. Reg.)
Venture Manufacturing 5,000 21,720
Singapore Ltd.
285,224
SPAIN - 0.5%
Banco Bilbao Vizcaya SA (Reg.) 7,100 106,300
Banco Santander SA 3,944 76,163
Endesa SA 3,900 108,230
Iberdrola SA 5,900 102,877
Telefonica SA 2,900 132,594
526,164
SWEDEN - 0.5%
Astra AB Class A 7,400 161,875
Ericsson (L.M.) Telefon AB 7,900 219,719
Class B
Svenska Handelsbanken 2,500 99,283
Volvo AB Class B 1,900 51,300
532,177
SWITZERLAND - 2.0%
Credit Suisse Group (Reg.) 700 111,802
Julius Baer Holding AG 23 78,265
Lindt & Spruengli AG 23 60,548
Nestle SA (Reg.) 135 247,580
Novartis AG (Reg.) 232 435,471
Roche Holding AG 31 405,081
participation certificates
Swisscom AG (a) 250 109,364
UBS AG (a) 746 241,989
Zurich Allied AG (Reg.) (a) 355 262,675
1,952,775
UNITED KINGDOM - 6.1%
3I Group PLC 6,700 69,236
Abbey National, PLC 2,300 45,075
Allied Domecq PLC 9,300 71,772
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Bank of Scotland 5,800 $ 73,583
BG PLC 20,500 126,835
Boots Co. PLC 1,000 14,530
BP Amoco PLC 31,005 419,216
BP Amoco PLC sponsored ADR 4,631 375,690
British Aerospace PLC 9,467 71,814
British American Tobacco PLC 9,300 96,333
British Telecommunications PLC 28,400 442,685
Cadbury Schweppes PLC 6,400 102,153
Diageo PLC 8,800 98,539
Dixons Group PLC 4,900 81,920
GKN PLC Class L 6,500 80,218
Glaxo Wellcome PLC 15,300 519,243
Halifax PLC 3,800 45,459
HSBC Holdings PLC 2,800 71,000
HSBC Holdings PLC Ord. 3,600 98,454
Kingfisher PLC 10,800 110,272
Lloyds TSB Group PLC 29,229 380,923
Next PLC 10,700 114,445
Orange PLC (a) 6,900 102,186
Pearson PLC 5,600 124,123
Prudential Corp. PLC 12,600 194,582
Rentokil Initial PLC 21,200 156,632
Reuters Group PLC 4,800 73,060
Saatchi & Saatchi PLC 40,400 101,047
Sainsbury (J.) PLC 8,100 57,313
Scottish & Southern Energy PLC 6,600 63,098
Shell Transport & Trading Co. 60,600 308,047
PLC (Reg.)
Smith (W H) Group 4,500 43,984
SmithKline Beecham PLC 18,034 244,587
Somerfield PLC 8,700 56,691
Tarmac PLC 52,600 91,747
Vodafone Group PLC 24,300 474,458
Wickes PLC 17,800 67,074
Yorkshire Water PLC 7,800 63,918
Zeneca Group PLC 2,900 133,137
5,865,079
UNITED STATES OF AMERICA -
26.1%
Abercrombie & Fitch Co. Class 1,650 126,225
A (a)
AES Corp. (a) 1,000 33,688
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
AFLAC, Inc. 5,000 $ 214,375
Alcoa, Inc. 3,607 301,635
Amazon.com, Inc. (a) 500 58,469
Amerada Hess Corp. 1,000 47,500
America Online, Inc. 1,500 263,531
American Express Co. 2,000 205,750
American International Group, 5,200 535,275
Inc.
Amgen, Inc. (a) 2,000 255,625
Applied Materials, Inc. (a) 1,000 63,188
Associates First Capital 6,048 245,322
Corp. Class A
AT&T Corp. 11,000 998,250
AutoZone, Inc. (a) 1,000 33,875
Avon Products, Inc. 7,000 258,563
Baker Hughes, Inc. 4,400 74,250
Bank of New York Co., Inc. 13,200 468,600
Bank One Corp. 2,650 138,794
Baxter International, Inc. 2,000 141,875
Becton, Dickinson & Co. 2,000 71,500
Bed Bath & Beyond, Inc. (a) 3,000 96,000
Bell Atlantic Corp. 3,500 210,000
Black & Decker Corp. 2,000 106,000
BMC Software, Inc. 1,000 46,688
Burlington Resources, Inc. 2,500 75,625
Cardinal Health, Inc. 1,500 110,906
CBS Corp. 5,000 170,000
Centex Corp. 2,000 86,375
Chancellor Media Corp. (a) 1,000 57,500
Chase Manhattan Corp. 2,000 153,875
Chevron Corp. 1,500 112,125
Cisco Systems, Inc. (a) 3,000 334,687
Citigroup, Inc. 6,250 350,391
Clear Channel Communications, 1,000 61,875
Inc. (a)
Clorox Co. 1,000 125,125
Comcast Corp. Class A 2,000 135,969
(special)
Compaq Computer Corp. 4,000 190,500
Cooper Cameron Corp. (a) 2,500 58,438
Corn Products International, 2,000 53,125
Inc.
Crescent Real Estate Equities 1,000 21,188
Co.
CVS Corp. 1,000 54,750
Dell Computer Corp. (a) 6,000 600,000
DST Systems, Inc. (a) 1,000 61,938
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
du Pont (E.I.) de Nemours & 2,100 $ 107,494
Co.
Duke Energy Corp. 2,500 154,531
EMC Corp. (a) 2,000 217,750
Exxon Corp. 1,000 70,438
Fannie Mae 1,000 72,875
Fleet Financial Group, Inc. 3,000 132,938
Ford Motor Co. 3,000 184,313
Forest Laboratories, Inc. (a) 2,000 92,375
Freddie Mac 5,000 310,000
Gap, Inc. 2,000 128,375
General Electric Co. 11,000 1,153,625
General Motors Corp. Class H 2,000 98,500
(a)
Gillette Co. 7,400 434,750
GTE Corp. 2,000 135,000
Guidant Corp. 4,000 235,750
Halliburton Co. 5,400 160,313
Hartford Financial Services 1,000 51,938
Group, Inc.
Home Depot, Inc. 4,500 271,688
Household International, Inc. 4,293 188,624
Intel Corp. 4,000 563,750
International Business 3,200 586,400
Machines Corp.
Interpublic Group of 3,000 237,375
Companies, Inc.
Johnson & Johnson 4,500 382,500
KLA-Tencor Corp. (a) 2,500 144,375
Leggett & Platt, Inc. 6,200 126,325
Lennar Corp. 1,000 27,375
Lilly (Eli) & Co. 5,000 468,438
Liz Claiborne, Inc. 1,500 57,375
Lowe's Companies, Inc. 1,000 58,313
Lucent Technologies, Inc. 3,000 337,688
Masco Corp. 4,000 129,250
MCI WorldCom, Inc. (a) 21,304 1,698,994
MediaOne Group, Inc. 2,000 112,125
Medtronic, Inc. 4,651 370,627
Merck & Co., Inc. 3,500 513,625
Merrill Lynch & Co., Inc. 800 60,800
Microsoft Corp. (a) 7,500 1,312,500
Morgan Stanley, Dean Witter & 1,000 86,813
Co.
Nabisco Holdings Corp. Class A 500 21,031
National Mercantile Bancorp 2,403 0
warrants 6/2/99 (a)
Newell Co. 4,000 166,250
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED STATES OF AMERICA -
CONTINUED
Nielsen Media Research, Inc. 3,000 $ 56,625
(a)
Noble Affiliates, Inc. 500 9,844
Omnicom Group, Inc. 3,000 192,000
Oracle Corp. (a) 3,000 166,125
Owens-Illinois, Inc. (a) 1,000 29,250
PepsiCo, Inc. 4,000 156,250
PG&E Corp. 2,000 63,875
Philip Morris Companies, Inc. 6,000 282,000
Phillips Petroleum Co. 1,000 38,625
Procter & Gamble Co. 4,000 363,500
Qwest Communications 2,000 119,875
International, Inc. (a)
Rite Aid Corp. 2,000 98,250
Safeskin Corp. (a) 2,000 46,750
Schering-Plough Corp. 5,800 316,100
Seagate Technology, Inc. (a) 3,000 122,063
Seagull Energy Corp. (a) 1,000 4,813
Sealed Air Corp. (a) 2,000 106,125
Siebel Systems, Inc. (a) 4,000 175,000
Sonic Automotive, Inc. (a) 4,000 68,000
Steris Corp. (a) 2,000 60,250
Tel-Save.com, Inc. (a) 5,000 63,438
Tele-Communications, Inc. 1,000 68,563
(TCI Group) Series A (a)
Textron, Inc. 2,500 186,094
Time Warner, Inc. 300 18,750
Tosco Corp. 1,200 26,100
Tyco International Ltd. 1,500 115,594
U.S. Bancorp 6,000 202,125
Union Pacific Resources 1,000 8,063
Group, Inc.
Unisys Corp. (a) 6,300 208,688
USX-Marathon Group 6,500 147,875
Viacom, Inc. Class B 1,000 85,000
(non-vtg.) (a)
Wal-Mart Stores, Inc. 13,000 1,118,000
Warner-Lambert Co. 3,500 252,656
Washington Mutual, Inc. 5,080 213,360
Waters Corp. (a) 2,500 227,500
Wells Fargo & Co. 9,000 314,438
25,204,140
TOTAL COMMON STOCKS 55,692,682
(Cost $43,647,127)
PREFERRED STOCKS - 1.2%
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS
- - 0.2%
AUSTRALIA - 0.1%
WBK Trust $3.135 STRYPES 1,700 $ 55,250
JAPAN - 0.1%
AJL PEPS Trust $1.44 15,000 104,063
TOTAL CONVERTIBLE PREFERRED 159,313
STOCKS
NONCONVERTIBLE PREFERRED
STOCKS - 1.0%
GERMANY - 0.3%
Dyckerhoff AG 190 46,619
Porsche AG (non-vtg.) 29 69,015
SAP AG (Systeme Anwendungen 350 139,074
Produkte)
Wella AG 64 44,347
299,055
ITALY - 0.7%
Telecom Italia Mobile Spa 35,600 148,455
Telecom Italia Spa Risp 77,100 524,352
672,807
TOTAL NONCONVERTIBLE 971,862
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 1,131,175
(Cost $1,206,117)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.2%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (C)
JAPAN - 0.2%
MBL International Finance of A2 $ 240,000 247,200
Bermuda Trust 3% 11/30/02
(Cost $277,225)
GOVERNMENT OBLIGATIONS -
30.8% (F)
FRANCE - 2.3%
French Government OAT 5.5% Aaa EUR 1,800,000 2,265,539
4/25/04
GOVERNMENT OBLIGATIONS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (C) VALUE (NOTE 1)
GERMANY - 4.1%
German Federal Republic Aaa EUR 625,000 $ 859,062
7.375% 1/3/05
Treuhandanstalt 6.625% 7/9/03 Aaa EUR 2,377,507 3,075,035
3,934,097
ITALY - 1.6%
Italian Republic 10.5% 9/1/05 Aa3 EUR 361,519 575,304
Italian Republic 6.75% 2/1/07 Aa3 EUR 700,000 956,106
1,531,410
SPAIN - 1.2%
Spanish Kingdom 4.5% 7/30/04 Aa2 EUR 1,000,000 1,177,526
SWEDEN - 0.8%
Swedish Kingdom 10.25% 5/5/03 Aa1 SEK 5,000,000 810,731
UNITED KINGDOM - 2.0%
United Kingdom, Great Britain Aaa GBP 900,000 1,899,022
& Northern Ireland 9.5%
4/18/05
UNITED STATES OF AMERICA -
18.8%
Fannie Mae 5.43% 1/27/00 Aaa 1,950,000 1,958,229
Federal Home Loan Bank:
5.53% 2/3/00 Aaa 1,625,000 1,633,385
5.67% 1/14/00 Aaa 2,985,000 3,003,656
U.S. Treasury Bills, yield at - 500,000 496,003
date of purchase 4.29%
4/8/99 (e)
U.S. Treasury Bond:
stripped principal 0% 8/15/20 Aaa 5,010,000 1,536,066
7.125% 2/15/23 Aaa 1,350,000 1,672,529
8.125% 8/15/19 Aaa 1,300,000 1,744,236
12.75% 11/15/10 (callable) (e) Aaa 880,000 1,272,973
13.875% 5/15/11 (callable) Aaa 980,000 1,510,582
U.S. Treasury Notes:
6.5% 10/15/06 Aaa 1,900,000 2,108,696
7% 7/15/06 Aaa 425,000 483,969
7.875% 8/15/01 Aaa 640,000 688,902
18,109,226
TOTAL GOVERNMENT OBLIGATIONS 29,727,551
(Cost $28,930,136)
CASH EQUIVALENTS - 10.0%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (b) 9,626,324 $ 9,626,324
(Cost $9,626,324)
TOTAL INVESTMENT IN $ 96,424,932
SECURITIES - 100%
(Cost $83,686,929)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/(LOSS)
PURCHASED
21 CAC 40 Index Contracts Apr 1999 $ 981,864 $ 55,959
(France)
7 DAX 30 Index Contracts Mar 1999 1,002,176 51,142
(Germany)
3 Russell 2000 Index Contracts Mar 1999 613,068 27,432
3 S&P 400 Midcap Index Mar 1999 544,293 22,707
Contracts
3,141,401 157,240
THE FACE VALUE OF FUTURES
PURCHASED AS A PERCENTAGE OF
TOTAL INVESTMENT IN
SECURITIES - 3.3%.
</TABLE>
SECURITY TYPE ABBREVIATIONS
PEPS - Participating Equity
Preferred Shares/Premium
Exchangeable Participating
Shares
STRYPES - Structured Yield Product
Exchangeable for Common Stock
CURRENCY ABBREVIATIONS
EUR - European Monetary Unit
GBP - British pound
SEK - Swedish krona
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Principal amount is stated in United States dollars unless
otherwise noted.
(d) 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 $370,277 or 0.4% of net assets.
(e) Security or 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 $343,057.
(f) For foreign government obligations not individually rated by S&P
or Moody's, the ratings listed have been assigned 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 investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 30.5% AAA, AA, A 30.5%
Baa 0.0% BBB 0.0%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings
for the sovereign credit of the issuing government.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
Basic Industries 1.2%
Cash Equivalents 10.0
Durables 2.7
Energy 2.6
Finance 11.5
Government Obligations 30.8
Health 6.4
Industrial Machinery & 2.8
Equipment
Media & Leisure 1.8
Nondurables 4.3
Retail & Wholesale 4.4
Services 1.3
Technology 9.1
Utilities 9.5
Others (Individually less 1.6
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 1999, the aggregate cost of investment securities for
income tax purposes was $83,721,952. Net unrealized appreciation
aggregated $12,702,980, of which $14,811,486 related to appreciated
investment securities and $2,108,506 related to depreciated investment
securities.
At July 31, 1998, the fund had a capital loss carryforward of
approximately $6,552,000 which will expire on July 31, 2004.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 96,424,932
value (cost $83,686,929) -
See accompanying schedule
Foreign currency held at 4,081
value (cost $3,682)
Receivable for investments 1,779,461
sold
Receivable for fund shares 576,527
sold
Dividends receivable 62,781
Interest receivable 626,260
Receivable for daily 16,619
variation on futures
contracts
TOTAL ASSETS 99,490,661
LIABILITIES
Payable to custodian bank $ 16,478
Payable for investments 1,489,886
purchased
Payable for fund shares 228,748
redeemed
Accrued management fee 58,902
Other payables and accrued 131,490
expenses
TOTAL LIABILITIES 1,925,504
NET ASSETS $ 97,565,157
Net Assets consist of:
Paid in capital $ 90,819,850
Distributions in excess of (104,662)
net investment income
Accumulated undistributed net (6,039,909)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 12,889,878
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 5,656,892 $ 97,565,157
shares outstanding
NET ASSET VALUE, offering $17.25
price and redemption price
per share ($97,565,157
(divided by) 5,656,892
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED
JANUARY 31,
1999 (UNAUDITED)
INVESTMENT INCOME $ 282,204
Dividends
Interest 1,049,845
1,332,049
Less foreign taxes withheld (15,589)
TOTAL INCOME 1,316,460
EXPENSES
Management fee $ 334,165
Transfer agent fees 121,011
Accounting fees and expenses 33,172
Non-interested trustees' 998
compensation
Custodian fees and expenses 49,857
Registration fees 20,695
Audit 31,020
Legal 150
Miscellaneous 1,684
Total expenses before 592,752
reductions
Expense reductions (3,959) 588,793
NET INVESTMENT INCOME 727,667
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 116,799
Foreign currency transactions (49,357)
Futures contracts 575,697 643,139
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 3,519,350
Assets and liabilities in 1,711
foreign currencies
Futures contracts 100,473 3,621,534
NET GAIN (LOSS) 4,264,673
NET INCREASE (DECREASE) IN $ 4,992,340
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1998
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 727,667 $ 1,467,414
income
Net realized gain (loss) 643,139 6,633,711
Change in net unrealized 3,621,534 (725,159)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 4,992,340 7,375,966
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,574,612) (1,895,825)
from net investment income
Share transactions Net 24,733,367 66,298,210
proceeds from sales of shares
Reinvestment of distributions 1,484,276 1,827,302
Cost of shares redeemed (27,030,727) (53,263,687)
NET INCREASE (DECREASE) IN (813,084) 14,861,825
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 2,604,644 20,341,966
IN NET ASSETS
NET ASSETS
Beginning of period 94,960,513 74,618,547
End of period (including $ 97,565,157 $ 94,960,513
under (over) distribution
of net investment income of
$(104,662) and $742,283,
respectively)
OTHER INFORMATION
Shares
Sold 1,534,051 4,236,702
Issued in reinvestment of 95,920 124,912
distributions
Redeemed (1,688,350) (3,475,772)
Net increase (decrease) (58,379) 885,842
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED
JANUARY 31, YEARS ENDED JULY 31,
1999
(UNAUDITED) 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.62 $ 15.45 $ 12.91 $ 12.40 $ 11.99 $ 11.98
period
Income from Investment
Operations
Net investment income .13 D .30 D .31 D .31 .28 .32 D
Net realized and .78 1.27 2.68 .25 .13 .25
unrealized gain (loss)
Total from investment .91 1.57 2.99 .56 .41 .57
operations
Less Distributions
From net investment income (.28) (.40) (.45) (.05) - (.15)
From net realized gain - - - - - (.11)
In excess of net realized - - - - - (.20)
gain
Return of capital - - - - - (.10)
Total distributions (.28) (.40) (.45) (.05) - (.56)
Net asset value, end of $ 17.25 $ 16.62 $ 15.45 $ 12.91 $ 12.40 $ 11.99
period
TOTAL RETURN B, C 5.68% 10.53% 23.93% 4.52% 3.42% 4.58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,565 $ 94,961 $ 74,619 $ 87,785 $ 148,831 $ 313,246
(000 omitted)
Ratio of expenses to average 1.32% A 1.39% 1.51% 1.39% 1.34% 1.68%
net assets
Ratio of expenses to average 1.31% A, E 1.37% E 1.49% E 1.36% E 1.33% E 1.67% E
net assets after expense
reductions
Ratio of net investment 1.62% A 1.95% 2.28% 2.94% 4.68% 2.56%
income to average net assets
Portfolio turnover rate 103% A 81% 57% 189% 242% 226%
</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 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1999 (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, 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 require management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Debt securities for which quotations are
readily available are valued by a pricing service at their market
values as determined by their most recent bid prices in the principal
market (sales prices if the principal market is an exchange) in which
such securities are normally traded. Securities (including restricted
securities) for which market quotations are not readily available are
valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at 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 foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. 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
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The fund
may be subject to foreign taxes on income and gains on investments
which are accrued based upon the fund's understanding of the tax rules
and regulations that exist in the markets in which it invests. The
fund accrues such taxes as applicable.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES - CONTINUED
The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among 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 transactions, foreign currency transactions,
passive foreign investment companies (PFIC), non-taxable dividends,
capital loss carryforwards, and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
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
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
in one or more repurchase agreements for U.S. Treasury or Federal
Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. Buying futures tends to increase the
fund's exposure to the underlying instrument, while selling futures
tends 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 caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in
the value of the underlying instruments or if the counterparties do
not perform under the contracts' terms. Gains (losses) are realized
upon the expiration or closing of the futures contracts. Futures
contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
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 $41,929,527 and $41,082,501, respectively, of which U.S.
government and government agency obligations aggregated $1,984,435 and
$0, respectively.
The market value of futures contracts opened and closed during the
period amounted to $12,275,752 and $11,899,281, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .45%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .74% 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 Investments Japan Limited
(FIJ). In addition, FIIA entered into a sub-advisory agreement with
its subsidiary, Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L). 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 FIIA(U.K.)L a fee based on costs incurred for either
service.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (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 .27% 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 $2,194 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 $3,720 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $96 and $143, respectively, under these arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
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(COMPUTER_GRAPHIC)
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at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
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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
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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
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INVESTMENT ADVISER
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INVESTMENT SUB-ADVISERS
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OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard R. Mace, Jr., Vice President
Richard A. Spillane, Jr., Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
GBL-SANN-0399 72370
1.700152.101
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FIDELITY
LOW-PRICED STOCK
FUND
SEMIANNUAL REPORT
JANUARY 31, 1999
(fidelity_logo_graphic)(registered trademark)
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 44 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 48 Notes to the financial
statements.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
After the first month of 1999, U.S. stock markets seem to have
maintained their momentum from 1998, as the S&P 500, the Dow and
NASDAQ all reached record highs in January. The technology sector, and
Internet stocks in particular, were the main contributors. In the bond
markets, domestic securities continued to trade at historically low
yields, while positive economic news helped credit-sensitive sectors
outperform Treasury bonds.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LOW-PRICED STOCK -3.33% -0.52% 99.13% 369.37%
FIDELITY LOW-PRICED STOCK -6.23% -3.50% 93.16% 355.29%
(INCL. 3.00% SALES CHARGE)
Russell 2000 (registered 2.40% 0.33% 72.12% 198.06%
trademark)
Small Cap Funds Average 1.30% 1.76% 81.32% n/a
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on December 27, 1989. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, 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
market capitalization-weighted index of 2,000 small company stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the small cap funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 713 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY LOW-PRICED STOCK -0.52% 14.77% 18.52%
FIDELITY LOW-PRICED STOCK -3.50% 14.07% 18.12%
(INCL. 3.00% SALES CHARGE)
Russell 2000 0.33% 11.47% 12.75%
Small Cap Funds Average 1.76% 12.37% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's 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 an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
Low-Priced Stock Russell 2000
00316 RS002
1989/12/27 9700.00 10000.00
1989/12/31 9593.30 10142.97
1990/01/31 9535.10 9256.82
1990/02/28 9719.40 9544.23
1990/03/31 9816.40 9915.46
1990/04/30 9447.80 9591.71
1990/05/31 10194.70 10270.61
1990/06/30 10476.00 10291.43
1990/07/31 10417.80 9838.77
1990/08/31 9379.90 8528.44
1990/09/30 8968.27 7773.76
1990/10/31 8816.43 7299.19
1990/11/30 9292.18 7855.75
1990/12/31 9585.72 8167.44
1991/01/31 10466.35 8906.05
1991/02/28 11397.59 9899.21
1991/03/31 12156.76 10596.00
1991/04/30 12622.38 10569.34
1991/05/31 12814.70 11073.13
1991/06/30 12045.42 10427.83
1991/07/31 12784.34 10793.76
1991/08/31 13138.61 11193.28
1991/09/30 13192.71 11280.93
1991/10/31 13653.40 11579.29
1991/11/30 13098.47 11043.73
1991/12/31 14019.94 11928.06
1992/01/31 15233.92 12894.55
1992/02/29 16211.56 13270.70
1992/03/31 15674.40 12821.51
1992/04/30 15824.80 12372.32
1992/05/31 15932.23 12536.84
1992/06/30 15545.48 11943.94
1992/07/31 16050.41 12359.54
1992/08/31 16007.44 12010.77
1992/09/30 16137.72 12287.78
1992/10/31 16406.50 12678.35
1992/11/30 17515.20 13648.50
1992/12/31 18079.01 14123.98
1993/01/31 18543.44 14602.03
1993/02/28 18384.85 14264.77
1993/03/31 18939.91 14727.65
1993/04/30 18758.67 14323.38
1993/05/31 19155.14 14957.18
1993/06/30 19223.10 15050.49
1993/07/31 19472.31 15258.29
1993/08/31 20163.30 15917.47
1993/09/30 20327.14 16366.66
1993/10/31 21075.97 16787.91
1993/11/30 20713.64 16235.37
1993/12/31 21733.10 16790.47
1994/01/31 22863.72 17316.90
1994/02/28 22851.16 17254.27
1994/03/31 21846.16 16343.28
1994/04/30 22034.60 16440.43
1994/05/31 21959.22 16255.82
1994/06/30 21645.16 15703.83
1994/07/31 22135.10 15961.84
1994/08/31 22964.22 16851.27
1994/09/30 23073.27 16794.85
1994/10/31 23252.45 16728.57
1994/11/30 22632.20 16052.95
1994/12/31 22778.19 16484.25
1995/01/31 22763.95 16276.27
1995/02/28 23418.83 16953.35
1995/03/31 23575.43 17245.32
1995/04/30 24344.19 17628.78
1995/05/31 24842.46 17931.89
1995/06/30 25796.30 18862.12
1995/07/31 27405.01 19948.62
1995/08/31 27661.27 20361.30
1995/09/30 28155.35 20724.91
1995/10/31 27354.31 19798.05
1995/11/30 28066.35 20629.85
1995/12/31 28448.62 21174.16
1996/01/31 28756.17 21151.47
1996/02/29 29678.83 21810.65
1996/03/31 30170.91 22254.62
1996/04/30 31431.88 23444.61
1996/05/31 32385.29 24368.50
1996/06/30 31770.18 23367.84
1996/07/31 30555.35 21326.81
1996/08/31 31724.05 22565.05
1996/09/30 32717.98 23446.88
1996/10/31 33317.40 23085.51
1996/11/30 35082.34 24036.74
1996/12/31 36098.62 24666.68
1997/01/31 36504.41 25159.64
1997/02/28 36927.11 24549.60
1997/03/31 36250.79 23391.20
1997/04/30 36200.07 23456.40
1997/05/31 38922.26 26065.92
1997/06/30 40494.70 27182.99
1997/07/31 42608.21 28447.87
1997/08/31 42963.28 29098.79
1997/09/30 45766.34 31228.66
1997/10/31 45019.86 29856.82
1997/11/30 45233.14 29663.71
1997/12/31 45748.92 30182.91
1998/01/31 45767.12 29706.57
1998/02/28 48279.40 31903.16
1998/03/31 50063.48 33218.93
1998/04/30 50773.47 33402.75
1998/05/31 49608.36 31603.78
1998/06/30 49371.69 31670.26
1998/07/31 47096.08 29106.43
1998/08/31 39686.69 23454.55
1998/09/30 41093.86 25290.05
1998/10/31 42727.25 26321.47
1998/11/30 44480.17 27700.52
1998/12/31 45991.83 29414.67
1999/01/29 45528.89 29805.56
IMATRL PRASUN SHR__CHT 19990131 19990212 142747 R00000000000113
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Low-Priced Stock Fund on December 27, 1989, when
the fund started, and the current 3.00% sales charge was paid. As the
chart shows, by January 31, 1999, the value of the investment would
have grown to $45,529 - a 355.29% increase on the initial investment.
For comparison, look at how the Russell 2000 Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $29,806 - a 198.06% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
The first month of 1999 proved to
be a continuation of 1998's strong
U.S. stock market performance.
For the six-month period ending
January 31, 1999, the Standard
and Poor's 500 Index - a popular
performance measure of U.S. stock
markets - returned 15.02%. In
the early stages of the six-month
period, U.S. equity markets were
staggering toward a deep abyss,
one they would fall into on the news
of Russia's currency devaluation
and loan defaults. Faced with
global economic chaos, investors
began fleeing the equity markets
in droves, searching for safer, less
volatile havens - particularly U.S.
Treasuries. To address the lack of
confidence in domestic and global
equity markets, the U.S. Federal
Reserve Board intervened with three
separate 0.25% interest-rate cuts in
the late fall. Those cuts, combined
with skyrocketing Internet and
technology advances, helped stocks
to quickly ascend to - and even
surpass - their former lofty levels.
At the end of 1998, the S&P 500(registered trademark)
recorded its unprecedented
fourth-straight year of returns
exceeding 20%. Despite some
instances of profit-taking in
technology issues and concerns
over Brazil's currency devaluation
in the first month of 1999, the
S&P 500 index, Dow Jones
Industrial Average and NASDAQ
all reached record highs in
January.
(photograph of Joel Tillinghast)
An interview with Joel Tillinghast, Portfolio Manager of Fidelity
Low-Priced Stock Fund
Q. HOW DID THE FUND PERFORM, JOEL?
A. For the six months that ended January 31, 1999, the fund returned
- -3.33%. The Russell 2000 Index returned 2.40% during that time, while
the small cap funds average, as tracked by Lipper Inc., returned
1.30%. For the 12 months that ended January 31, 1999, the fund
returned -0.52%, while the Russell 2000 and Lipper group returned
0.33% and 1.76%, respectively.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. The market has been extremely divided over the past year. Large-cap
stocks in general surged, as did technology stocks, particularly those
that were Internet-related. Most other stocks, meanwhile, languished,
with more than half of the publicly traded stocks losing value over
the last six months and year. Since the fund invests primarily in
smaller companies, these trends obviously hampered performance.
Looking further, we also saw some narrowness within the small-cap
universe, as technology companies - and again those involved in the
Internet - accounted for most of the group's gains. The fund had
minimal holdings in Internet companies, and was underweighted in
technology stocks relative to the Russell 2000. These factors combined
to detract from performance.
Q. WHY DID YOU CHOOSE TO UNDERWEIGHT TECHNOLOGY STOCKS?
A. Several factors, especially high valuations, kept me away. Most of
the companies within the fund's portfolio are currently profitable,
but most Internet companies were losing money during the period. On
average, the stocks in the fund have low price-to-earnings ratios, but
many technology stocks trade at high ratios. When the fund does pay up
for a faster-growing company, it's usually because the company has a
business model with recurring revenue and a leading market position
within its industry. A good example is Kronos, a leader in electronic
time and attendance systems. By contrast, the Internet and many other
areas of technology are changing so rapidly that they haven't shown
that their business models will work, and it isn't clear who will
emerge as leaders in their categories. Also, the Internet is likely to
be used by almost all businesses, so I felt it was better to
participate through companies with existing distribution ability and
brands. Intimate Brands, for example, which owns women's apparel
company Victoria's Secret, extended its sales reach to the Internet
during the period.
Q. CAN YOU POINT TO ANY AREAS OF THE MARKET WHERE YOU DID FIND
OPPORTUNITIES?
A. Domestic consumer sectors were attractive, with strong consumer
spending and moderate stock valuations. I added to the fund's
positions in several homebuilding companies, most notably Clayton
Homes and Oakwood Homes. Retail-related investments such as AutoZone
and BJ's Wholesale Club also performed well. Other consumer companies
that did well included Fossil, a watch designer, and Kenneth Cole, a
shoe company. Media companies, especially cable TV companies, also
turned in generally positive results. Strong subscriber growth and
solid revenues - combined with the promising fusion of cable TV and
the Internet - helped steer Texas-based TCA Cable and Canadian-based
Cogeco and Moffat to solid gains.
Q. FINANCE STOCKS ACCOUNTED FOR JUST OVER 16% OF THE FUND'S TOTAL
INVESTMENTS AT THE END OF THE PERIOD. CAN YOU GIVE US A REPORT CARD ON
THESE STOCKS?
A. I'd have to give them a below-average grade. Banks and other
lending institutions went through a difficult performance stretch, due
mainly to increased concerns about credit quality and derivatives.
Some names that detracted from the fund's performance during the
period included insurer MMI Companies and Sweden-based Nordbanken.
Another factor that may have hurt finance stocks was that the level of
merger and acquisition activity within the sector tailed off some
during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I'll continue to look for companies that I feel can offer steady
earnings growth in a flat-profit environment. In the short term, stock
prices don't always move with earnings. Since small company stock
prices have not risen as much as earnings, I think they are overdue to
catch up - particularly since large company stock prices have risen
faster than their earnings for four consecutive years.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
(checkmark)FUND FACTS
GOAL: capital appreciation by
investing mainly in low-priced
common stocks ($35 or less
at time of purchase)
FUND NUMBER: 316
TRADING SYMBOL: FLPSX
START DATE: December 27,
1989
SIZE: as of January 31,
1999, more than $8.6
billion
MANAGER: Joel Tillinghast,
since 1989; analyst for
natural gas, personal care
products, appliance and
tobacco industries,
1986-1989; joined Fidelity
in 1986
JOEL TILLINGHAST TALKS ABOUT
MAINTAINING HIS INVESTMENT
DISCIPLINE THROUGH BUMPY
SMALL-CAP MARKETS:
"One of the biggest challenges I face
when small-cap stocks are
struggling is to resist the
temptation to chase whatever
stocks have gone up. During the
period, for example, Internet
stocks rose dramatically in value
despite the fact that many of them
have never earned a profit. Also,
while every stock has some degree
of future uncertainty, the future
for Internet stocks, in my view, is
impossible to forecast. Thus, I was
faced with a decision. I could
change my stripes and invest in
stocks that had appreciated in value
for reasons unclear to me, or I could
stick with names that I did know,
even though they weren't rising in
value. My experience has taught
me that the latter philosophy
usually works out best in the long
run.
"Instead of jumping on the Internet
bandwagon, I chose to focus on
companies that I felt could steadily
grow their earnings through difficult
market phases. Until small-caps
bounce back, this seemed to be a
logical approach. What will it take
for small-caps to rebound?
Credit-wary investors are currently
attracted to big stocks because of
their favorable liquidity
characteristics. If banks show a
willingness to lend to smaller, riskier
credits, that would benefit
small-cap companies."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF JANUARY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Gallaher Group PLC sponsored 1.5 1.2
ADR
USEC, Inc. 1.5 1.1
Hyder PLC 1.2 1.1
AutoZone, Inc. 1.1 0.6
King World Productions, Inc. 1.1 1.0
Biomet, Inc. 1.0 0.8
Reynolds & Reynolds Co. Class A 1.0 0.7
BJ's Wholesale Club, Inc. 0.9 0.5
First BanCorp P R 0.9 0.8
Viad Corp. 0.9 0.8
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 16.3 16.9
TECHNOLOGY 11.9 10.3
HEALTH 8.0 6.4
RETAIL & WHOLESALE 7.9 6.5
MEDIA & LEISURE 7.3 5.8
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF JANUARY 31, 1999 *
Stocks 94.2%
Short-term
investments 5.8%
*FOREIGN
INVESTMENTS 22.8%
Row: 1, Col: 1, Value: 94.2
Row: 1, Col: 2, Value: 5.8
AS OF JULY 31, 1998 **
Stocks 89.2%
Short-term
investments 10.8%
**FOREIGN
INVESTMENTS 25.6%
Row: 1, Col: 1, Value: 89.2
Row: 1, Col: 2, Value: 10.8
INVESTMENTS JANUARY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 94.2%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.4%
AEROSPACE & DEFENSE - 0.1%
Allied Research Corp. (a)(d) 473,000 $ 3,370
Primex Technologies, Inc. 137,400 6,114
9,484
DEFENSE ELECTRONICS - 0.3%
Ducommun, Inc. (a)(d) 1,095,500 15,611
Flir Systems, Inc. (a) 300,000 6,563
22,174
SHIP BUILDING & REPAIR - 0.0%
Vosper Thornycroft Holdings 50,000 594
PLC
TOTAL AEROSPACE & DEFENSE 32,252
BASIC INDUSTRIES - 4.8%
CHEMICALS & PLASTICS - 2.9%
Aronkasei Co. Ltd. 650,000 1,457
CFC International, Inc. (a) 118,500 1,274
Cytec Industries, Inc. (a) 545,000 12,092
European Colour PLC 1,000,000 946
Foamex International, Inc. 152,500 1,773
International Specialty 1,640,000 16,503
Products, Inc. (a)
Ivex Packaging Corp. (a) 15,000 331
Low & Bonar PLC 100,000 321
McKechnie PLC 200,000 1,287
Nihon Kagaku Sangyo Co. Ltd. 200,000 472
Nippon Chemical Industrial 300,000 866
Co. Ltd.
Octel Corp. (a)(d) 1,472,000 19,596
OM Group, Inc. 215,000 6,773
Quixote Corp. (d) 576,700 6,920
Solutia, Inc. 1,460,000 27,923
Spartech Corp. 953,000 22,753
Tokyo Printing Ink 375,000 709
Manufacturing Co. Ltd.
USEC, Inc. (d) 8,645,000 125,353
Wardle Storeys PLC 250,000 1,473
248,822
IRON & STEEL - 0.3%
Beltecno Corp. (a) 100,000 219
Bunka Shutter Co. Ltd. 150,000 366
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - CONTINUED
Chubu Steel Plate Co. Ltd. (a) 1,000,000 $ 1,374
Cold Metal Products, Inc. 353,200 1,104
(a)(d)
Fansteel, Inc. (a)(d) 800,000 4,600
Harris Steel Group, Inc. 200,000 1,886
Class A
Hawk Corp. Class A (a) 119,500 963
Japan Steel Tower Co. Ltd. 500,000 898
Nittetsu Steel Drum Co. Ltd. 100,000 266
Richardsons Westgarth PLC (d) 3,632,300 2,032
Roanoke Electric Steel Corp. 370,500 5,604
Samuel Manu-Tech, Inc. 350,000 1,992
Takigami Steel Construction 300,000 886
Co. Ltd.
22,190
METALS & MINING - 0.8%
Acier Leroux, Inc.:
Class B (sub-vtg.) (a) 125,000 430
Class B (a) 200,000 688
AFC Cable Systems, Inc. (a)(d) 879,000 30,985
Brush Wellman, Inc. 32,300 485
Cable Design Technology Corp. 810,000 15,491
(a)
Chase Industries, Inc. (a)(d) 796,400 8,462
Draka Holding NV 25,000 630
Fimalac SA (Finance Marc de 50,000 5,680
Lacharriere)
Johnson Matthey PLC 300,000 2,073
Major Drilling Group 75,000 261
International, Inc. (a)
Metaleurop SA warrants 2/4/00 315,190 90
(a)
Nagahori Corp. 200,000 344
PK Cables OY 100,000 2,523
Special Metals Corp. (a) 481,500 2,949
Toami Corp. (d) 350,000 1,684
72,775
PACKAGING & CONTAINERS - 0.3%
Boxmore International PLC 440,000 1,122
Owens-Illinois, Inc. (a) 550,000 16,088
Silgan Holdings, Inc. (a) 350,600 8,195
Tupperware Corp. 25,000 514
25,919
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.5%
ABT Building Products Corp. 472,000 $ 6,992
(a)
Clondalkin Group Ltd. unit 1,000,000 6,134
CVG (Crown Van Gelder) 300,000 4,754
Mercer International, Inc. 227,200 1,619
(SBI)
Metsa-Serla Ltd. Class B Free 3,000,000 20,720
Shares
Rolland, Inc. 325,000 1,323
Uehara Sei Shoji Co. Ltd. 1,000,000 2,388
43,930
TOTAL BASIC INDUSTRIES 413,636
CONSTRUCTION & REAL ESTATE -
6.4%
BUILDING MATERIALS - 1.0%
American Precision 60,000 566
Industries, Inc. (a)
American Woodmark Corp. 184,000 6,969
Asahi Concrete Works Co. Ltd. 900,000 2,474
(d)
Barnett, Inc. (a) 472,500 6,261
Baynes (Charles) PLC 1,000,000 971
Brampton Brick Ltd. Class A 375,000 918
(a)
Devcon International Corp. (a) 217,700 558
Domco, Inc. 725,000 4,798
Drew Industries, Inc. (a)(d) 1,137,500 14,361
Engineered Support Systems, 305,750 4,873
Inc. (d)
Florida Rock Industries, Inc. 54,200 1,568
Giant Cement Holding, Inc. 587,100 10,568
(a)(d)
Heywood Williams Group PLC 350,000 1,238
Hibiya Engineering Ltd. 1,500,000 5,540
Kaynar Technologies, Inc. (a) 197,200 5,300
Komai Tekko, Inc. 125,000 241
Kondotec, Inc. 275,000 1,328
Kyushu Fujisash Co. Ltd. 100,000 181
Matsuo Bridge Co. Ltd. 500,000 902
Nichiha Corp. 300,000 2,912
Patrick Industries, Inc. (d) 593,000 8,747
Polynorm NV 19,950 1,388
Polypipe PLC 2,200,000 4,598
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
BUILDING MATERIALS - CONTINUED
Raytech Corp. (a)(d) 328,800 $ 986
Westburne, Inc. 100,000 930
89,176
CONSTRUCTION - 4.4%
Amec PLC 2,000,000 5,381
American Buildings Co. (a) 131,700 3,144
American Homestar Corp. (a) 405,200 5,268
Aoki Marine Co. Ltd. 200,000 326
Barratt Developments PLC 600,000 2,068
Beazer Homes USA, Inc. (a)(d) 427,900 11,553
Bovis Homes Group PLC 400,000 1,376
Bryant Group PLC 200,000 309
Cavalier Homes, Inc. 508,300 5,083
Clayton Homes, Inc. 4,423,358 60,821
Crossman Communities, Inc. 1,147,600 30,698
(a)(d)
D.R. Horton, Inc. 700,000 14,788
Dominion Homes, Inc. (a)(d) 532,500 5,858
Engle Homes, Inc. (d) 998,000 13,785
Fortress Group, Inc. 173,700 380
Henry Boot & Sons PLC 200,000 586
Jacobs Engineering Group, 1,100,000 46,131
Inc. (a)
Kaneshita Construction Co. 400,000 1,931
Ltd.
M/I Schottenstein Homes, Inc. 880,000 17,710
(d)
Matsui Construction Co. Ltd. 400,000 962
Meritage Corp. (a) 260,000 3,851
Monaco Coach Corp. (a) 500,000 14,500
NCI Building Systems, Inc. (a) 187,500 5,016
Oakwood Homes Corp. (d) 3,177,000 60,959
Oriole Homes Corp. Class B 276,800 588
(a)(d)
Persimmon PLC 200,000 599
Redrow Group PLC Class L 1,100,000 3,204
Robertson Ceco Corp. (a)(d) 1,017,600 8,204
Southern Energy Homes, Inc. 1,426,000 9,091
(a)(d)
Swan Hill Group PLC 2,100,000 1,348
Takada Kiko Co. Ltd. 700,000 2,646
Tay Homes PLC (d) 2,900,000 5,893
Technip SA (a)(e) 50,000 4,430
U.S. Home Corp. (a) 615,045 21,834
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
CONSTRUCTION - CONTINUED
Willbros Group, Inc. (a) 323,800 $ 1,599
Wimpey George PLC 1,000,000 1,670
Writer Corp. (a) 82,000 154
Yokogawa Bridge Corp. 1,000,000 2,800
Yokogawa Construction Co. 250,000 754
Ltd.
377,298
ENGINEERING - 0.6%
Ataka Construction & 50,000 198
Engineering Co. Ltd.
Dai-Dan Co. Ltd. 300,000 2,043
Hoan Kogyo Co. Ltd. 500,000 1,203
Japan Engineering Consultants 300,000 644
Kawasaki Setsubi Kogyo Co. 200,000 584
Ltd.
Metalrax Group PLC Class L 2,000,000 2,814
MYR Group, Inc. (d) 500,000 5,750
NFO Worldwide, Inc. (a) 250,000 3,047
Ohba Co. Ltd. 125,000 458
Sanshin Corp. 250,000 462
Sanyo Engineering & 800,000 2,756
Construction, Inc.
Stantec, Inc. (a) 275,000 1,984
Taihei Dengyo Kaisha Ltd. 200,000 670
URS Corp. (a)(d) 1,244,000 27,135
49,748
REAL ESTATE - 0.1%
Chuo Warehouse Co. Ltd. 200,000 945
Echelon International Corp. 46,000 995
(a)
FRM Nexus, Inc. (a)(d) 156,649 294
Kennedy-Wilson, Inc. (a)(d) 390,000 4,071
Meiwa Estate Co. Ltd. 50,000 902
Nagawa Co. Ltd. (d) 850,000 2,774
9,981
REAL ESTATE INVESTMENT TRUSTS
- - 0.3%
AMRESCO Capital Trust, Inc. 525,000 5,053
(d)
Banyan Strategic Realty Trust 919,250 4,366
(SBI) (d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- - CONTINUED
Meditrust Corp. unit 250,000 $ 3,922
Redwood Trust, Inc. (d) 1,021,719 15,198
28,539
TOTAL CONSTRUCTION & REAL 554,742
ESTATE
DURABLES - 7.2%
AUTOS, TIRES, & ACCESSORIES -
3.3%
Autocam Corp. (d) 469,902 6,579
AutoZone, Inc. (a) 2,850,000 96,544
Cook (D.C.) Holdings PLC (d) 2,300,000 833
Dagenham Motors Group PLC 250,000 646
Class L
Dixon Motors PLC 200,000 329
Durakon Industries, Inc. 651,800 8,310
(a)(d)
European Motor Holdings PLC 200,000 216
FCC Co. Ltd. 50,000 558
Federal Screw Works (d) 108,800 5,603
Fuji Heavy Industries Ltd. 100,000 562
Hahn Automotive Warehouse, 150,000 309
Inc. (a)
Keiiyu Co. Ltd. 150,000 722
Koito Industries Ltd. 1,044,000 3,273
Kwik-Fit Holdings PLC Class L 250,000 1,691
Mercury Air Group, Inc. (a)(d) 651,240 5,129
Meritor Automotive, Inc. 1,135,000 19,792
Monro Muffler Brake, Inc. (d) 600,000 4,800
Murakami Corp. (d) 700,000 2,297
Nissin Shoji Co. Ltd. 200,000 893
Owari Precise Products Co. 173,000 334
Ltd.
Peugeot SA 122,000 20,732
Piolax, Inc. 525,000 3,608
Quicks Group PLC (d) 3,800,000 5,628
Rocla OYJ 50,000 341
Sanderson Bramal Motor Group 550,000 1,358
PLC
Strattec Security Corp. (a)(d) 450,600 14,476
Superior Industries 85,000 2,332
International, Inc.
Sylea SA 18,000 1,022
Tachi-S Co. Ltd. 750,000 2,828
TBC Corp. (a)(d) 1,792,200 11,873
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Tochigi Fuji Industrial Co. 600,000 $ 1,227
Ltd.
Transpro, Inc. (d) 660,925 4,131
Travel Ports of America 201,011 704
Uni-Select, Inc. (d) 650,000 14,624
World Fuel Services Corp. (d) 1,249,906 14,061
Wynn's International, Inc. (d) 1,774,000 33,373
291,738
CONSUMER DURABLES - 0.5%
Asko OY Class A 800,000 11,905
Beijer (G&L) AG Series B 125,000 1,874
Libbey, Inc. 760,000 19,048
Mikasa, Inc. 442,100 5,029
Portmeirion Potteries 125,000 267
Holdings PLC
Sankyo Co. Ltd. (Gunma) 100,000 1,675
39,798
CONSUMER ELECTRONICS - 0.8%
Boston Acoustics, Inc. 31,000 729
Fantom Technologies, Inc. 120,000 1,429
Fossil, Inc. (a)(d) 1,475,000 43,743
Haw Par Brothers 500,000 591
International Ltd.
Koss Corp. (a)(d) 210,000 2,389
Movado Group, Inc. (d) 782,512 19,905
Tulikivi OY Series A 35,000 716
69,502
HOME FURNISHINGS - 1.1%
Airsprung Furniture Group PLC 975,000 1,444
Beter Bed Holding NV 131,666 4,652
BMTC Group, Inc. Class A 400,000 5,691
(sub-vtg.) (d)
Bush Industries, Inc. Class 999,800 12,747
A. (d)
Chromcraft Revington, Inc. 559,800 9,027
(a)(d)
Dorel Industries, Inc.:
Class A (multi-vtg.) (a)(e) 200,000 3,097
Class B (a) 600,000 9,271
Ladd Furniture, Inc. 309,100 7,032
Martela OY Class A 15,000 392
Meadowcraft, Inc. (a) 218,900 2,353
Nakayamafuku Co. Ltd. 54,800 144
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
HOME FURNISHINGS - CONTINUED
Nippon Filing Co. Ltd. 100,000 $ 381
Rosebys PLC 500,000 617
Samas Groep NV 100,000 1,340
Shelby Williams Industries, 428,900 5,683
Inc.
Silentnight Holdings PLC 150,000 444
Stanley Furniture Co., Inc. 645,400 14,199
(a)(d)
Tosco Co. Ltd. 452,000 1,378
Winsloew Furniture, Inc. 574,200 16,293
(a)(d)
96,185
TEXTILES & APPAREL - 1.5%
Berisford (S.W.) PLC 1,450,000 4,092
Chemfab Corp. (a) 79,100 1,355
Concord Fabrics, Inc.:
Class A (a)(d) 169,600 1,049
Class B (a)(d) 122,700 736
Conso Products Co. (a)(d) 748,050 5,984
Decorator Industries, Inc. (d) 377,915 3,000
Dewhirst (IJ) Group PLC 5,264,000 5,890
Dyersburg Corp. (d) 700,100 2,100
Fila Holding Spa sponsored ADR 379,500 3,748
Fruit of the Loom, Inc. Class 200,000 2,900
A (a)
Galey & Lord, Inc. (a) 50,000 275
Hampshire Group Ltd. (a)(d) 335,800 3,820
Happy Kids, Inc. 200,000 2,450
Impact 21 Co. Ltd. 50,000 502
Interface, Inc. Class A 75,000 773
Jeans Mate Corp. 25,000 483
JLM Couture, Inc. (a)(d) 181,500 499
Lassila & Tikahoja OY 150,000 3,493
Nautica Enterprises, Inc. 3,600,000 56,700
(a)(d)
Novel Denim Holdings Ltd. (a) 200,000 4,075
PCA Corp. 10,000 130
Polo Ralph Lauren Corp. Class 240,000 5,970
A (a)
St. John Knits, Inc. 155,000 4,108
Supreme International Corp. 452,900 7,246
(a)(d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Tandy Brands Accessories, 561,200 $ 9,049
Inc. (a)(d)
Worldtex, Inc. (a)(d) 940,000 2,938
133,365
TOTAL DURABLES 630,588
ENERGY - 1.8%
COAL - 0.0%
RJB Mining PLC 1,250,000 1,275
ENERGY SERVICES - 1.0%
AKITA Drilling Ltd. Class A 863,500 4,143
(non-vtg.)
Alpine Oil Services Corp. (a) 600,000 357
Australian Oil & Gas Corp. 4,090,167 4,357
Ltd. (d)
Aztec Manufacturing Co. (d) 423,900 3,815
Brovig Offshore ASA (a) 33,600 147
Carbo Ceramics, Inc. 657,800 10,525
Computalog Ltd. (a) 431,400 1,613
Dawson Geophysical Co. (a) 205,100 1,359
IHC Caland NV 10,000 421
Input/Output, Inc. (a) 300,000 1,913
Lufkin Industries, Inc. 155,000 2,887
Offshore Logistics, Inc. (a) 55,000 536
Pe Ben Oilfield Services Ltd. 300,000 596
(a)(d)
Petroleum Helicopters, Inc. 211,200 3,379
Petroleum Helicopters, Inc. 300,000 4,800
(non-vtg.)
Pool Energy Services Co. (a) 225,000 2,700
Powell Industries, Inc. (a)(d) 1,027,500 11,046
RPC Energy Services, Inc. (d) 2,867,500 19,356
Seitel, Inc. (a) 428,900 5,495
Superior Energy Services, 1,612,200 4,031
Inc. (a)(d)
83,476
OIL & GAS - 0.8%
Adams Resources & Energy, 421,300 2,633
Inc. (d)
Cabot Oil & Gas Corp. Class A 100,000 1,313
Castle Energy Corp. (d) 408,750 6,642
Columbus Energy Corp. (a)(d) 323,500 2,123
Conoco, Inc. Class A (a) 100,000 1,994
Crown Central Petroleum Corp. 440,000 3,493
Class A (a)(d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Elf Gabon 10,000 $ 1,017
ENEX Resources Corp. (a)(d) 144,300 649
Fletcher Challenge Ltd. 900,000 1,748
(Energy Division)
Foremost Industries, Inc. 447,500 814
(a)(d)
Hallwood Consolidated 241,550 3,110
Resources Corp. (a)(d)
Hokuriku Gas Co. 1,350,000 3,131
Holly Corp. (d) 440,100 6,822
Markwest Hydrocarbon, Inc. (a) 399,700 2,998
Maynard Oil Co. (a)(d) 298,800 2,316
Novus Petroleum Ltd. 1,750,542 1,715
Penn West Petroleum Ltd. (a) 350,000 3,659
Petrofina SA warrants 8/5/03 197,200 1,639
(a)
Petroleum Development Corp. 1,551,000 4,944
(a)(d)
Premier Oil PLC 20,500,000 4,048
Santa Fe Energy Resources, 250,000 1,453
Inc. (a)
Swift Energy Co. (a)(d) 1,644,700 10,074
Torch Energy Royalty Trust 300,000 1,406
Veritas DGC, Inc. (a) 75,000 933
70,674
TOTAL ENERGY 155,425
FINANCE - 16.3%
BANKS - 5.4%
Banco Santander Puerto Rico 100,000 2,106
(a)
Bank of The Ozarks, Inc. 98,000 2,279
Bergensbanken ASA (d) 1,200,000 10,603
Canadian Western Bank (d) 900,000 13,460
Cathay Bancorp, Inc. 218,000 8,148
Den Norske Bank ASA (e) 900,000 3,838
Den Norske Bank ASA Class A 3,100,000 13,221
Free shares
Finansbanken ASA (Reg.) (a) 250,000 1,295
First BanCorp P R (d) 2,867,800 77,431
Fokus Bank AS (Reg.) 1,707,563 17,242
GBC Bancorp (d) 840,000 18,690
Gronlandsbanken AS 20,000 581
Hanmi Bank (a) 152,590 2,213
Jyske Bank AS (Reg.) 250,000 21,962
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Laurentian Bank 888,500 $ 15,904
Midtbank AS (a) 10,050 338
National Bank of Canada 3,825,000 59,354
Nordbanken Holding AB 10,000,000 69,178
Nordlandsbanken AS (d) 321,700 8,121
Nordvestbank (Reg.) 4,500 423
Okobank Class A 279,000 5,071
Ringkjobing Bank (d) 15,865 2,981
SouthTrust Corp. 1,000,000 37,125
Spar Nord Bankaktieselskab 30,035 1,367
Sparebanken More 39,084 846
Sparebanken NOR primary 1,000,000 19,664
shares certificates
Sparebanken Nord-Norge 100,000 2,152
Sparebanken Rana 37,550 688
Grunnfondsbevis (d)
Sparebanken Rogaland capital 25,000 681
certificates
Sterling Bancorp 372,500 8,381
Svenska Handelsbanken 350,000 13,900
Sydbank AS 338,500 15,256
T R Financial Corp. 370,300 14,002
Wing Hang Bank Ltd. 200,000 407
468,908
CREDIT & OTHER FINANCE - 1.2%
Aiful Corp. 75,000 4,960
Amagerbanken AS 34,850 1,438
Amtsspar Fyn Holding AS 45,000 2,326
Compagnie Financiere de 50,000 3,698
Credit Industriel et
Commercial et de l' Union
Europeene
Compagnie Financiere de 11,110 1,022
Credit Industriel et
Commercial et de l' Union
Europeene (New)
Credia Co. Ltd. 372,800 5,348
Doral Financial Corp. 2,000,000 40,063
FIH AS Class B 750,000 17,188
Firstcity Financial Corp. (a) 265,000 3,876
Home Capital Group Class B 150,000 342
(sub-vtg.) (a)
JCG Holdings Ltd. 12,900,000 3,454
Life Financial Corp. (a) 284,200 1,421
Nissin Co. Ltd. 150,000 3,118
Paragon Group of Companies PLC 2,000,625 6,156
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
Resource Bancshares Mortgage 110,000 $ 1,636
Group, Inc.
Surrey Metro Savings Credit 565,000 5,272
Union (non-vtg.)
Triad Guaranty, Inc. (a) 72,600 1,488
WSFS Financial Corp. 263,000 4,340
107,146
INSURANCE - 8.5%
Amerin Corp. (a) 632,500 14,706
Amerus Life Holdings, Inc. 1,000,000 19,688
Blanch E.W. Holdings, Inc. 525,000 29,761
Capital Re Corp. 630,000 11,458
CMAC Investments Corp. 50,000 2,194
Commerce Group, Inc. 1,230,000 35,670
Cotton State Life & Health 429,700 5,506
Insurance Co. (d)
Desjardins-Laurentian Finance 482,500 5,587
Corp. Class A (sub-vtg.) (d)
Enhance Financial Services 125,000 3,125
Group, Inc.
Erie Indemnity Co. Class A 250,000 7,625
Fairfax Financial Holdings 1,117,900 279
rights 12/31/07 (a)
Farm Family Holdings, Inc. 525,300 17,072
(a)(d)
Financial Industries Corp. (a) 191,700 3,163
Fishers International PLC 300,000 188
FPIC Insurance Group, Inc. (a) 175,000 8,411
Fremont General Corp. 1,950,000 44,119
HCC Insurance Holdings, Inc. 1,241,800 24,137
Healthcare Recoveries, Inc. 725,000 11,600
(a)(d)
Hogg Robinson PLC 50,000 162
Independence Holding Co. 146,000 1,862
Independent Insurance PLC 1,150,000 4,825
Intercontinental Life Corp. 433,900 8,298
(d)
Investors Title Co. 128,500 2,731
IPC Holdings Ltd. (d) 2,500,000 55,156
Lambert Fenchurch Group PLC 1,000,000 1,333
Lasalle Re Holdings Ltd. (d) 1,502,700 27,800
Life USA Holding, Inc. (d) 1,952,500 22,576
Medical Assurance, Inc. 153,100 4,670
MMI Companies, Inc. (d) 1,395,000 23,715
Mobile America Corp. 142,300 587
National Western Life 170,000 20,995
Insurance Co. Class A (a)(d)
Nymagic, Inc. 203,900 3,556
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
PAULA Financial (d) 309,300 $ 2,861
Penn-America Group, Inc. 341,250 3,626
Philadelphia Consolidated 962,500 23,190
Holding Corp. (a)(d)
PMI Group, Inc. 264,500 11,340
Poe & Brown, Inc. 104,900 3,717
Professionals Insurance Co. 251,450 7,496
Management Group (a)
Protective Life Corp. 1,700,002 58,756
PXRE Corp. (d) 725,063 14,818
RenaissanceRe Holdings Ltd. 648,300 21,718
SCPIE Holding, Inc. (d) 628,700 18,665
Stirling Cooke Brown Holdings 413,500 6,409
Ltd.
Symons International Group, 317,900 2,861
Inc. (a)
Terra Nova (Bermuda) Holdings 1,781,400 43,088
Ltd. Class A (d)
UICI (a)(d) 2,850,000 61,453
Unico American Corp. (d) 351,500 4,130
Union Assurances Federales SA 300,088 37,838
744,521
SAVINGS & LOANS - 0.8%
CNY Financial Corp. (a) 130,000 1,414
Crazy Woman Creek Bancorp, 30,000 379
Inc.
Home Port Bancorp, Inc. 90,700 2,165
Independence Federal Savings 119,000 1,696
Bank (d)
Iroquois Bancorp, Inc. 109,400 2,407
PBOC Holdings, Inc. (a) 106,900 1,122
Peoples Bancorp, Inc. 175,000 1,794
Ringerikes Sparebank 6,200 156
Seacoast Financial Services 419,500 4,562
Corp. (a)
UCBH Holdings, Inc. (a) 337,500 4,598
Washington Federal, Inc. 2,000,000 51,375
71,668
SECURITIES INDUSTRY - 0.4%
Connor Clark Ltd. Class A 575,000 2,435
(non-vtg.)
Daiko Shoken Business Co. 100,000 360
Globaly Corp. 467,000 3,285
JWGenesis Financial Corp. (a) 264,934 1,855
London Pacific Group Ltd. 3,217,330 10,324
Man (E D & F) Group PLC 900,000 4,665
MFC Bancorp Ltd. 559,500 4,336
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - CONTINUED
Nac Co. Ltd. 110,000 $ 364
Norvestia OY AB Class B 240,000 3,762
31,386
TOTAL FINANCE 1,423,629
HEALTH - 8.0%
DRUGS & PHARMACEUTICALS - 0.8%
Apothekers Cooperatie OPG 13,350 324
Fuji Pharmaceutical Co. Ltd. 150,000 549
Herbalife International, Inc.:
Class A (d) 1,037,500 15,757
Class B (non-vtg.) 2,010,500 24,503
Hoshi Ito Co. Ltd. 200,000 789
Medco Research, Inc. (a) 346,800 8,952
Nature's Sunshine Products, 1,032,500 13,745
Inc. (d)
Riken Vitamin Oil Co. Ltd. 748,000 6,142
Seikagaku Corp. 50,000 391
Twinlab Corp. (a) 10,000 125
71,277
MEDICAL EQUIPMENT & SUPPLIES
- - 4.2%
ADAC Laboratories (a)(d) 1,360,000 30,005
AVECOR Cardiovascular, Inc. 47,200 584
(a)
Ballard Medical Products (d) 2,900,500 70,156
Biomet, Inc. 2,400,000 87,900
Dentsply International, Inc. 802,600 22,072
Dianon Systems, Inc. (a) 44,500 370
Elscint Ltd. (a)(d) 1,360,200 15,727
EMPI, Inc. (a) 20,000 495
ESC Medical Systems Ltd. 2,208,300 13,802
(a)(d)
Exactech, Inc. (a) 61,500 677
Getz Brothers Co. Ltd., Japan 100,000 352
HPSC, Inc. (a)(d) 252,000 2,237
ICU Medical, Inc. (a)(d) 560,000 11,060
Lunar Corp. (a) 63,800 552
Medstone International, Inc. 561,200 4,349
(a)(d)
Nitinol Medical Technologies, 300,000 1,688
Inc. (a)
Ocular Sciences, Inc. (a) 510,000 11,794
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - CONTINUED
OEC Medical Systems, Inc. (d) 1,274,000 $ 35,831
Orthofix International NV 947,700 14,837
(a)(d)
Respironics, Inc. (a)(d) 2,065,000 31,749
Utah Medical Products, Inc. 838,000 5,395
(a)(d)
361,632
MEDICAL FACILITIES MANAGEMENT
- - 3.0%
Chronimed, Inc. (a) 445,000 4,728
Clinic Holdings Ltd. 422,282 66
Community Hospitals Group PLC 325,000 2,604
Compdent Corp. (a)(d) 1,011,300 13,147
Corvel Corp. (a)(d) 245,500 8,961
Cryolife, Inc. (a)(d) 714,100 8,569
First Commonwealth, Inc. (d) 227,000 2,639
Health Management Associates, 10,000 126
Inc. Class A (a)
HEALTHSOUTH Corp. (a) 2,000,000 27,125
Quest Diagnostics, Inc. (a)(d) 2,034,000 38,519
Quorum Health Group, Inc. (a) 2,750,000 23,375
Ramsay Health Care Ltd. 1,000,000 1,166
RehabCare Group, Inc. (a)(d) 565,000 11,512
Res-Care, Inc. (a)(d) 1,375,000 30,766
Safeguard Health Enterprises, 462,700 1,475
Inc. (a)(d)
Syncor International Corp. (a) 283,000 8,313
Total Renal Care Holdings, 150,000 3,497
Inc. (a)
United Wisconsin Services, 625,500 5,395
Inc.
Universal Health Services, 1,500,000 67,125
Inc. Class B (a)
259,108
TOTAL HEALTH 692,017
HOLDING COMPANIES - 0.4%
DCC PLC (Ireland) 600,000 5,384
DCC PLC (United Kingdom) 2,600,000 22,889
Fonciere Financiere et Part SA 25,000 1,647
Hunting Group PLC 1,450,000 2,362
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HOLDING COMPANIES - CONTINUED
Perry Group (d) 1,500,000 $ 3,196
Siparex (Societe de 69,718 1,901
Particiations dans les
Enterprises Regionales en
Expansion)
37,379
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.3%
ELECTRICAL EQUIPMENT - 1.6%
Aichi Electric Co. Ltd. (a) 1,000,000 1,804
American Power Conversion 975,000 49,847
Corp. (a)
Astronics Corp. (a) 224,450 2,553
Bairnco Corp. (d) 900,900 5,856
Blick PLC Class L 1,350,000 8,530
BMC Industries, Inc. 509,200 2,769
C&D Technologies, Inc. 338,500 8,082
Chase Corp. (d) 311,600 3,700
Chloride Group PLC 600,000 573
Cobra Electronics Corp. (a)(d) 500,000 2,125
Denyo Co. Ltd. 300,000 1,572
Emcee Broadcast Products, 170,000 250
Inc. (a)
Genlyte Group, Inc. (a) 545,000 9,776
Hughes Supply, Inc. 790,000 20,046
Inaba Denkisangyo Co. Ltd. 700,000 5,923
Norbain PLC 100,000 378
NovAtel, Inc. (a) 273,500 581
QPL International Holdings 1,000,000 28
Ltd.
Twentsche Kabel Holding NV 20,004 511
Vertex Communications Corp. 511,000 8,943
(a)(d)
Volex Group PLC 25,000 160
Woodhead Industries, Inc. 37,500 415
Yaesu Musen Co. Ltd. 75,000 476
Yurtec Corp. 1,150,000 6,766
141,664
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.7%
AGCO Corp. 600,000 4,425
Amadasonoike Co. Ltd. 190,000 483
AVTEAM, Inc. Class A (a) 66,200 314
Baldwin Technology Co., Inc. 354,600 2,017
Class A (a)
Chart Industries, Inc. 1,149,100 9,049
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
CompX International, Inc. (a) 208,900 $ 4,008
Control Devices, Inc. 350,000 5,294
CPAC, Inc. (d) 695,000 3,301
DT Industries, Inc. 74,000 999
Fuji Oozx, Inc. (a) 200,000 283
Fuji Technica, Inc. 25,000 136
Fukushima Industries Corp. 25,000 150
Gardner Denver Machinery, 1,015,000 12,561
Inc. (a)(d)
Gehl Co. (a)(d) 636,700 10,665
Hardinge, Inc. 311,600 5,005
IDEX Corp. (d) 2,365,000 53,952
Kaydon Corp. 950,000 31,884
KCI (Konecranes International) 50,000 1,647
KCI (Konecranes 100,000 3,294
International) (e)
Linx Printing Technology 150,000 370
Mark IV Industries, Inc. 695,400 10,431
Mars Engineering Corp. 50,200 373
New Holland NV 1,303,700 14,178
Oilgear Co. 46,800 603
P & F Industries, Inc. Class 274,500 2,694
A (a)(d)
Powerscreen International PLC 3,352,900 6,952
Rauma OY 79,600 859
Rotork PLC 300,000 1,777
Sansei Transport 750,000 2,867
Shin Nippon Machinery Co. 500,000 790
Ltd.
Specialty Equipment 945,400 26,530
Companies, Inc. (a)
Speizman Industries, Inc. 226,000 1,059
(a)(d)
Strongco, Inc. (a) 13,500 57
TB Wood's Corp. (d) 372,200 4,420
Trident International, Inc. 56,000 921
(a)
Twin Disc, Inc. (d) 268,400 5,200
Wakita & Co. Ltd. 750,000 2,641
232,189
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.0%
NSC Corp. (a)(d) 550,400 $ 464
Weston (Roy F.), Inc. Class A 183,800 460
(a)
924
TOTAL INDUSTRIAL MACHINERY & 374,777
EQUIPMENT
MEDIA & LEISURE - 7.3%
BROADCASTING - 2.1%
CanWest Global Communications 1,325,006 20,999
Corp. (sub-vtg.)
Capital Radio PLC 850,000 9,763
Cogeco Cable, Inc. (d) 1,000,000 16,709
Cogeco, Inc. (sub. vtg.) (d) 1,391,500 24,999
Davel Communications Group, 270,435 3,668
Inc. (a)
Matav-Cable System Media Ltd. 276,500 6,256
sponsored ADR
Moffat Communications Ltd. (d) 1,208,700 20,316
Moviefone, Inc. Class A (a) 75,200 1,880
Nielsen Media Research, Inc. 1,204,999 22,744
(a)
P4 Radio Hele Norge ASA 700,000 2,883
Prime Television Ltd. 1,519,128 1,915
Radio Pacific Ltd. (a) 300,000 720
Radiomutuel, Inc. Class A (a) 350,000 3,416
Regional Cablesystems, Inc. 50,000 410
(a)
Scottish Media Group PLC 575,000 7,267
Scottish Radio Holdings PLC 498,800 4,654
Southern Cross Broadcasting 821,951 4,005
Australia Ltd.
Spice Entertainment 550,000 3,506
Companies, Inc. (a)
TCA Cable TV, Inc. 330,800 12,756
TVA Group, Inc. Class B (a) 1,075,000 12,769
181,635
ENTERTAINMENT - 1.2%
Airtours PLC 300,000 1,794
Alliance Atlantis 221,500 3,928
Communications Corp. (a)
Alliance Atlantis 100,000 1,773
Communications Corp. (a)(e)
European Leisure PLC 547,000 675
King World Productions, Inc. 3,440,000 94,170
(a)
Lakes Gaming, Inc. (a) 271,900 2,634
Scientific Games Holdings 173,100 2,986
Corp. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
Shingakukai Co. 125,000 $ 344
Television & Media Services 1,750,000 1,655
Ltd.
109,959
LEISURE DURABLES & TOYS - 0.0%
Hamleys PLC 150,000 306
National R.V. Holdings, Inc. 10,000 260
(a)
PlayCore, Inc. (a) 245,515 1,105
1,671
LODGING & GAMING - 0.2%
Choice Hotels International, 185,100 2,372
Inc. (a)
Choice Hotels Skandanavia ASA 150,000 231
(a)
Hanover International PLC 416,500 672
Lodgian, Inc. (a) 125,000 563
Riviera Holdings Corp. rights 90,900 80
12/31/99 (a)
Ryan Hotels PLC (d) 3,900,979 4,012
ShoLodge, Inc. (a) 280,500 1,928
Sun International Hotels Ltd. 106,000 4,525
(a)
14,383
PUBLISHING - 1.7%
A-Pressen ASA Series A 122,222 1,949
Adscene Group PLC Class L 500,000 1,193
Bemrose Corp. PLC 325,000 1,529
Fine Art Developments PLC 1,400,000 2,004
Class L
Independent Newspapers PLC 350,000 1,325
Johnston Press PLC 1,950,000 7,541
Journal Register Co. (a) 947,700 14,452
Kauppakaari OY 125,000 2,016
Newsquest PLC 150,000 733
Pulitzer Publishing Co. 100,000 7,969
R.H. Donnelley Corp. 1,306,700 21,316
Reader's Digest Association, 275,000 7,906
Inc. Class A (non-vtg.)
Roto Smeets de Boer NV (a) 175,000 6,550
Schibsted AS Series B 200,000 2,923
Southnews PLC 100,000 650
Sterling Publishing Group PLC 400,000 115
Talentum OY Class B (d) 1,075,000 17,096
VLT AB Class B 111,600 1,015
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Wegener Arcade NV 50,000 $ 747
WSOY (Werner Soderstrom 675,000 49,035
Osakeyhtio) Class B (d)
148,064
RESTAURANTS - 2.1%
Applebee's International, 2,078,300 45,463
Inc. (d)
ARK Restaurants Corp. (a)(d) 270,000 2,734
Benihana, Inc. (a)(d) 341,400 4,417
Benihana, Inc. Class A (a)(d) 266,800 3,193
Break for the Border Group PLC 759,700 500
Consolidated Products, Inc. 1,275,000 22,313
(a)
Elxsi Corp. (a)(d) 286,000 2,860
Flanigans Enterprises, Inc. 90,700 771
(d)
IHOP Corp. (a)(d) 759,200 32,646
Logan's Roadhouse, Inc. (a)(d) 380,000 9,025
Mikes Restaurants, Inc. (a)(d) 272,500 361
Morton's Restaurant Group, 350,000 6,366
Inc. (a)(d)
Restaurant Brands NZ Ltd. 1,000,000 766
Sonic Corp. (a)(d) 1,935,000 48,859
180,274
TOTAL MEDIA & LEISURE 635,986
NONDURABLES - 4.5%
AGRICULTURE - 0.3%
Fresh Del Monte Produce Inc. 224,800 4,370
(a)
IAWS Group PLC 1,600,000 6,725
IAWS Group PLC Class A (UK 500,000 2,098
Reg.)
Nutreco Holding NV 90,000 3,691
Sylvan, Inc. (a)(d) 594,000 8,316
25,200
BEVERAGES - 0.1%
National Beverage Corp. (a) 303,300 2,673
Shikoku Coca-Cola Bottling 91,500 1,273
Co. Ltd.
Todhunter International, Inc. 226,400 1,783
(a)
5,729
FOODS - 0.7%
Agribrands International, 300,000 10,088
Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Benson's Crisps PLC 1,750,000 $ 1,238
Cagle's, Inc. 96,700 1,970
Corn Products International, 455,000 12,086
Inc.
Greggs PLC 70,000 2,787
Hazlewood Foods PLC 50,000 95
Laennen Tehtaat OY 50,000 585
Matthews (Bernard) PLC 600,000 1,195
Perkins Foods PLC 2,000,320 4,213
Raisio Group PLC 500,000 3,908
Riviana Foods, Inc. (d) 814,000 18,519
Robert Wiseman Dairies PLC 400,000 1,264
Shoei Foods Corp. 200,000 670
Super Coffeemix Manufacturing 1,250,000 266
Ltd.
Tokatsu Foods Co. 34,000 67
Worthington Foods, Inc. 10,000 112
59,063
HOUSEHOLD PRODUCTS - 1.5%
Alberto-Culver Co. Class A 1,000,000 23,500
American Safety Razor Co. 1,065,400 11,719
(a)(d)
Comany, Inc. 100,000 515
Del Laboratories, Inc. (d) 476,066 11,783
DSG International Ltd. (a)(d) 662,000 2,152
Helen of Troy Corp. (a)(d) 2,705,000 43,280
House of Rose Co. Ltd. 50,000 245
IWP International PLC (Dublin 525,000 1,014
Reg.)
IWP International PLC (United 800,000 1,580
Kingdom Reg.)
Jean Philippe Fragrances, 100,000 669
Inc. (a)
Luxottica Group Spa sponsored 75,000 797
ADR
Mayborn Group PLC 100,000 95
Oriflame International SA 450,000 1,385
Paterson Zochonis PLC:
Class A (non-vtg.) 50,000 243
Class L 25,000 139
Premark International, Inc. 730,000 25,003
Stephan Co. (d) 413,200 4,416
Swallowfield PLC Class L 100,000 87
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Yule Catto & Co. PLC 675,443 $ 2,945
Zotefoams PLC Class L 96,700 137
131,704
TOBACCO - 1.9%
Gallaher Group PLC 3,475,000 24,588
Gallaher Group PLC sponsored 4,900,000 136,246
ADR
Standard Commercial Corp. (d) 1,248,900 9,757
170,591
TOTAL NONDURABLES 392,287
PRECIOUS METALS - 0.5%
De Beers Consolidated Mines 1,300,000 18,525
Ltd. ADR
Great Central Mines Ltd. 1,000,000 901
Industrias Penoles SA 4,700,000 14,326
Normandy Mt. Leyshon Ltd. 1,000,000 1,311
Normandy NFM Ltd. 125,000 268
Orogen Minerals Ltd. GDR 265,000 2,584
(a)(e)
Richmont Mines, Inc. (a)(d) 800,000 2,012
Ross Mining NL 1,522,747 873
Sons of Gwalia NL 1,585,954 4,640
45,440
RETAIL & WHOLESALE - 7.9%
APPAREL STORES - 2.9%
Baker (J.), Inc. 449,900 2,671
Charle Co. Ltd. 71,000 610
Chateau Stores of Canada Ltd. 192,900 1,142
Class A (d)
Chicos Fas, Inc. (a) 400,000 12,200
Claire's Stores, Inc. (d) 2,875,100 56,783
Dress Barn, Inc. (a) 500,000 8,031
Footstar, Inc. (a)(d) 1,500,004 37,969
Goldlion Holdings Ltd. 1,500,000 84
Gymboree Corp. (a) 1,100,000 8,663
Intimate Brands, Inc. Class A 1,019,200 40,641
Kenneth Cole Productions, 704,000 15,928
Inc. Class A (a)(d)
New Look Group PLC (a)(e) 1,000,000 2,180
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Noda Corp. 100,000 $ 362
PrimeSource Corp. 224,500 1,487
Ross Stores, Inc. 1,335,000 52,733
S & K Famous Brands, Inc. 475,000 4,750
(a)(d)
San Francisco Boutiques, Inc. 215,000 861
Class B (sub-vtg.) (a)(d)
Shirmax Fashions Ltd. (a) 450,000 1,146
United Retail Group, Inc. (a) 370,000 3,677
251,918
APPLIANCE STORES - 0.0%
Hirsch International Corp. 655,000 2,538
Class A (a)(d)
DRUG STORES - 0.5%
Jean Coutu Group, Inc. Class 1,800,000 40,200
A (d)
GENERAL MERCHANDISE STORES -
1.3%
Arnotts PLC 100,387 804
BJ's Wholesale Club, Inc. (a) 1,750,000 77,875
Daiwa Co. Ltd. 300,000 750
Jo-Ann Stores, Inc.:
Class A (a)(d) 543,650 8,291
Class B (non-vtg.) (a) 1,090,900 13,773
Shopko Stores, Inc. (a) 225,500 7,160
Stein Mart, Inc. (a) 905,900 6,511
115,164
GROCERY STORES - 1.4%
Carr-Gottstein Foods Co. 414,000 4,683
(a)(d)
Eagle Food Centers, Inc. (a) 42,500 149
Food Lion, Inc. Class A 3,400,000 33,150
Hemkopskedjan AB Series B 25,000 247
Iceland Group PLC 4,750,000 19,306
Metro Richelieu, Inc. Class A 3,229,700 44,667
(d)
Schultz Sav-O Stores, Inc. (d) 372,100 6,140
Somerfield PLC 1,700,000 11,078
Suprema Specialties, Inc. (a) 212,000 1,219
Western Beef, Inc. (a)(d) 423,400 3,070
Whittard of Chelsea PLC 431,950 469
124,178
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.8%
Advanced Marketing Services, 144,200 3,461
Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Blair Corp. (d) 890,500 $ 18,645
Brookstone, Inc. (a)(d) 744,600 10,657
Brylane, Inc. (a) 200,000 4,613
Cameron Ashley Building 425,600 5,692
Products, Inc. (a)
Cole National Corp. Class A 1,065,000 17,706
(a)(d)
Daisytek International Corp. 820,000 16,195
(a)
Elcom International, Inc. (a) 600,000 1,050
Farepak PLC 1,000,000 3,785
Finish Line, Inc. Class A 1,891,700 17,380
(a)(d)
Finlay Enterprises, Inc. 582,700 6,410
(a)(d)
Friedmans, Inc. Class A (a)(d) 1,343,700 16,376
Grafton Group PLC 100,000 1,818
Heiton Holdings PLC 250,000 540
Homebase, Inc. (a)(d) 1,980,000 13,241
Partridge Fine Arts PLC 150,000 148
PC Connection, Inc. 50,000 984
Piercing Pagoda, Inc. (a)(d) 910,000 8,873
Rex Stores Corp. (a)(d) 571,400 7,178
Sound Advice, Inc. (a)(d) 230,300 1,008
Sound Advice, Inc. warrants 11,205 0
6/14/99 (a)
Sportsmans Guide, Inc. (a) 175,000 1,214
156,974
TRADING COMPANIES - 0.0%
Mitani Sangyo Co. Ltd. 100,000 378
TOTAL RETAIL & WHOLESALE 691,350
SERVICES - 4.8%
ADVERTISING - 0.4%
ADVO, Inc. (a) 191,400 4,833
Grey Advertising, Inc. 12,000 4,200
InfoUSA, Inc.:
Class A (a)(d) 1,915,600 11,015
Class B (a)(d) 1,985,000 11,538
Saatchi & Saatchi PLC 150,000 375
TMP Worldwide, Inc. 109,717 5,879
37,840
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
EDUCATIONAL SERVICES - 0.1%
Childrens Comprehensive 122,500 $ 1,638
Services, Inc. (a)
Concorde Career Colleges, 250,000 125
Inc. (a)
Coutts Consulting Group PLC 550,000 181
Class L
Institution of General 300,000 977
Education
Quest Education Corp. (a)(d) 709,700 7,940
Up, Inc. 400,000 1,099
11,960
LEASING & RENTAL - 0.2%
Aaron Rents, Inc. Class B 421,700 5,851
Cort Business Services Corp. 397,200 7,448
(a)
Gowrings PLC 200,000 306
Nishio Rent All Co. Ltd. 500,000 3,127
Rainbow Rentals, Inc. (a) 32,700 327
Rakentajain Konevuokraamo OY 75,000 818
Class B
17,877
PRINTING - 1.2%
Adare Printing Group PLC 415,000 3,300
(Ireland)
Adare Printing Group PLC 660,004 5,539
(United Kingdom)
Pubco Corp. (a)(d) 319,500 3,035
Reynolds & Reynolds Co. Class 4,385,000 87,700
A (d)
Wyndeham Press Group PLC 550,000 2,199
101,773
SERVICES - 2.9%
Aktiv Kapital ASA 200,000 797
American Oncology Resources, 500,000 6,844
Inc. (a)
Asi Solutions, Inc. (a) 7,500 74
BA Merchant Services, Inc. 1,626,700 32,737
Class A (a)(d)
Barbers Hairstyling for Men, 124,575 1,588
Inc. (a)
Caldwell Partners 525,000 2,397
International, Inc. Class A
(non-vtg.)
Candle Australia Ltd. 52,660 80
Chodai Co. Ltd. 200,000 816
Compass International 228,600 1,686
Services Corp.
Corporate Services Group PLC 500,000 1,127
Craig (Jenny), Inc. (a) 995,000 6,032
Day Runner, Inc. (a) 492,000 6,642
Diversified Corporate 257,200 1,447
Resources, Inc. (a)(d)
Dun & Bradstreet Corp. 1,150,000 35,075
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
Embrex, Inc. (a) 108,000 $ 567
Eurocamp PLC 275,000 986
Exponent, Inc. (a) 202,200 1,238
Eyeful Home Technology, Inc. 250,000 1,288
Fugro NV 157,600 3,124
Go-Ahead Group (The) PLC 300,000 3,569
Halma PLC 1,440,000 3,009
Horizon Health Corp. (a)(d) 604,300 4,022
ICTS International NV (a) 35,000 193
Lai Worldwide, Inc. (a)(d) 682,000 4,177
Norrell Corp. 317,800 5,482
Pittston Co. (Brinks Group) 2,300,000 66,413
(d)
Programming & Systems, Inc. 313,300 0
(a)(d)
Proudfoot PLC 250,000 72
Right Management Consultants, 673,000 10,389
Inc. (a)(d)
Seattle FilmWorks, Inc. (a)(d) 1,635,000 6,336
SOS Staffing Services, Inc. 314,000 3,356
(a)
Sterile Recoveries, Inc. (a) 71,100 773
Tanabe Management Consulting 200,000 502
Co.
Thomas Group (a) 160,900 1,599
TT Group PLC 2,400,000 6,358
Unifirst Corp. 365,000 8,532
Wesco, Inc. 200,000 521
Winston Resources, Inc. (a)(d) 288,900 921
Zebra Technologies Corp. (a) 650,000 19,622
250,391
TOTAL SERVICES 419,841
TECHNOLOGY - 11.9%
COMMUNICATIONS EQUIPMENT - 0.7%
Andrew Corp. (a) 1,545,000 28,003
Aspect Telecommunications 720,600 6,485
Corp. (a)
Dialogic Corp. (a) 290,000 7,395
KTK Telecommunications 100,000 464
Engineering Co. Ltd.
Kyosan Electric Manufacturing 500,000 1,069
Co. Ltd.
Lo Jack Corp. (a) 124,700 1,422
Norstan, Inc. (a) 299,000 3,700
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Plantronics, Inc. (a) 82,900 $ 6,689
Tollgrade Communications, 499,000 8,982
Inc. (a)(d)
64,209
COMPUTER SERVICES & SOFTWARE
- - 6.3%
4Front Software 40,000 400
International, Inc. (a)
Affiliated Computer Services, 1,100,000 53,075
Inc. Class A (a)
Aladdin Knowledge Systems 575,000 6,900
Ltd. (a)(d)
Analysts International Corp. 178,000 2,403
Atlantic Data Services, Inc. 40,000 450
(a)
BancTec, Inc. (a)(d) 1,750,100 22,751
Black Box Corp. (a)(d) 1,428,800 52,419
Boole & Babbage, Inc. (d) 1,515,055 46,683
CI Technologies Group Ltd. 1,000,000 2,967
CompuCom Systems, Inc. (a) 100,000 400
Computer Learning Centers, 1,741,700 8,981
Inc. (a)(d)
Computer Management Sciences, 20,000 311
Inc. (a)
Condor Technology Solutions, 75,000 755
Inc. (a)
Cotelligent, Inc. (a) 93,500 1,958
Daitec Co. Ltd. 375,200 5,318
Data Research Associates, 200,000 2,788
Inc.
ECI Telecom Ltd. 950,000 41,206
Edusoft Ltd. (d) 472,000 3,658
Equitrac Corp. (a)(d) 353,000 6,884
Fair, Isaac & Co., Inc. 600,000 30,300
FDP Corp. (d) 574,300 8,758
Forsoft Ltd. (a) 10,000 107
GSE Systems, Inc. (a) 197,000 591
Inacom Corp. (a) 650,000 8,491
Industri-Matematik 256,800 1,140
International Corp. (a)
Infinium Software, Inc. (a) 180,000 968
Informa Group PLC 2,739,000 13,656
JDA Software Group, Inc. 1,750,000 12,688
(a)(d)
Kewill Systems PLC 200,000 4,772
Mapics, Inc. (a) 400,000 4,300
Melita International Corp. 825,000 16,500
(a)(d)
MMT Computing PLC 35,000 340
MPSI Systems, Inc. (a) 115,000 273
Mysoftware Co. (a)(d) 250,000 3,344
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
New Dimension Software Ltd. 295,000 $ 14,234
(a)
Ontrack Data International, 217,000 1,248
Inc. (a)
Orbotech Ltd. (a) 90,000 3,763
Orcad, Inc. (a)(d) 468,700 3,398
Parity PLC 25,000 244
Phoenix Technologies Ltd. 1,329,637 11,634
(a)(d)
Platinum Software Corp. (a) 79,400 859
Project Software & 477,000 12,104
Development, Inc. (a)
Prophet 21, Inc. (a) 13,500 174
Rainbow Technologies, Inc. 672,150 14,283
(a)(d)
Remedy Corp. (a)(d) 1,725,000 38,381
Sapiens International Corp. 216,900 1,925
NV (a)
SPSS, Inc. (a)(d) 864,200 17,392
STB Systems, Inc. (a) 45,000 338
Symantec Corp. (a) 2,150,000 43,941
Systems & Computer Technology 100,000 1,000
Corp. (a)
Tecnomatix Technologies Ltd. 100,000 1,475
(a)
Unigraphics Solutions, Inc. 560,000 10,395
Class A (a)(d)
Viasoft, Inc. (a) 350,000 2,122
545,445
COMPUTERS & OFFICE EQUIPMENT
- - 1.8%
Adaptec, Inc. (a) 1,000,000 23,125
Advanced Digital Information 949,300 17,562
Corp. (a)(d)
Amplicon, Inc. 522,000 7,895
Ciprico, Inc. (a) 50,000 494
Creative Technology Ltd. (a) 350,000 5,206
Cybex Corp. (d) 700,000 20,825
Equinox Systems, Inc. (a)(d) 295,100 3,836
Kronos, Inc. (a)(d) 708,800 33,491
Maezawa Kasei Industries Co. 200,000 1,890
Ltd.
Microtouch Systems, Inc. (a) 20,000 313
Nam Tai Electronics, Inc. 389,000 4,401
Nam Tai Electronics, Inc. 140,000 162
warrants 11/24/00 (a)
Pomeroy Computer Resources, 610,000 12,963
Inc. (a)(d)
Quantum Corp. (a) 800,000 19,150
Scan-Optics, Inc. (a)(d) 437,000 1,912
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
SED International Holdings, 960,000 $ 4,500
Inc. (a)(d)
Tech Data Corp. (a) 10,000 314
158,039
ELECTRONIC INSTRUMENTS - 0.6%
BTU International, Inc. (a)(d) 364,800 1,322
Cohu, Inc. 160,000 5,220
DSP Technology, Inc. (a)(d) 224,100 1,555
Hurco Companies, Inc. (a)(d) 379,028 1,623
Intest Corp. (a)(d) 465,000 3,023
Mesa Laboratories, Inc. (a) 135,400 609
Modern Controls, Inc. 12,500 56
Nanometrics, Inc. (a)(d) 853,500 6,988
Reliability, Inc. (a)(d) 577,500 2,851
Sanderson Electronics PLC 1,600,000 4,081
SBS Technologies, Inc. (a) 287,100 6,532
Silicon Valley Group, Inc. (a) 25,000 411
Tech-Sym Corp. (a)(d) 404,200 10,585
Toko Seiko Co. Ltd. 300,000 502
Wireless Telecom Group, Inc. 1,755,700 3,731
(d)
X-Rite, Inc. 275,000 2,269
51,358
ELECTRONICS - 2.5%
Align-Rite International, 448,000 6,048
Inc. (a)(d)
Apollo Electronics Co. Ltd. 50,000 279
ASM Pacific Technology Ltd. 3,456,000 1,606
Bergman & Beving AB Class B 600,000 7,802
Daidensha Co. Ltd. 100,000 463
Dallas Semiconductor Corp. (d) 2,000,000 73,375
Del Global Technologies Corp 259,800 2,663
(a)
Diodes, Inc. (a)(d) 504,000 2,835
General Semiconductor, Inc. 3,028,450 24,985
(a)(d)
Griffon Corp. (a)(d) 2,672,300 28,226
Kingboard Chemical Holdings 3,740,000 531
Ltd.
Methode Electronics, Inc. 1,400,000 17,500
Class A
Micro Linear Corp. (a)(d) 1,182,800 5,766
Microsemi Corp. (a)(d) 1,161,700 14,812
Nichicon Corp. 50,000 576
NU Horizons Electronics Corp. 434,500 2,281
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Optek Technology, Inc. (a) 50,000 $ 856
Percon Acquisition, Inc. (a) 44,000 352
Pericom Semiconductor Corp. 100,000 1,119
(a)
Roxboro Group PLC 400,000 1,665
Sedgemoor PLC 1,100,000 652
Siliconix, Inc. (a) 294,500 6,553
Stoneridge, Inc. (a) 380,000 6,935
Supertex, Inc. (a) 110,000 1,382
Taitron Components, Inc. 577,400 1,010
Class A (a)(d)
Techtronic Industries Co. 1,500,000 256
Tower Semiconductor Ltd. (a) 580,000 4,133
Varitronix International Ltd. 1,750,000 3,071
Video Display Corp. (a)(d) 289,100 1,988
Wong's International Holdings 10,000,000 1,136
Ltd.
Wong's International Holdings 1,000,000 3
Ltd. warrants 5/31/00 (a)
220,859
TOTAL TECHNOLOGY 1,039,910
TRANSPORTATION - 4.7%
AIR TRANSPORTATION - 2.5%
Alpha Airports Group PLC 700,000 461
America West Holding Corp. 500,000 10,750
Class B (a)
ASA Holdings, Inc. (d) 1,570,000 49,063
Comair Holdings, Inc. 1,500,000 55,031
Midwest Express Holdings, 930,000 27,086
Inc. (a)(d)
Transat AT, Inc. (a) 165,000 666
Viad Corp. 2,614,000 74,989
218,046
RAILROADS - 0.3%
Canadian National Railway Co. 500,000 26,502
SHIPPING - 0.0%
Isewan Terminal Service Co. 1,000,000 1,847
Ltd.
Meiko Transportation Co. Ltd. 200,000 696
Ocean Wilsons Holdings Ltd. 600,000 760
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TRANSPORTATION - CONTINUED
SHIPPING - CONTINUED
Tokyo Kisen Co. Ltd. 400,000 $ 1,134
Ugland International Holdings 500,000 551
PLC
4,988
TRUCKING & FREIGHT - 1.9%
Air Express International 1,590,000 30,011
Corp.
Arnold Industries, Inc. (d) 1,597,100 24,156
Baltrans Holdings Ltd. 1,400,000 101
Boyd Brothers Transportation, 172,500 1,251
Inc. (a)
Cannon Express, Inc. Class A 319,200 1,716
(a)(d)
Circle International Group, 358,100 6,155
Inc.
Daiwa Logistics Co. Ltd. 300,000 1,281
Eagle USA Airfreight, Inc. (a) 80,000 2,305
Goodfellow, Inc. (d) 325,000 1,763
Hub Group, Inc. Class A (a) 135,000 2,700
Japan Logistic Systems Corp. 100,000 255
Landstar System, Inc. (a) 95,000 3,966
Mark VII, Inc. (a)(d) 502,000 8,534
Marten Transport Ltd. (a)(d) 444,000 6,327
Old Dominion Freight Lines, 529,500 5,825
Inc. (a)(d)
P.A.M. Transportation 76,500 708
Services, Inc. (a)
Pittston Co. (Burlington 1,600,000 18,300
Group) (d)
Sakai Moving Service Co. Ltd. 100,000 861
Trancom Co. Ltd. 250,000 792
USFreightways Corp. 1,210,000 42,199
XTRA Corp. 73,400 3,060
162,266
TOTAL TRANSPORTATION 411,802
UTILITIES - 3.0%
CELLULAR - 0.3%
Century Telephone 350,000 23,800
Enterprises, Inc.
NTT Mobile Communication 107 4,504
Network, Inc. (e)
Smartone Telecommunications 300,000 894
Holdings Ltd.
29,198
ELECTRIC UTILITY - 0.2%
Avista Corp. 394,200 7,293
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Bangor Hydro-Electric Co. (a) 367,400 $ 4,776
CMP Group, Inc. 160,200 2,884
Maine Public Service Co. 80,600 1,249
16,202
GAS - 0.4%
Aquila Gas Pipeline Corp. 871,400 7,625
Atrion Corp. (a) 61,500 461
Bay State Gas Co. 168,100 6,650
MCN Energy Group, Inc. 109,600 1,945
Midcoast Energy Resources, 246,950 5,587
Inc.
Otaki Gas Co. Ltd. 330,000 969
Southwestern Energy Co. (d) 1,500,000 10,500
33,737
TELEPHONE SERVICES - 0.1%
Atlantic Tele-Network, Inc. 490,920 4,296
(d)
WATER - 2.0%
Brockhampton Holdings PLC 4,700,000 6,960
Class A (non-vtg.)
Hyder PLC (d) 7,860,000 106,314
Yorkshire Water PLC 7,475,000 61,255
174,529
TOTAL UTILITIES 257,962
TOTAL COMMON STOCKS 8,209,023
(Cost $7,038,974)
CONVERTIBLE PREFERRED STOCKS
- - 0.0%
ENERGY - 0.0%
OIL & GAS - 0.0%
Goodrich Petrolem Corp. 73,800 424
Series A, $0.80 (Cost $804)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.0%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES -
0.0%
Mercury Air Group, Inc. 7.75% B- $ 500 $ 540
2/1/06
TECHNOLOGY - 0.0%
COMMUNICATIONS EQUIPMENT - 0.0%
Aspect Telecommunications - 10,000 1,900
Corp. 0% 8/10/18 (e)
Trans Lux Corp. 7.5% 12/1/06 - 535 482
2,382
TOTAL CONVERTIBLE BONDS 2,922
(Cost $3,075)
CASH EQUIVALENTS - 5.8%
MATURITY AMOUNT (000S)
Investments in repurchase $ 4,409 4,407
agreements (U.S. Treasury
obligations), in a joint
trading account at 4.25%,
dated 1/29/99 due 2/1/99
SHARES
Taxable Central Cash Fund (c) 500,324,640 500,325
TOTAL CASH EQUIVALENTS 504,732
(Cost $504,732)
TOTAL INVESTMENT IN $ 8,717,101
SECURITIES - 100%
(Cost $7,547,585)
</TABLE>
LEGEND
(a) Non-income producing
(b) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(c) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(d) Affiliated company (see Note 6 of Notes to Financial Statements).
(e) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $27,600,000 or 0.3% of net assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investments in securities, is as follows:
United States of America 77.2%
United Kingdom 6.6
Canada 4.6
Bermuda 1.8
Israel 1.6
Finland 1.5
Sweden 1.1
(Others individually less 5.6
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 1999, the aggregate cost of investment securities for
income tax purposes was $7,548,964,000. Net unrealized appreciation
aggregated $1,168,137,000, of which $2,116,607,000 related to
appreciated investment securities and $948,470,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) JANUARY
31, 1999
(UNAUDITED)
ASSETS
Investment in securities, at $ 8,717,101
value (including repurchase
agreements of $4,407) (cost
$7,547,585) - See
accompanying schedule
Receivable for investments 19,820
sold
Receivable for fund shares 6,886
sold
Dividends receivable 6,729
Interest receivable 2,698
Redemption fees receivable 11
Other receivables 183
TOTAL ASSETS 8,753,428
LIABILITIES
Payable to custodian bank $ 1
Payable for investments 34,736
purchased
Payable for fund shares 54,061
redeemed
Accrued management fee 6,036
Other payables and accrued 2,187
expenses
TOTAL LIABILITIES 97,021
NET ASSETS $ 8,656,407
Net Assets consist of:
Paid in capital $ 7,327,209
Distributions in excess of (258)
net investment income
Accumulated undistributed net 159,971
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,169,485
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 382,621 $ 8,656,407
shares outstanding
NET ASSET VALUE and $22.62
redemption price per share
($8,656,407 (divided by)
382,621 shares)
Maximum offering price per $23.32
share (100/97.00 of $22.62)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED
JANUARY 31,
1999 (UNAUDITED)
INVESTMENT INCOME $ 42,550
Dividends (including $15,663
received from affiliated
issuers)
Interest 21,531
TOTAL INCOME 64,081
EXPENSES
Management fee Basic fee $ 28,619
Performance adjustment 7,395
Transfer agent fees 10,051
Accounting fees and expenses 423
Non-interested trustees' 20
compensation
Custodian fees and expenses 553
Audit 48
Legal 31
Total expenses before 47,140
reductions
Expense reductions (505) 46,635
NET INVESTMENT INCOME 17,446
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 243,047
(including realized gain
(loss) of $20,362 on sales
of investments in affiliated
issuers)
Foreign currency transactions 316 243,363
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (670,935)
Assets and liabilities in 104 (670,831)
foreign currencies
NET GAIN (LOSS) (427,468)
NET INCREASE (DECREASE) IN $ (410,022)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1998
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 17,446 $ 119,579
income
Net realized gain (loss) 243,363 974,263
Change in net unrealized (670,831) (66,124)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (410,022) 1,027,718
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (77,746) (106,826)
From net investment income
From net realized gain (752,227) (591,880)
TOTAL DISTRIBUTIONS (829,973) (698,706)
Share transactions Net 808,830 3,991,908
proceeds from sales of shares
Reinvestment of distributions 800,542 685,260
Cost of shares redeemed (2,228,837) (3,166,447)
NET INCREASE (DECREASE) IN (619,465) 1,510,721
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 773 2,051
TOTAL INCREASE (DECREASE) (1,858,687) 1,841,784
IN NET ASSETS
NET ASSETS
Beginning of period 10,515,094 8,673,310
End of period (including $ 8,656,407 $ 10,515,094
undistributed net investment
income (loss) of $(258) and
$70,720, respectively)
OTHER INFORMATION
Shares
Sold 36,830 153,618
Issued in reinvestment of 39,126 27,797
distributions
Redeemed (99,764) (119,111)
Net increase (decrease) (23,808) 62,304
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
1999
(UNAUDITED) 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 25.87 $ 25.20 $ 19.87 $ 19.25 $ 17.62 $ 17.19
period
Income from Investment
Operations
Net investment income .04 D .29 D .30 D .26 .20 .06
Net realized and (1.15) 2.24 6.93 1.83 3.57 2.15
unrealized gain (loss)
Total from investment (1.11) 2.53 7.23 2.09 3.77 2.21
operations
Less Distributions
From net investment income (.20) (.28) (.24) (.23) (.09) (.16)
From net realized gain (1.94) (1.58) (1.66) (1.24) (2.05) (1.62)
Total distributions (2.14) (1.86) (1.90) (1.47) (2.14) (1.78)
Redemption fees added to paid - - - - - -
in capital
Net asset value, end of $ 22.62 $ 25.87 $ 25.20 $ 19.87 $ 19.25 $ 17.62
period
TOTAL RETURN B, C (3.33)% 10.53% 39.45% 11.50% 23.81% 13.67%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 8,656 $ 10,515 $ 8,673 $ 4,019 $ 2,947 $ 2,167
millions)
Ratio of expenses to average 1.06% A .97% 1.02% 1.05% 1.12% 1.14%
net assets
Ratio of expenses to average 1.05% A, E .95% E 1.01% E 1.04% E 1.11% E 1.13% E
net assets after expense
reductions
Ratio of net investment .39% A 1.10% 1.36% 1.46% 1.31% .51%
income to average net assets
Portfolio turnover rate 29% A 47% 45% 79% 65% 54%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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, 1999 (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 require 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 with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. 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 foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. 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
U.S. federal income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The fund
may be subject to foreign taxes on income and gains on investments
which are accrued based upon the fund's understanding of the tax rules
and regulations that exist in the markets in which it invests. The
fund accrues such taxes as applicable. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
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 litigation proceeds, foreign currency transactions,
partnerships, futures transactions, passive foreign investment
companies (PFIC), non-taxable dividends and losses deferred due to
wash sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 90 days are subject to a short-term trading fee equal to 1.50% of
the proceeds of the redeemed shares. The fee, which is retained by the
fund, 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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,182,091,000 and $1,974,530,000, 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. The annual individual fund fee rate is .35%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annualized rate of .81% of average
net assets after the performance adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),
an affiliate of FMR and the general distributor of the fund, received
sales charges of $672,000 on sales of shares of the fund all of which
was retained.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (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 .23% 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 $307,000 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 $375,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $10,000 and $120,000, 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFC Cable Systems, Inc. $ 1,953 $ - $ - $ 30,985
ADAC Laboratories 3,565 - - 30,005
Adams Resources & Energy, Inc. 590 - 42 2,633
Advanced Digital Information - - - 17,562
Corp.
Aladdin Knowledge Systems Ltd. 724 - - 6,900
Alberto-Culver Co. Class A - 2,523 - -
Align-Rite International, 48 - - 6,048
Inc.
Allied Research Corp. 9 - - 3,370
American Safety Razor Co. 386 - - 11,719
AMRESCO Capital Trust, Inc. - - 210 5,053
Applebee's International, 4,909 - 182 45,463
Inc.
ARK Restaurants Corp. - - - 2,734
Arnold Industries, Inc. - 10,954 421 24,156
ASA Holdings, Inc. 2,889 4,396 347 49,063
Asahi Concrete Works Co. Ltd. - - - 2,474
Atlantic Tele-Network, Inc. - - 74 4,296
Autocam Corp. - 1,601 32 6,579
Australian Oil & Gas Corp, 171 - 147 4,357
Ltd.
Award Software International, 756 3,265 - -
Inc.
Aztec Manufacturing Co. - 308 - 3,815
BA Merchant Services, Inc. 11,682 - - 32,737
Class A
BMTC Group, Inc. Class A - - 44 5,691
(sub-vtg.)
BTU International, Inc. 8 - - 1,322
Bairnco Corp. - - 90 5,856
Ballard Medical Products 2,396 - 145 70,156
BancTec, Inc. - 31 - 22,751
Banyan Strategic Realty Trust - 309 221 4,366
(SBI)
Beazer Homes USA, Inc. 485 - - 11,553
Benchmarq Microelectronics, - 2,671 - -
Inc.
Benihana, Inc. 105 406 - 4,417
Benihana, Inc. Class A 220 - - 3,193
Bergensbanken ASA - - - 10,603
Black Box Corp. 38 - - 52,419
Blair Corp. 2,580 - 265 18,645
Boole & Babbage, Inc. 302 - - 46,683
Brampton Brick Ltd. Class A - - - -
Brookstone, Inc. - 145 - 10,657
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Bush Industries, Inc. Class A $ - $ - $ 100 $ 12,747
CPAC, Inc. - 73 46 3,301
Canadian Western Bank 1,510 - 159 13,460
Cannon Express, Inc. Class A - - - 1,716
Carr-Gottstein Foods Co. - - - 4,683
Castle Energy Corp. - - 123 6,642
Chase Corp. 101 - 87 3,700
Chase Industries, Inc. - 104 - 8,462
Chateau Stores Of Canada Ltd. - - 11 1,142
Class A
Chicos Fas, Inc. - 848 - -
Chromcraft Revington, Inc. 186 - - 9,027
Claire's Stores, Inc. 7,896 1,121 107 56,783
Cobra Electronics Corp. - 209 - 2,125
Cogeco, Inc. (sub-vtg.) - - 82 24,999
Cogeco Cable, Inc. - - 67 16,709
Cold Metal Products, Inc. - 674 - 1,104
Cole National Corp. Class A 78 - - 17,706
Columbus Energy Corp. - 815 - 2,123
Compdent Corp. 3,331 - - 13,147
Computer Learning Centers, - - - 8,981
Inc.
Concord Fabrics, Inc. Class A - 76 - 1,049
Concord Fabrics, Inc. Class B - - - 736
Conso Products Co. - - - 5,984
Consolidated Products, Inc. - 2,876 - -
Cook (D.C.) Holdings PLC - - 100 833
Corvel Corp. 1,343 - - 8,961
Cotton States Life Health 320 - 33 5,506
Insurance Co.
Crossman Communities, Inc. 604 - - 30,698
Crown Central Petroleum Corp. - 1,240 - 3,493
Class A
Cryolife, Inc. 920 - - 8,569
Cybex Corp. - 1,523 - 20,825
DSP Technology, Inc. - - - 1,555
DSG International Ltd. - 341 - 2,152
Dallas Semiconductor Corp. - 11,171 181 73,375
Decorator Industries, Inc. - - 53 3,000
Del Laboratories, Inc. 20 - 33 11,783
Desjardins-Laurentian Finance
Corp. Class A (sub-vtg.) - - 12 5,587
Dime Financial Corp. - - - -
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Diodes, Inc. $ 27 $ - $ - $ 2,835
Diversified Corporate - - - 1,447
Resources, Inc.
Dominion Homes, Inc. 342 - - 5,858
Drew Industries, Inc. 32 - - 14,361
Ducommun, Inc. - 547 - 15,611
Durakon Industries, Inc. - - - 8,310
Dyersburg Corp. - - 14 2,100
Elxsi Corp. - - - 2,860
Edusoft Ltd. - - - 3,658
ESC Medical Systems Ltd. 3,485 - - 13,802
Eltron International Inc. - - - -
Emerging Communications, Inc. - 5,653 - -
Elscint Ltd. 6,128 200 - 15,727
ENEX Resources Corp. - - - 649
Engineered Support Systems, - 402 6 4,873
Inc.
Engle Homes, Inc. 67 - 80 13,785
Equinox Systems, Inc. - 201 - 3,836
Equitrac Corp. 77 - - 6,884
FRM Nexus, Inc. - - - 294
FDP Corp. - - 14 8,758
Fansteel, Inc. - 506 - 4,600
Farm Family Holdings, Inc. - - - 17,072
Federal Screw Works - - 218 5,603
FIH AS Class B - - - -
Finlay Enterprises, Inc. 608 - - 6,410
Finish Line, Inc. Class A 2,977 - - 17,380
First BanCorp P R 8,788 601 391 77,431
First Central Financial Corp. - 2,811 - -
First Commonwealth, Inc. 427 - - 2,639
Flanigans Enterprises, Inc. - - 18 771
Footstar, Inc. - 1,620 - 37,969
Foremost Industries, Inc. - - - 814
Fossil, Inc. - 2,377 - 43,743
Friedmans, Inc. Class A 4,196 - - 16,376
GBC Bancorp 179 859 128 18,690
Gardner Denver Machinery, Inc. 236 699 - 12,561
Gehl Co. 402 - - 10,665
General Semiconductor, Inc. 1,249 - - 24,985
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Giant Cement Holding, Inc. $ - $ - $ - $ 10,568
Global Motorsport Group, Inc. - 6,016 - -
Goodfellow, Inc. - 200 23 1,763
Griffon Corp. 168 71 - 28,226
Gymboree Corp. - 1,200 - -
HPSC, Inc. - 224 - 2,237
Hallwood Consolidated 669 - - 3,110
Resources Corp.
Hampshire Group Ltd. - - - 3,820
Hardinge, Inc. - 564 - -
Healthcare Recoveries, Inc. 1,348 225 - 11,600
Helen Of Troy Corp. 73 - - 43,280
Herbalife International, Inc. - - 156 15,757
Class A
Hirsch International Corp. 200 - - 2,538
Class A
Holly Corp. 303 127 139 6,822
Homebase, Inc. - 163 - 13,241
Horizon Health Corp. 1,882 - - 4,022
Hurco Companies, Inc. 89 - - 1,623
Hyder PLC 3,896 - - 106,314
ICU Medical, Inc. 1,994 98 - 11,060
IHOP Corp. 1,555 - - 32,646
IDEX Corp. 21,168 4,608 669 53,952
Independence Federal Savings - - - 1,696
Bank
InfoUSA, Inc. Class B 1,063 104 - 11,538
InfoUSA, Inc. Class A 975 85 - 11,015
Intercontinental Life Corp. - - - 8,298
Intest Corp. 395 379 - 3,023
IPC Holdings Ltd. 2,160 - 1,581 55,156
JDA Software Group, Inc. 5,252 299 - 12,688
JLM Couture, Inc. - - - 499
Jean Coutu Group, Inc. Class A - 551 104 40,200
Jo-Ann Stores, Inc. Class A 2,146 723 - 8,291
Kaynar Technologies, Inc. - 3,727 - -
Kennedy-Wilson, Inc. - 96 - 4,071
Kenneth Cole Productions, 1,374 - - 15,928
Inc. Class A
King World Productions, Inc. 1,556 4,946 - -
Koss Corp. - - - 2,389
Kronos, Inc. 3,656 506 - 33,491
Lai Worldwide, Inc. 1,573 - - 4,177
Laboratory Specialists - 180 - -
America, Inc.
Lasalle Re Holdings Ltd. 1,091 - 1,681 27,800
Life USA Holding, Inc. - 896 99 22,576
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Logans Roadhouse, Inc. $ 474 $ - $ - $ 9,025
M/I Schottenstein Homes, Inc. - - 88 17,710
MMI Companies, Inc. - 122 224 23,715
MYR Group, Inc. - 512 35 5,750
Mark VII, Inc. 123 - - 8,534
Marten Transport Ltd. - - - 6,327
Martin Color-Fi, Inc. - 1,834 - -
Maynard Oil Co. 32 - - 2,316
Medstone International, Inc. - - - 4,349
Melita International Corp. 1,557 1,235 - 16,500
Mercury Air Group, Inc. - - - 5,129
Metro Richelieu, Inc. Class A 2,896 - 191 44,667
Micro Linear Corp. 110 - - 5,766
Microsemi Corp. 2,257 - - 14,812
Midwest Express Holdings, Inc. 2,862 644 - 27,086
Mikes Restaurants, Inc. - - - 361
Moffat Communications Ltd. 582 - 70 20,316
Monro Muffler Brake, Inc. - 105 - 4,800
Morton's Restaurant Group, - 241 - 6,366
Inc.
Movado Group, Inc. 624 - 31 19,905
Murakami Corp. - - 22 2,297
Mysoftware Co. - 294 - 3,344
NSC Corp. - - - 464
Nanometrics, Inc. - 64 - 6,988
Nagawa Co., Ltd. - - - 2,774
National Western Life
Insurance Co. Class A - - - 20,995
Natures Sunshine Products, 123 - 69 13,745
Inc.
Nautica Enterprises, Inc. 18,303 - - 56,700
Nordlandsbanken AS - - - 8,121
Norvestia OY Class B - 114 - -
OEC Medical Systems, Inc. - - - 35,831
Oakwood Homes Corp. 1,437 - 63 60,959
Octel Corp. - - - 19,596
Old Dominion Freight Lines, 114 179 - 5,825
Inc.
Orcad, Inc. - - - 3,398
Oriole Homes Corp. Class B - - - 588
Orthofix International NV 928 - - 14,837
P & F Industries, Inc. Class 680 - - 2,694
A
PXRE Corp. - - 370 14,818
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Patrick Industries, Inc. $ 68 $ - $ 47 $ 8,747
PAULA Financial 114 - 12 2,861
Pe Ben Oilfield Services Ltd. - - - 596
Performance Food Group Co. - 529 - -
Perry Group - - - 3,196
Petroleum Development Corp. 110 - - 4,944
Philadelphia Consolidated 1,560 - - 23,190
Holding Corp.
Phoenix Technologies Ltd. 267 - - 11,634
Piercing Pagoda, Inc. 89 - - 8,873
Pittston Co. (Brinks Group) 7,463 - 53 66,413
Pittston Co. (Burlington 697 - 186 18,300
Group)
Pomeroy Computer Resources, 526 - - 12,963
Inc.
Powell Industries, Inc. - 616 - 11,046
Primesource Corp. - 785 17 -
Programming & Systems, Inc. - - - -
Pubco Corp. - - - 3,035
Quest Diagnostics, Inc. 1,353 - - 38,519
Quest Education Corp. 1,754 - - 7,940
Quicks Group PLC - - - 5,628
Quixote Corp. - 754 81 6,920
RPC Energy Services, Inc. - 356 203 19,356
Rainbow Technologies, Inc. - 342 - 14,283
Raytech Corp. 4 - - 986
Redwood Trust, Inc. - - - 15,198
RehabCare Group, Inc. - - - 11,512
Remedy Corp. 2,197 - - 38,381
Realiability, Inc. 1,114 - - 2,851
Res-Care, Inc. 755 284 - 30,766
Respironics, Inc. 7,635 - - 31,749
Rex Stores Corp. 847 - - 7,178
Reynolds & Reynolds Co. Class 3,948 - 822 87,700
A
Richardsons Westgarth PLC 140 - 98 2,032
Richmont Mines, Ltd. 58 - - 2,012
Right Management Consultants, 118 - - 10,389
Inc.
Ringkjobing Bank - - - 2,981
Riviana Foods, Inc. 761 - 187 18,519
Robertson Ceco Corp. 299 - - 8,204
Ryan Hotels PLC - 799 48 4,012
S&K Famous Brands, Inc. - - - 4,750
SCPIE Holding, Inc. 86 3,182 83 18,665
SED International Holdings, - 780 - 4,500
Inc.
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
SPSS, Inc. $ 54 $ - $ - $ 17,392
Safeguard Health Enterprises, 371 - - 1,475
Inc.
San Francisco Boutiques, Inc.
Class B (sub-vtg.) - 196 - 861
Scan-Optics, Inc. - 576 - 1,912
Schultz Sav-O Stores, Inc. 82 - - 6,140
Seattle FilmWorks, Inc. 590 - - 6,336
Shelby Williams Industries, - 2,748 53 -
Inc.
Sonic Corp. - - - 48,859
Sound Advice, Inc. - - - 1,008
Southern Energy Homes, Inc. - - - 9,091
Southwestern Energy Co. 74 2,827 179 10,500
Speizman Industries, Inc. - - - 1,059
Sparebanken Rana 133 - - 688
Grunnfondsbevis
Standard Commercial Corp. - - 125 9,757
Stanley Furniture Co., Inc. 434 - - 14,199
Stanley Technology Group, Inc. - 163 - -
Steel of West Virginia, Inc. - 3,551 - -
Stephan Co. - - 17 4,416
Stewart Information Services - 3,082 - -
Corp.
Strattec Security Corp. 2,329 - - 14,476
Summit Holdings Southeast, - 3,262 - -
Inc.
Superior Energy Services, Inc. 432 - - 4,031
Supreme International Corp. 218 - - 7,246
Swift Energy Co. - - - 10,074
Sylvan, Inc. - 716 - 8,316
TBC Corp. - 344 - 11,873
TB Wood's Corp. - 473 70 4,420
Taitron Components, Inc. - - - 1,010
Class A
Talentum OY Class B - 93 - 17,096
Tandy Brands Accessories, Inc. 163 97 - 9,049
Tay Homes PLC - - 315 5,893
Tech-Sym Corp. 1,346 149 - 10,585
Terra Nova (Bermuda) Holdings
Ltd. Class A 5,781 - 191 43,088
Toami Corp. - - - 1,684
Tollgrade Communications, Inc. 2,285 - - 8,982
Transpro, Inc. - - 66 4,131
Twin Disc, Inc. - 481 114 5,200
UICI - 1,553 - 61,453
URS Corp. - 107 - 27,135
</TABLE>
6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
USEC, Inc. $ 4,248 $ 1,001 $ 2,358 $ 125,353
Uni-Select, Inc. - - 61 14,624
Unico American Corp. 57 - - 4,130
Unigraphics Solutions, Inc. - 196 - 10,395
Class A
United Dental Care, Inc. - 8,494 - -
Utah Medical Products, Inc. - - - 5,395
Valley Forge Corp. 20 1,461 41 -
Vertex Communications Corp. 18 - - 8,943
Video Display Corp. - - - 1,988
WSOY (Werner Soderstrom
Osakeyhtio) Class B - 981 - 49,035
Western Beef, Inc. - - - 3,070
Winsloew Furniture, Inc. - 1,349 - 16,293
Winston Resources, Inc. 58 - - 921
Wireless Telecom Group, Inc. 387 - - 3,731
World Fuel Services Corp. 366 - 125 14,061
Worldtex, Inc. - 1,992 - 2,938
Wynns International, Inc. - - 213 33,373
TOTALS $ 218,442 $ 139,807 $ 15,663 $ 3,761,618
</TABLE>
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
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
950 Northgate Drive
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1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
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COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
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265 Church Street
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300 Atlantic Street
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29 South Main Street
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DELAWARE
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FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
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4090 N. Ocean Boulevard
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1907 West State Road 434
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8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
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8065 Beneva Road
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1502 N. Westshore Blvd.
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GEORGIA
3445 Peachtree Road, N.E.
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1000 Abernathy Road
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ILLINOIS
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Chicago, IL
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1700 East Golf Road
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3232 Lake Avenue
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INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
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1 West Pennsylvania Ave.
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MASSACHUSETTS
470 Boylston Street
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155 Congress Street
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25 State Street
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300 Granite Street
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44 Mall Road
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416 Belmont Street
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280 North Woodward Ave.
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29155 Northwestern Hwy.
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7600 France Avenue South
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8885 Ladue Road
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150 Essex Street
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56 South Street
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501 Route 17, South
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350 Park Avenue
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28699 Chagrin Boulevard
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439 Fifth Avenue
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TEXAS
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1155 Dairy Ashford Street
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Houston, TX
400 East Las Colinas Blvd.
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14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
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VIRGINIA
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McLean, VA
WASHINGTON
411 108th Avenue, N.E.
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511 Pine Street
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WASHINGTON, DC
1900 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)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
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 500
Merrimack, NH 03054-0500
(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 500
Merrimack, NH 03054-0500
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
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Joel C. Tillinghast, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
LPS-SANN-0399 72339
1.700505.101
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
ContrafundSM
ContrafundSMII
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
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Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium Fund(registered trademark)
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuantSM Growth Fund
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(fidelity_logo_graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
FIDELITY
PURITAN(REGISTERED TRADEMARK)
FUND
SEMIANNUAL REPORT
JANUARY 31, 1999
(fidelity_logo_graphic)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 47 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 51 Notes to the financial
statements.
REPORT OF INDEPENDENT 55 The auditors' opinion.
ACCOUNTANTS
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
After the first month of 1999, U.S. stock markets seem to have
maintained their momentum from 1998, as the S&P 500, the Dow and
NASDAQ all reached record highs in January. The technology sector, and
Internet stocks in particular, were the main contributors. In the bond
markets, domestic securities continued to trade at historically low
yields, while positive economic news helped credit-sensitive sectors
outperform Treasury bonds.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PURITAN 6.34% 16.56% 96.09% 281.38%
Fidelity Balanced Composite 11.55% 22.91% 122.69% 308.14%
S&P 500 (registered trademark) 15.02% 32.49% 196.12% 462.78%
LB Aggregate Bond 5.10% 8.08% 41.16% 140.67%
Balanced Funds Average 7.39% 14.62% 90.24% 231.93%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Fidelity Balanced Composite Index, a hypothetical combination
of unmanaged indices. The composite index combines the total returns
of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate
Bond Index. 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 mutual funds with similar objectives
tracked by Lipper Inc. The past six months average represents a peer
group of 437 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PURITAN 16.56% 14.42% 14.32%
Fidelity Balanced Composite 22.91% 17.36% 15.10%
AVERAGE ANNUAL TOTAL RETURNS take the fund's 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 an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Puritan FID Balanced Composite
S&P 500 LB Aggregate Bond
00004 F0021
SP001 LB001
1989/01/31 10000.00 10000.00
10000.00 10000.00
1989/02/28 9910.38 9821.80
9751.00 9928.00
1989/03/31 10090.41 9976.00
9978.20 9970.69
1989/04/30 10431.56 10370.05
10496.07 10179.08
1989/05/31 10780.29 10731.14
10921.16 10446.79
1989/06/30 10855.67 10824.93
10858.91 10764.37
1989/07/31 11455.34 11503.65
11839.47 10993.65
1989/08/31 11532.23 11570.83
12071.52 10830.94
1989/09/30 11405.08 11565.97
12022.03 10886.18
1989/10/31 11064.04 11518.79
11743.12 11153.98
1989/11/30 11270.25 11703.55
11982.68 11259.95
1989/12/31 11397.15 11884.72
12270.26 11290.35
1990/01/31 10914.65 11349.67
11446.92 11155.99
1990/02/28 11031.11 11452.04
11594.59 11191.69
1990/03/31 11046.99 11637.34
11901.85 11199.53
1990/04/30 10776.73 11419.95
11604.30 11096.49
1990/05/31 11376.37 12223.23
12735.72 11424.95
1990/06/30 11315.48 12252.08
12649.12 11608.89
1990/07/31 11212.61 12296.18
12608.64 11769.09
1990/08/31 10535.40 11563.33
11468.82 11611.38
1990/09/30 10046.20 11263.84
10910.29 11707.76
1990/10/31 9871.94 11292.00
10863.37 11856.45
1990/11/30 10429.57 11826.79
11565.15 12111.36
1990/12/31 10673.40 12098.57
11887.81 12300.30
1991/01/31 11151.71 12475.08
12406.12 12452.82
1991/02/28 11798.31 13052.67
13293.16 12558.67
1991/03/31 11876.70 13278.22
13614.86 12645.33
1991/04/30 11975.60 13354.71
13647.53 12781.90
1991/05/31 12559.99 13731.84
14237.10 12856.03
1991/06/30 12124.21 13351.75
13585.05 12849.60
1991/07/31 12543.86 13799.30
14218.11 13028.21
1991/08/31 12762.81 14114.75
14555.08 13309.62
1991/09/30 12773.53 14087.93
14312.01 13579.81
1991/10/31 12958.65 14263.75
14503.79 13730.54
1991/11/30 12514.36 13971.34
13919.29 13856.86
1991/12/31 13283.73 15096.31
15511.65 14268.41
1992/01/31 13396.47 14845.71
15223.14 14074.36
1992/02/29 13772.24 15000.11
15421.04 14165.85
1992/03/31 13704.93 14791.01
15120.33 14086.52
1992/04/30 14152.55 15094.52
15564.86 14187.94
1992/05/31 14314.46 15253.01
15641.13 14456.09
1992/06/30 14237.34 15200.85
15408.08 14655.59
1992/07/31 14671.12 15697.91
16038.27 14954.56
1992/08/31 14526.53 15568.25
15709.48 15105.60
1992/09/30 14703.65 15752.58
15894.86 15285.36
1992/10/31 14592.64 15701.85
15950.49 15082.06
1992/11/30 14986.22 16024.37
16494.40 15085.08
1992/12/31 15333.07 16244.54
16697.28 15324.93
1993/01/31 15769.97 16451.18
16837.54 15619.17
1993/02/28 16092.44 16700.58
17066.53 15892.51
1993/03/31 16728.77 16940.06
17426.63 15959.25
1993/04/30 17044.40 16741.52
17004.91 16070.97
1993/05/31 17275.87 17019.43
17460.64 16091.86
1993/06/30 17392.77 17172.27
17511.28 16383.12
1993/07/31 17648.08 17170.21
17441.23 16476.51
1993/08/31 18158.69 17680.85
18102.25 16764.85
1993/09/30 18033.70 17618.26
17962.87 16810.11
1993/10/31 18502.55 17863.15
18334.70 16872.31
1993/11/30 18205.23 17700.60
18160.52 16728.89
1993/12/31 18621.56 17867.34
18380.26 16819.23
1994/01/31 19449.18 18328.31
19005.19 17046.29
1994/02/28 19236.37 17902.73
18490.15 16749.68
1994/03/31 18520.37 17257.52
17683.98 16335.97
1994/04/30 18723.24 17334.83
17910.33 16205.28
1994/05/31 18842.57 17504.71
18204.06 16203.66
1994/06/30 18696.72 17231.99
17758.06 16168.01
1994/07/31 19165.94 17708.28
18340.53 16489.75
1994/08/31 19731.42 18152.40
19092.49 16509.54
1994/09/30 19305.98 17778.83
18624.72 16266.85
1994/10/31 19532.37 18012.44
19043.78 16252.21
1994/11/30 18916.08 17602.98
18350.20 16216.46
1994/12/31 18953.81 17808.20
18622.34 16328.35
1995/01/31 18864.23 18226.30
19105.22 16651.65
1995/02/28 19440.14 18825.98
19849.75 17047.96
1995/03/31 19891.32 19205.25
20435.51 17151.95
1995/04/30 20291.21 19652.16
21037.34 17392.08
1995/05/31 20729.80 20427.67
21878.20 18065.15
1995/06/30 20962.64 20772.04
22386.43 18197.03
1995/07/31 21663.56 21167.04
23128.76 18157.00
1995/08/31 21767.40 21301.37
23186.82 18376.70
1995/09/30 22079.27 21923.37
24165.30 18554.95
1995/10/31 21724.00 21990.41
24079.03 18796.16
1995/11/30 22500.33 22701.58
25136.10 19078.11
1995/12/31 23021.39 23091.04
25620.22 19345.20
1996/01/31 23346.21 23623.62
26492.33 19472.88
1996/02/29 23643.96 23590.59
26737.92 19134.05
1996/03/31 24037.56 23660.84
26995.40 19000.11
1996/04/30 24051.18 23817.10
27393.32 18893.71
1996/05/31 24201.08 24166.59
28099.79 18855.92
1996/06/30 24310.83 24351.37
28206.85 19108.59
1996/07/31 23843.32 23732.16
26960.67 19160.19
1996/08/31 24063.32 24016.33
27529.27 19127.61
1996/09/30 25017.72 24994.47
29078.62 19460.44
1996/10/31 25624.95 25630.03
29880.61 19892.46
1996/11/30 26915.31 26967.76
32139.28 20232.62
1996/12/31 26510.14 26546.90
31502.60 20044.45
1997/01/31 27417.39 27575.01
33470.89 20106.59
1997/02/28 27832.58 27732.30
33733.30 20156.86
1997/03/31 26901.46 26925.46
32347.20 19933.12
1997/04/30 28002.96 28051.48
34278.32 20232.11
1997/05/31 29135.49 29182.74
36365.19 20424.32
1997/06/30 30220.07 30106.08
37994.35 20667.37
1997/07/31 31862.46 31868.55
41017.56 21225.39
1997/08/31 30454.70 30689.03
38719.76 21044.97
1997/09/30 31680.83 31879.21
40840.44 21356.44
1997/10/31 31032.30 31425.25
39476.37 21666.11
1997/11/30 31778.11 32355.88
41303.73 21765.77
1997/12/31 32435.02 32819.93
42012.91 21985.60
1998/01/31 32719.53 33205.76
42477.58 22267.02
1998/02/28 33991.49 34632.01
45541.06 22249.21
1998/03/31 35052.22 35743.22
47873.22 22324.85
1998/04/30 35254.63 36033.31
48354.82 22440.94
1998/05/31 35204.03 35798.59
47523.60 22654.13
1998/06/30 35948.14 36792.79
49454.01 22846.69
1998/07/31 35863.12 36588.59
48927.32 22894.67
1998/08/31 32343.13 33653.16
41853.41 23267.85
1998/09/30 33552.55 35261.64
44534.54 23812.32
1998/10/31 35199.64 36907.80
48156.98 23686.12
1998/11/30 36569.13 38334.14
51075.78 23821.13
1998/12/31 37817.46 39705.43
54018.76 23892.59
1999/01/29 38137.79 40814.48
56277.83 24067.00
IMATRL PRASUN SHR__CHT 19990131 19990305 093431 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Puritan Fund on January 31, 1989. As the chart
shows, by January 31, 1999, the value of the investment would have
grown to $38,138 - a 281.38% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index, a market
capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard &
Poor's Index would have grown to $56,278 - a 462.78% increase. If
$10,000 was invested in the Lehman Brothers Aggregate Bond Index, it
would have grown to $24,067 - a 140.67% increase. You can also look at
how the Fidelity Balanced Composite Index did over the same period.
The composite index combines the total returns of the Standard &
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index
(40%). With dividends and interest, if any, reinvested, the same
$10,000 would have grown to $40,814 - a 308.14% increase.
(checkmark)UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Extreme volatility was no stranger
to the U.S. stock and bond markets
during the six-month period ending
January 31, 1999. In contrast, the
U.S. economy was relatively tranquil,
as the trend of low inflation, low
unemployment and low interest
rates continued. The international
scene was another story. Economic
uncertainty abroad, particularly in
Asia and Russia, plagued the U.S.
stock markets. Then, when Russia
announced a one-two punch of
loan defaults and currency
devaluation, equity investors'
confidence hit the mat. Investors
fled the equity markets in droves,
searching for safer, less volatile
havens - particularly U.S.
Treasuries. After the near-collapse of
a major U.S. hedge fund, the U.S.
Federal Reserve Board waded in
with three cuts in key interest rates,
which boosted equity market
confidence and restored some
measure of liquidity to the
fixed-income markets. Despite some
instances of profit-taking in
technology issues and concerns
over Brazil's currency devaluation
in the first month of 1999, the
Standard and Poor's 500 Index,
Dow Jones Industrial Average and
NASDAQ all reached record highs
in January. Overall, the S&P 500(Registered trademark)
index- a popular measure of U.S.
stock market performance -
returned 15.02% for the six-month
period. Meanwhile, the Lehman
Brothers Aggregate Bond Index -
a broad measure of the U.S.
taxable investment-grade bond
market - returned 5.10%.
(photograph of Bettina Doulton)
An interview with Bettina Doulton, Portfolio Manager of Fidelity
Puritan Fund
Q. HOW DID THE FUND PERFORM, BETTINA?
A. For the six months that ended January 31, 1999, the fund returned
6.34%. This lagged the 15.02% return of the Standard & Poor's 500
Index, but topped the Lehman Brothers Aggregate Bond Index, which
returned 5.10% during the period. Given the fund's mix of equities and
bonds, performance typically falls between the S&P 500 and Lehman
Brothers indexes. The fund's six-month return trailed that of the
balanced funds average, which returned 7.39% according to Lipper Inc.
For the 12 months that ended January 31, 1999, the fund returned
16.56%, which exceeded the Lipper peer group's return of 14.62%. The
S&P 500 and Lehman Brothers indexes returned 32.49% and 8.08%,
respectively, during the same period.
Q. WHAT FACTORS CONTRIBUTED POSITIVELY TO THE FUND'S PERFORMANCE
DURING THE PERIOD?
A. The fund benefited from its focus on industry-leading companies
that had growing market share and improving financial returns. The
fund's stock selection within certain sectors was also strong,
particularly among its media and leisure-related investments. Time
Warner, for instance, experienced exceptional returns during the past
six months.
Q. WHY DID THE FUND'S PERFORMANCE LAG THAT OF ITS LIPPER PEER GROUP
OVER THE PAST SIX MONTHS?
A. The fund lagged the Lipper group primarily because of relative
portfolio construction. Puritan's equity sub-portfolio, managed in an
equity income style, was at an inherent disadvantage to competitors
who invested in growth stocks. Given Puritan's income-oriented
investment approach, it was difficult to own index weights in
low-yielding, high P/E growth stocks such as Microsoft, Dell Computer
and Lucent Technologies. These stocks were market leaders during the
past six and 12 months. In addition, Puritan's high-grade fixed-income
sub-portfolio, which maintained overweightings in corporate and
mortgage debt, also did not measure up well against competitors'
government bond holdings. Finally, having exposure - though it was
relatively small - to the poorly performing high-yield market during
the period proved to be detrimental since most of the fund's
competitors have minimal high-yield holdings.
Q. MARKET VOLATILITY WAS QUITE HIGH DURING THE PERIOD. WHAT STRATEGIES
DID YOU FOLLOW IN TRYING TO STEER THE FUND THROUGH THIS VOLATILITY?
A. In fact, market volatility, as measured by intraday moves by the
S&P 500, was at levels not experienced in more than fifteen years.
Amidst this erratic environment, I kept Puritan's stock selection
focused on companies that offered both fair valuations and reasonable
dividend yields, in an effort to keep the fund's relative volatility
consistent with the fund's balanced investment mandate. Importantly, I
remain committed to a long-term investment discipline, with the intent
of owning individual positions for two to three years.
Q. HOW DID THE BOND PORTION OF THE FUND'S PORTFOLIO PERFORM DURING THE
PERIOD?
A. While some of the fund's bond holdings were negatively affected by
a massive rotation to safer U.S. Treasury securities following
Russia's default early in the period, the fund opportunistically
upgraded its holdings in the corporate and mortgage-backed sectors.
When the fixed-income market settled down in the second half of the
period, many of those purchases did quite well, handily outperforming
Treasuries. Barring further negative surprises from the emerging
markets, spreads - or the difference in yield between Treasuries and
other fixed-income securities - for corporate and mortgage issues
could continue to narrow during the rest of 1999. This would be good
news for the fund's investors.
Q. WHICH INDIVIDUAL STOCKS PERFORMED WELL? WHICH TURNED OUT TO BE
DISAPPOINTING?
A. The fund's position in AT&T - its third-largest holding at the end
of the period - performed well as telecommunications companies
benefited from the demand for better voice, data and Internet-related
services. AT&T's own restructuring and repositioning efforts also
began to drive results. In terms of disappointments,
telecommunications company Alcatel declined after it failed to meet
consensus earnings expectations. Alcatel's restructuring actions were
not enough to overcome a more competitive marketplace and a more
challenging global economic environment. In addition, while Philip
Morris had a positive return for the period, the stock was somewhat of
a disappointment as it remained under the cloud of ongoing litigation.
Q. WHAT'S YOUR OUTLOOK?
A. I am fairly optimistic that the monetary policy easings by the U.S.
Federal Reserve Bank over the past six months will be sufficient to
sustain domestic economic growth - specifically consumer spending -
and that related liquidity will support the financial markets. Given
continued economic weakness in the emerging markets, I see limited
inflation risk that would require tighter monetary policies. I fear
that the heightened levels of market volatility will persist as
investors react to domestic economic news and global economic
developments.
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.
(checkmark)FUND FACTS
GOAL: high income with
preservation of capital. The
fund also considers the
potential for growth of
capital.
FUND NUMBER: 004
TRADING SYMBOL: FPURX
START DATE: April 16, 1947
SIZE: as of January 31,
1999, more than $26.0
billion
MANAGER: Bettina Doulton,
since 1996; manager,
Fidelity Equity-Income II Fund,
since 1996; Fidelity Value
Fund, 1995-1996; Fidelity
Select Automotive Portfolio,
1993; joined Fidelity in
1986
BETTINA DOULTON
ON TECHNOLOGY:
"Like the Industrial Revolution,
technology - and more specifically
its application - is changing the
business model now. As CS First
Boston wrote recently, `. . . the
economy is moving away from
industries where physical capital or
resources are the foundation for
competitive advantage toward
businesses where knowledge, or
intellectual capital, is the driver of
advantage.' The ability to optimize
technology - be it in accelerating
R&D cycles, retail distribution or
business-to-business applications
such as payment systems or
inventory management - will be
critical to achieving success in this
type of environment. The winners will
be those companies that best
leverage their intellectual capital,
and the associated low physical
capital investment, into higher
sustainable financial returns. The
losers will be those companies
unable to adapt an existing fixed
asset base to the new model. While
Puritan's equity income approach to
stock selection precludes
investments in the large-cap
technology trailblazers, the
industries in which the fund typically
traffics will be affected, some
positively and others negatively.
Within all industries, the valuation
gap between those companies
improving their returns and
competitive position by optimizing
technology, and those who are not,
is expected to widen. I will look to
invest in companies that appear to
be positioning themselves to win in
this new economy, and will only
invest selectively in others if
valuations are overwhelmingly
compelling."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF JANUARY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
General Electric Co. 3.5 3.0
Chase Manhattan Corp. 2.5 1.8
AT&T Corp. 2.1 1.4
Citigroup, Inc. 2.1 3.6
American Express Co. 2.1 1.8
TOP FIVE BOND ISSUERS AS OF
JANUARY 31, 1999
(WITH MATURITIES MORE THAN % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
ONE YEAR) THESE BOND ISSUERS 6 MONTHS
AGO
Fannie Mae 7.7 7.3
U.S. Treasury 2.8 2.8
Government National Mortgage 1.6 2.0
Association
Raytheon Co. 0.4 0.4
TCI Communications, Inc. 0.4 0.5
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 19.4 23.8
UTILITIES 10.8 8.0
MEDIA & LEISURE 7.9 5.4
HEALTH 7.2 7.8
NONDURABLES 6.8 6.4
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF JANUARY 31, 1999 *
Stocks 64.4%
Bonds 31.9%
Convertible
securities 0.8%
Short-term
investments 2.9%
*FOREIGN
INVESTMENTS 6.8%
Row: 1, Col: 1, Value: 64.4
Row: 1, Col: 2, Value: 31.9
Row: 1, Col: 3, Value: 0.8
Row: 1, Col: 4, Value: 2.9
AS OF JULY 31, 1998 **
Stocks 62.0%
Bonds 34.4%
Convertible
securities 0.7%
Short-term
investments 2.9%
**FOREIGN
INVESTMENTS 8.2%
Row: 1, Col: 1, Value: 62.0
Row: 1, Col: 2, Value: 34.4
Row: 1, Col: 3, Value: 0.7
Row: 1, Col: 4, Value: 2.9
INVESTMENTS JANUARY 31, 1999
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 63.3%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 1.6%
AEROSPACE & DEFENSE - 1.0%
AlliedSignal, Inc. 964,100 $ 37,600
Textron, Inc. 2,322,800 172,903
United Technologies Corp. 517,700 61,833
272,336
SHIP BUILDING & REPAIR - 0.6%
General Dynamics Corp. 2,652,700 154,188
TOTAL AEROSPACE & DEFENSE 426,524
BASIC INDUSTRIES - 1.2%
CHEMICALS & PLASTICS - 0.4%
du Pont (E.I.) de Nemours & 1,179,200 60,360
Co.
Praxair, Inc. 1,474,600 47,648
108,008
IRON & STEEL - 0.0%
Nucor Corp. 34,900 1,710
METALS & MINING - 0.8%
Alcoa, Inc. 2,454,000 205,216
TOTAL BASIC INDUSTRIES 314,934
CONSTRUCTION & REAL ESTATE -
0.6%
BUILDING MATERIALS - 0.5%
Masco Corp. 3,349,700 108,237
Sherwin-Williams Co. 979,100 25,089
133,326
REAL ESTATE INVESTMENT TRUSTS
- - 0.1%
Boston Properties, Inc. 199,900 6,497
Equity Residential Properties 353,500 14,383
Trust (SBI)
Simon Property Group, Inc. 256,100 6,739
27,619
TOTAL CONSTRUCTION & REAL 160,945
ESTATE
DURABLES - 1.3%
AUTOS, TIRES, & ACCESSORIES -
0.7%
Danaher Corp. 340,600 18,222
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Federal-Mogul Corp. 118,900 $ 7,045
Ford Motor Co. 2,546,000 156,420
181,687
CONSUMER DURABLES - 0.1%
Minnesota Mining & 282,600 21,937
Manufacturing Co.
CONSUMER ELECTRONICS - 0.5%
Black & Decker Corp. 2,283,960 121,050
TOTAL DURABLES 324,674
ENERGY - 4.1%
ENERGY SERVICES - 0.5%
Halliburton Co. 2,274,400 67,521
Schlumberger Ltd. 1,128,200 53,731
121,252
OIL & GAS - 3.6%
BP Amoco PLC 9,387,071 126,922
BP Amoco PLC sponsored ADR 3,681,082 298,628
Burlington Resources, Inc. 551,500 16,683
Chevron Corp. 359,900 26,903
Exxon Corp. 3,729,600 262,704
Royal Dutch Petroleum Co. 592,800 23,749
(Hague Registry)
Texaco, Inc. 1,604,200 75,999
Total SA:
Class B 165,700 16,964
sponsored ADR 468,500 23,981
USX-Marathon Group 3,157,300 71,829
944,362
TOTAL ENERGY 1,065,614
FINANCE - 14.6%
BANKS - 3.6%
Bank of New York Co., Inc. 2,151,400 76,375
Bank One Corp. 393,500 20,610
Chase Manhattan Corp. 8,651,800 665,648
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
U.S. Bancorp 3,525,700 $ 118,772
Wells Fargo & Co. 1,549,300 54,129
935,534
CREDIT & OTHER FINANCE - 5.5%
American Express Co. 5,303,827 545,631
Associates First Capital 6,104,610 247,618
Corp. Class A
Citigroup, Inc. 9,805,749 549,735
Household International, Inc. 2,404,601 105,652
Olympic Financial Ltd. 361 2
warrants 3/15/07 (a)
1,448,638
FEDERAL SPONSORED CREDIT - 3.8%
Fannie Mae 6,253,650 455,735
Freddie Mac 8,645,100 535,996
991,731
INSURANCE - 1.6%
Allstate Corp. 830,144 31,182
American International Group, 1,625,400 167,315
Inc.
Chubb Corp. (The) 418,000 24,558
Hartford Financial Services 3,465,300 179,979
Group, Inc.
MBIA, Inc. 80,600 5,284
408,318
SECURITIES INDUSTRY - 0.1%
ECM Corp. LP (e) 6,318 556
Morgan Stanley, Dean Witter & 320,500 27,823
Co.
28,379
TOTAL FINANCE 3,812,600
HEALTH - 7.0%
DRUGS & PHARMACEUTICALS - 5.7%
American Home Products Corp. 800,100 46,956
Bristol-Myers Squibb Co. 2,991,300 383,447
Lilly (Eli) & Co. 2,979,900 279,179
Merck & Co., Inc. 3,513,100 515,547
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS -
CONTINUED
Schering-Plough Corp. 2,991,700 $ 163,048
Warner-Lambert Co. 1,385,900 100,045
1,488,222
MEDICAL EQUIPMENT & SUPPLIES
- - 1.3%
Baxter International, Inc. 1,066,300 75,641
Becton, Dickinson & Co. 4,199,430 150,130
Johnson & Johnson 1,209,900 102,842
328,613
TOTAL HEALTH 1,816,835
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.7%
ELECTRICAL EQUIPMENT - 4.0%
Ampex Corp. Class A (a) 110,662 491
Emerson Electric Co. 1,754,700 102,102
General Electric Co. 8,550,900 896,776
Honeywell, Inc. 534,000 34,810
1,034,179
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.7%
Cooper Industries, Inc. 234,304 9,709
Illinois Tool Works, Inc. 938,800 56,621
Ingersoll-Rand Co. 791,700 37,606
Tyco International Ltd. 4,357,582 335,806
439,742
TOTAL INDUSTRIAL MACHINERY & 1,473,921
EQUIPMENT
MEDIA & LEISURE - 4.0%
BROADCASTING - 2.0%
Benedek Communications Corp. 51,900 104
warrants 7/1/07 (a)
CBS Corp. 3,813,000 129,642
Comcast Corp. Class A 924,500 62,852
(special)
Cox Communications, Inc. 181,100 13,017
Class A (a)
CS Wireless Systems, Inc. 911 -
(a)(e)
MediaOne Group, Inc. 788,700 44,216
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
NTL, Inc. warrants 12/31/08 16,463 $ 247
(a)
Teletrac Holdings, Inc. 2,910 1
warrants 8/1/07 (a)
Time Warner, Inc. 4,464,961 279,060
UIH Australia/Pacific, Inc. 26,110 26
warrants 5/15/06 (a)
529,165
ENTERTAINMENT - 1.0%
Alliance Gaming Corp. (a)(g) 10,652 16
Cedar Fair LP (depository 300,000 7,350
unit)
Disney (Walt) Co. 1,150,000 37,950
Fox Entertainment Group, Inc. 559,000 15,582
(a)
News Corp. Ltd. ADR 1,256,000 37,052
Viacom, Inc. Class B 1,962,500 166,813
(non-vtg.) (a)
264,763
LODGING & GAMING - 0.0%
Motels of America, Inc. (a) 3,000 63
PUBLISHING - 0.5%
McGraw-Hill Companies, Inc. 1,193,800 129,080
RESTAURANTS - 0.5%
McDonald's Corp. 1,607,100 126,660
TOTAL MEDIA & LEISURE 1,049,731
NONDURABLES - 6.2%
BEVERAGES - 0.5%
Anheuser-Busch Companies, 1,459,500 103,168
Inc.
Brown-Forman Corp. Class B 368,900 26,630
129,798
FOODS - 1.3%
Bestfoods 700,000 35,219
ConAgra, Inc. 1,133,700 36,845
Dean Foods Co. 1,149,100 44,815
Flowers Industries, Inc. 2,521,800 60,681
Heinz (H.J.) Co. 1,727,500 97,280
Nabisco Holdings Corp. Class A 278,800 11,727
Sara Lee Corp. 2,056,800 52,448
339,015
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 2.7%
Avon Products, Inc. 3,677,200 $ 135,827
Clorox Co. 516,609 64,641
Procter & Gamble Co. 561,800 51,054
Renaissance Cosmetics, Inc. 10,000 -
warrants 8/31/06 (a)(e)
Unilever NV (NY shares) 5,059,400 387,044
Unilever PLC 7,891,500 80,148
718,714
TOBACCO - 1.7%
Philip Morris Companies, Inc. 9,227,040 433,671
TOTAL NONDURABLES 1,621,198
RETAIL & WHOLESALE - 3.0%
APPAREL STORES - 0.0%
Mothers Work, Inc. (a)(g) 2,416 29
DRUG STORES - 0.1%
Rite Aid Corp. 671,200 32,973
GENERAL MERCHANDISE STORES -
1.7%
Dayton Hudson Corp. 2,475,400 157,807
Nordstrom, Inc. 1,527,300 63,574
Saks, Inc. (a) 1,855,060 68,289
Wal-Mart Stores, Inc. 1,794,100 154,293
443,963
GROCERY STORES - 0.9%
Albertson's, Inc. 328,400 20,032
American Stores Co. 439,500 15,932
Kroger Co. (a) 1,000,000 63,500
Meyer (Fred), Inc. (a) 2,251,600 140,725
240,189
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.3%
Home Depot, Inc. 1,202,900 72,625
TOTAL RETAIL & WHOLESALE 789,779
SERVICES - 0.6%
PRINTING - 0.4%
Donnelley (R.R.) & Sons Co. 3,030,900 114,227
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - 0.2%
ServiceMaster Co. 1,995,750 $ 38,044
TOTAL SERVICES 152,271
TECHNOLOGY - 5.2%
COMPUTER SERVICES & SOFTWARE
- - 0.0%
Concentric Network Corp. 3,530 494
warrants 12/15/07 (a)(e)
COMPUTERS & OFFICE EQUIPMENT
- - 4.4%
Compaq Computer Corp. 650,000 30,956
International Business 1,665,700 305,240
Machines Corp.
Pitney Bowes, Inc. 6,730,180 463,121
Xerox Corp. 2,813,600 348,886
1,148,203
ELECTRONICS - 0.8%
Motorola, Inc. 1,481,100 107,009
Texas Instruments, Inc. 992,900 98,173
205,182
TOTAL TECHNOLOGY 1,353,879
TRANSPORTATION - 0.7%
RAILROADS - 0.7%
Burlington Northern Santa Fe 3,614,000 125,135
Corp.
CSX Corp. 388,300 15,629
Union Pacific Corp. 807,500 41,536
182,300
UTILITIES - 7.5%
CELLULAR - 0.0%
American Mobile Satellite 2,990 7
Corp. warrants 4/1/08 (a)(e)
Loral Orion Network Systems, 41,555 364
Inc. warrants 1/15/07 (CV
ratio .47) (a)
Loral Orion Network Systems, 8,090 93
Inc. warrants 1/15/07 (CV
ratio .6) (a)
McCaw International Ltd. 40,960 205
warrants 4/15/07 (a)(e)
Microcell Telecommunications, 110,880 1,896
Inc. warrants 6/1/06 (a)(e)
Orbital Imaging Corp. 1,120 22
warrants 3/1/05 (a)(e)
2,587
ELECTRIC UTILITY - 1.2%
CMS Energy Corp. 1,616,800 69,219
Duke Energy Corp. 2,026,596 125,269
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Entergy Corp. 517,700 $ 15,240
FPL Group, Inc. 482,400 26,472
PG&E Corp. 1,870,400 59,736
295,936
GAS - 0.3%
Enron Corp. 1,305,900 86,189
TELEPHONE SERVICES - 6.0%
ALLTEL Corp. 1,758,300 113,520
Ameritech Corp. 1,551,600 101,048
AT&T Corp. 6,090,100 552,677
BellSouth Corp. 2,812,400 125,503
Covad Communications Group, 12,430 8,788
Inc. warrants 3/15/08 (a)(e)
DTI Holdings, Inc. warrants 41,950 2
3/1/08 (a)(e)
Firstworld Communications, 6,340 63
Inc. warrants 4/15/08 (a)(e)
GTE Corp. 2,783,600 187,893
KMC Telecom Holdings, Inc. 5,620 14
warrants 4/15/08 (a)(e)
MCI WorldCom, Inc. (a) 2,300,000 183,425
Optel Communications Corp. 1,706,343 17
warrants 12/29/04 (a)(g)
Pathnet, Inc. warrants 4,910 49
4/15/08 (a)(e)
Rhythms Netconnections, Inc. 56,650 1,133
warrants 5/15/08 (a)(e)
SBC Communications, Inc. 3,939,500 212,733
Tele Danmark AS Class B 413,000 55,526
U.S. WEST, Inc. 300,000 18,506
1,560,897
TOTAL UTILITIES 1,945,609
TOTAL COMMON STOCKS 16,490,814
(Cost $11,242,044)
PREFERRED STOCKS - 1.6%
CONVERTIBLE PREFERRED STOCKS
- - 0.5%
FINANCE - 0.0%
CREDIT & OTHER FINANCE - 0.0%
Federal-Mogul Financing Trust 124,500 8,264
$3.50
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONVERTIBLE PREFERRED STOCKS
- - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Ampex Corp. 8% non-cumulative 369 $ 576
(a)
Loral Space & Communications 275,000 16,638
Ltd. Series C, $3.00 (e)
17,214
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.0%
Ingersoll Rand Co./Ingersoll 30,800 758
Rand Finance $1.68 Income
PRIDES
TOTAL INDUSTRIAL MACHINERY & 17,972
EQUIPMENT
MEDIA & LEISURE - 0.4%
BROADCASTING - 0.3%
MediaOne Group, Inc. $3.63 1,045,200 85,968
PIES
LODGING & GAMING - 0.1%
Host Marriott Financial Trust 534,900 21,129
$3.375 QUIPS (e)
TOTAL MEDIA & LEISURE 107,097
TOTAL CONVERTIBLE PREFERRED 133,333
STOCKS
NONCONVERTIBLE PREFERRED
STOCKS - 1.1%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Fresenius Medical Care 14,190 14,463
Capital Trust II 7.875%
INSURANCE - 0.0%
American Annuity Group 6,030 6,229
Capital Trust II 8.75%
TOTAL FINANCE 20,692
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp. 8% non-cumulative 807 1,259
(a)
MEDIA & LEISURE - 0.4%
BROADCASTING - 0.3%
Adelphia Communications Corp. 38,030 4,411
$13.00
Citadel Broadcasting Co. 56,687 6,604
Series B, 13.25% pay-in-kind
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
CSC Holdings, Inc.:
11.125% pay-in-kind 276,649 $ 31,953
Series H, 11.75% pay-in-kind 143,719 16,851
(a)
Granite Broadcasting Corp. 6,398 5,854
12.75% pay-in-kind
65,673
PUBLISHING - 0.1%
PRIMEDIA, Inc.:
8.625% 74,220 7,162
Series D, $10.00 161,300 16,614
23,776
TOTAL MEDIA & LEISURE 89,449
NONDURABLES - 0.0%
HOUSEHOLD PRODUCTS - 0.0%
Renaissance Cosmetics, Inc. 12,774 19
14% pay-in-kind
TECHNOLOGY - 0.1%
COMMUNICATIONS EQUIPMENT - 0.1%
Intermedia Communications, 30,362 30,666
Inc. 13.5% pay-in-kind (a)
COMPUTER SERVICES & SOFTWARE
- - 0.0%
Concentric Network Corp. 5,369 4,778
13.5% pay-in-kind (a)
TOTAL TECHNOLOGY 35,444
UTILITIES - 0.5%
CELLULAR - 0.2%
Nextel Communications, Inc.:
11.125% pay-in-kind 33,495 32,155
Series D, 13% pay-in-kind 23,023 24,174
56,329
ELECTRIC UTILITY - 0.0%
Entergy Gulf States, Inc. 32,305 3,231
Series A, adj. rate
TELEPHONE SERVICES - 0.3%
e.spire Communications, Inc.:
$127.50 pay-in-kind 8,292 2,736
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
e.spire Communications, Inc.:
- - continued
14.75% pay-in-kind 2,506 $ 1,629
Hyperion Telecommunication, 12,174 9,861
Inc. 12.875% pay-in-kind
ICG Holdings, Inc.:
14% pay-in-kind (a) 145 141
14.25% pay-in-kind 19,755 19,261
IXC Communications, Inc. 10,087 9,709
12.5% pay-in-kind
NEXTLINK Communications, Inc. 580,328 28,726
14% pay-in-kind
Viatel, Inc. 10% pay-in-kind 48 6
(a)(e)
WinStar Communications, Inc. 5,509 4,132
14.25% (a)
76,201
TOTAL UTILITIES 135,761
TOTAL NONCONVERTIBLE 282,624
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 415,957
(Cost $425,157)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 16.8%
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 0.3%
MEDIA & LEISURE - 0.2%
PUBLISHING - 0.2%
News America Holdings, Inc. Baa3 $ 73,530 46,692
liquid yield option notes 0%
3/11/13
RETAIL & WHOLESALE - 0.1%
DRUG STORES - 0.1%
Rite Aid Corp. 5.25% 9/15/02 - 20,680 30,193
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - 0.0%
TELEPHONE SERVICES - 0.0%
GST Telecommunications, Inc. - $ 40 $ 35
0% 12/15/05 (c)(e)
TOTAL CONVERTIBLE BONDS 76,920
NONCONVERTIBLE BONDS - 16.5%
AEROSPACE & DEFENSE - 0.7%
AEROSPACE & DEFENSE - 0.3%
Lockheed Martin Corp. 7.2% A3 74,700 83,566
5/1/36
DEFENSE ELECTRONICS - 0.4%
Raytheon Co.:
5.95% 3/15/01 Baa1 24,250 24,473
6.3% 8/15/00 Baa1 44,350 44,883
6.45% 8/15/02 Baa1 33,950 34,954
104,310
SHIP BUILDING & REPAIR - 0.0%
Newport News Shipbuilding, B1 2,430 2,637
Inc. 9.25% 12/1/06
TOTAL AEROSPACE & DEFENSE 190,513
BASIC INDUSTRIES - 0.5%
CHEMICALS & PLASTICS - 0.2%
Huntsman Corp.:
9.5% 7/1/07 (e) B2 19,770 20,091
9.5% 7/1/07 (e) - 5,140 5,224
Koppers Industries, Inc. B2 6,365 6,174
9.875% 12/1/07
Pioneer Americas Acquisition B2 830 523
Corp. 9.25% 6/15/07
Scotts Co. 8.625% 1/15/09 (e) B2 6,230 6,448
38,460
IRON & STEEL - 0.0%
GS Technologies Operating, B2 3,620 2,444
Inc. 12.25% 10/1/05
WHX Corp. 10.5% 4/15/05 B3 7,650 6,809
9,253
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 0.1%
Doe Run Resources Corp.:
11.25% 3/15/05 B3 $ 2,210 $ 1,923
11.6963% 3/15/03 (f) B3 4,490 3,772
Interlake Corp. 12.125% 3/1/02 B3 9,515 9,693
Kaiser Aluminum & Chemical
Corp.:
Series B 10.875% 10/15/06 B1 200 196
Series D 10.875% 10/15/06 B1 2,740 2,685
9.875% 2/15/02 B1 2,170 2,165
12.75% 2/1/03 B2 6,430 6,205
Metals USA, Inc. 8.625% B2 9,700 9,312
2/15/08
35,951
PACKAGING & CONTAINERS - 0.0%
Gaylord Container Corp. Caa1 2,790 2,539
9.375% 6/15/07
PAPER & FOREST PRODUCTS - 0.2%
Ainsworth Lumber Co. Ltd. B3 4,160 4,160
12.5% 7/15/07 pay-in-kind
APP Finance II Mauritius Ltd. Caa 13,365 6,148
12% 3/15/04
Container Corp. of America B2 1,020 1,066
gtd. 9.75% 4/1/03
Doman Industries Ltd. yankee B1 3,680 2,723
8.75% 3/15/04
Indah Kiat Finance Mauritius Caa1 3,470 1,735
Ltd. 10% 7/1/07
Mail-Well Corp. 10.5% 2/15/04 B+ 1,160 1,221
Malette, Inc. yankee 12.25% Ba3 8,890 9,579
7/15/04
Millar Western Forest B3 12,260 9,869
Products Ltd. 9.875% 5/15/08
Pindo Deli Finance Mauritius Caa1 2,740 1,315
Ltd. 10.25% 10/1/02
Repap New Brunswick, Inc. Caa1 1,930 1,390
yankee 10.625% 4/15/05
Stone Container Corp.:
10.75% 10/1/02 B1 5,340 5,540
12.58% 8/1/16 (f) B2 810 867
Tembec Finance Corp. yankee Ba3 3,545 3,722
9.875% 9/30/05
Tjiwi Kimia Finance Mauritius Caa1 4,570 2,239
Ltd. 10% 8/1/04
51,574
TOTAL BASIC INDUSTRIES 137,777
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
CONSTRUCTION & REAL ESTATE -
0.3%
BUILDING MATERIALS - 0.0%
American Standard Cos., Inc.:
7.375% 2/1/08 Ba3 $ 12,085 $ 12,206
7.625% 2/15/10 Ba3 1,040 1,045
Schuff Steel Co. 10.5% 6/1/08 B3 1,530 1,346
14,597
CONSTRUCTION - 0.0%
Great Lakes Dredge & Dock B3 7,800 8,073
Corp. 11.25% 8/15/08 (e)
REAL ESTATE - 0.1%
LNR Property Corp.:
9.375% 3/15/08 B1 13,585 13,042
10.5% 1/15/09 B1 6,440 6,553
19,595
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
CenterPoint Properties Trust Baa2 8,720 8,417
6.75% 4/1/05
EOP Operating LP:
6.625% 2/15/05 Baa1 10,300 10,307
6.75% 2/15/08 Baa1 17,690 17,743
7.25% 2/15/18 Baa1 6,005 5,817
42,284
TOTAL CONSTRUCTION & REAL 84,549
ESTATE
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES -
0.1%
Blue Bird Body Co. 10.75% B2 2,300 2,415
11/15/06
Federal-Mogul Corp.:
7.5% 1/15/09 (e) Ba2 8,560 8,504
7.875% 7/1/10 Ba2 2,030 2,050
12,969
CONSUMER DURABLES - 0.0%
Corning Consumer Products Co. B3 6,420 4,847
9.625% 5/1/08
HOME FURNISHINGS - 0.0%
Omega Cabinets Ltd. 10.5% B3 2,440 2,416
6/15/07
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.3%
Cluett American Corp. 10.125% B3 $ 2,850 $ 2,729
5/15/08
Levi Strauss & Co.:
6.8% 11/1/03 (e) Baa3 30,210 28,851
7% 11/1/06 (e) Baa3 12,100 11,314
Polymer Group, Inc. 9% 7/1/07 B2 9,390 9,413
Synthetic Industries, Inc. B2 5,820 5,966
9.25% 2/15/07
WestPoint Stevens, Inc. Ba3 11,350 11,662
7.875% 6/15/08
Worldtex, Inc. 9.625% 12/15/07 B1 6,900 5,831
75,766
TOTAL DURABLES 95,998
ENERGY - 0.6%
COAL - 0.1%
P&L Coal Holdings Corp.:
8.875% 5/15/08 Ba3 1,920 1,985
9.625% 5/15/08 B2 19,330 19,982
21,967
ENERGY SERVICES - 0.2%
Baker Hughes, Inc. 6.875% A2 18,000 18,278
1/15/29 (e)
Bayard Drilling Technologies, B2 1,820 2,002
Inc. 11% 6/30/05
DI Industries, Inc. 8.875% B1 3,275 2,407
7/1/07
Grey Wolf, Inc. 8.875% 7/1/07 B1 7,680 5,645
Ocean Rig Norway AS 10.25% B3 5,920 4,677
6/1/08
Pool Energy Services Co. B2 8,130 8,374
8.625% 4/1/08
Pride Petroleum Services, Ba3 4,430 4,164
Inc. 9.375% 5/1/07
R&B Falcon Corp. 9.5% Ba1 6,480 6,464
12/15/08 (e)
52,011
OIL & GAS - 0.3%
Belco Oil & Gas Corp. 8.875% B1 2,820 2,623
9/15/07
Canadian Forest Oil Ltd. B2 5,000 4,550
8.75% 9/15/07
Chesapeake Energy Corp. B3 4,136 3,061
9.625% 5/1/05
Cross Timbers Oil Co. 9.25% B2 400 378
4/1/07
Flores & Rucks, Inc. 9.75% B1 8,080 8,221
10/1/06
Great Lakes Carbon Corp. B3 7,575 7,764
10.25% 5/15/08 pay-in-kind
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
ENERGY - CONTINUED
OIL & GAS - CONTINUED
HS Resources, Inc. 9.25% B2 $ 420 $ 403
11/15/06
Hurricane Hydrocarbons Ltd. Caa2 3,365 1,683
11.75% 11/1/04 (e)
Ocean Energy, Inc. 8.375% B1 7,130 6,738
7/1/08
Petroleum Geo-Services ASA Baa3 29,550 27,177
yankee 7.125% 3/30/28
Plains Resources, Inc.:
Series B 10.25% 3/15/06 B2 5,530 5,641
Series D, 10.25% 3/15/06 B2 1,905 1,943
Seven Seas Petroleum, Inc. Caa1 2,970 2,020
12.5% 5/15/05
Vintage Petroleum, Inc. 9% B1 730 712
12/15/05
72,914
TOTAL ENERGY 146,892
FINANCE - 4.7%
BANKS - 2.2%
ABN-Amro Bank NV, Chicago A1 28,500 29,283
6.625% 10/31/01
Banco Latinoamericano Baa2 10,550 10,438
Exportaciones SA euro 6.9%
12/4/99 (e)
Bank of New York A1 50,000 54,521
Institutional Capital Trust
A 7.78% 12/1/26 (e)
BankAmerica Corp. 10% 2/1/03 Aa3 2,990 3,460
BankBoston Companies 6.625% A3 9,640 9,832
2/1/04
BankBoston NA 6.375% 3/25/08 A2 2,650 2,670
BanPonce Financial Corp.:
6.66% 3/26/01 A3 10,000 10,077
6.75% 8/9/01 A3 18,240 18,414
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 37,000 37,105
5.95% 7/15/01 A1 43,800 44,075
Capital One Bank:
6.375% 2/15/03 Baa3 20,000 19,744
6.42% 11/12/99 Baa3 25,000 24,969
7.2% 7/19/99 Baa3 22,000 22,058
Capital One Financial Corp. Ba1 20,300 19,591
7.125% 8/1/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Chase Manhattan Corp. 5.5% Aa3 $ 8,700 $ 8,731
2/15/01
First Chicago NBD A1 35,000 38,042
Institutional Capital B
7.75% 12/1/26 (e)
First Maryland Bancorp A3 8,345 8,551
10.375% 8/1/99
First USA Bank 7.65% 8/1/03 Aa3 12,500 13,548
Kansallis-Osake-Pankki, New A3 5,285 5,941
York 10% 5/1/02
Korea Development Bank:
6.625% 11/21/03 Ba2 11,260 10,676
7.125% 9/17/01 Ba2 7,950 7,793
MBNA Corp.:
6.34% 6/2/03 Baa2 6,475 6,347
6.875% 11/15/02 Baa2 29,550 29,726
Merchants National Corp. A2 6,850 7,058
9.875% 10/1/99
Midlantic Corp. 9.2% 8/1/01 A3 11,550 12,519
NationsBank NA 5.92% 6/8/01 Aa2 18,500 18,733
NB Capital Trust IV 8.25% Aa2 11,600 13,329
4/15/27
Provident Bank 6.125% 12/15/00 A3 27,500 27,691
Providian National Bank 6.25% Baa3 28,000 28,188
5/7/01
Summit Bancorp 8.625% 12/10/02 BBB+ 6,750 7,485
Union Planters National Bank A3 13,000 13,261
6.81% 8/20/01
563,856
CREDIT & OTHER FINANCE - 2.1%
Ahmanson Capital Trust I A3 15,500 17,374
8.36% 12/1/26 (e)
AMRESCO, Inc. 9.875% 3/15/05 Caa3 2,470 1,927
Arcadia Financial Ltd. 11.5% B2 4,785 3,708
3/15/07
Associates Corp. of North
America:
6% 4/15/03 Aa3 9,550 9,718
6% 7/15/05 Aa3 45,500 46,338
AT&T Capital Corp.:
6.25% 5/15/01 Baa3 40,260 39,679
6.41% 8/13/99 Baa3 6,500 6,522
7.5% 11/15/00 Baa3 31,960 32,432
BankBoston Capital Trust II A2 37,000 38,586
7.75% 12/15/26
Chase Capital I 7.67% 12/1/26 Aa3 45,040 48,803
ContiFinancial Corp. 8.125% B1 1,790 1,217
4/1/08
Delta Financial Corp. 9.5% B3 842 674
8/1/04
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
ERP Operating LP 6.55% A3 $ 7,000 $ 7,049
11/15/01
Finova Capital Corp. 6.27% Baa1 2,080 2,091
9/29/00
First Security Capital I A3 22,920 25,307
8.41% 12/15/26
First Union Institutional BBB+ 17,600 19,867
Capital I 8.04% 12/1/26
Fleet Capital Trust II 7.92% A2 5,200 5,760
12/11/26
General Electric Capital Aaa 25,630 25,703
Corp. 6.94% 4/13/09 (d)
GS Escrow Corp. 7.125% 8/1/05 Ba1 36,000 36,201
Household Finance Corp. 6% A2 25,000 25,128
5/8/00
Imperial Credit Capital Trust B2 3,600 2,736
I 10.25% 6/14/02
Imperial Credit Industries B2 9,577 7,374
9.875% 1/15/07
KeyCorp Institutional Capital A1 19,000 20,961
A 7.826% 12/1/26
Macsaver Financial Services, Ba1 3,260 2,274
Inc. 7.6% 8/1/07
MCN Investment Corp. 5.84% Baa3 11,820 11,819
2/1/99
Money Store, Inc. 7.3% 12/1/02 A2 13,900 14,706
Ocwen Capital Trust 10.875% B2 3,780 2,948
8/1/27
Olympic Financial Ltd. 11.5% B2 4,420 3,426
3/15/07
PNC Institutional Capital A2 19,000 21,275
Trust 8.315% 5/15/27 (e)
Sprint Capital Corp. 5.7% Baa1 7,290 7,320
11/15/03
Wells Fargo Capital C Capital Aa3 50,000 53,260
Securities 7.73% 12/1/26 (e)
542,183
INSURANCE - 0.2%
SunAmerica, Inc.:
6.2% 10/31/99 Aaa 21,500 21,652
6.2% 10/31/99 Aaa 27,000 27,191
Willis Corroon Corp. 9% Ba3 7,640 7,688
2/1/09 (e)
56,531
SAVINGS & LOANS - 0.2%
Home Savings of America FSB A3 10,500 10,554
6% 11/1/00
Long Island Savings Bank FSB:
6.2% 4/2/01 Baa3 14,750 14,764
7% 6/13/02 Baa3 14,850 15,232
40,550
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.0%
Amvescap PLC yankee 6.375% A3 $ 13,050 $ 13,302
5/15/03
ECM Corp. LP 14% 6/10/02 (e) - 155 154
13,456
TOTAL FINANCE 1,216,576
HEALTH - 0.2%
MEDICAL EQUIPMENT & SUPPLIES
- - 0.0%
Wright Medical Technology, Caa3 6,440 3,574
Inc. 11.75% 7/1/00 (f)
MEDICAL FACILITIES MANAGEMENT
- - 0.2%
Fountain View, Inc. 11.25% Caa1 6,190 5,323
4/15/08
Harborside Healthcare Corp. B3 6,200 2,914
0% 8/1/08 (c)
Mariner Post-Acute Network, - 2,970 2,302
Inc. 9.5% 11/1/07
Oxford Health Plans, Inc. 11% Caa1 8,040 8,161
5/15/05 (e)
Tenet Healthcare Corp.:
7.875% 1/15/03 Ba1 4,230 4,344
8% 1/15/05 Ba1 3,490 3,603
8.125% 12/1/08 (e) Ba3 24,820 25,503
52,150
TOTAL HEALTH 55,724
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
ELECTRICAL EQUIPMENT - 0.1%
Advanced Lighting B2 5,510 5,097
Technologies, Inc. 8%
3/15/08 (e)
Motors & Gears, Inc. 10.75% B3 14,340 14,699
11/15/06
Telex Communications, Inc. B2 5,330 4,264
10.5% 5/1/07
24,060
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
Bucyrus International, Inc. B1 260 224
9.75% 9/15/07
Continental Global Group, B2 1,620 1,353
Inc. 11% 4/1/07
Morris Material Handling, B2 10,580 7,723
Inc. 9.5% 4/1/08
Thermadyne Holdings Corp. 0% Caa1 11,150 4,878
6/1/08 (c)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Thermadyne Manufacturing LLC B3 $ 9,540 $ 8,705
9.875% 6/1/08
Tyco International Group SA Baa1 63,500 64,421
yankee 6.125% 6/15/01
87,304
POLLUTION CONTROL - 0.3%
Allied Waste North America,
Inc.:
7.625% 1/1/06 (e) Ba2 9,680 9,922
7.875% 1/1/09 (e) Ba2 11,160 11,495
Envirosource, Inc. 9.75% B3 5,930 5,159
6/15/03
WMX Technologies, Inc.:
6.25% 10/15/00 Baa3 11,150 11,261
6.25% 4/1/99 Baa3 10,000 10,012
7.1% 8/1/26 Baa3 10,860 11,667
7.7% 10/1/02 Baa3 10,000 10,617
8.25% 11/15/99 Baa3 7,050 7,195
77,328
TOTAL INDUSTRIAL MACHINERY & 188,692
EQUIPMENT
MEDIA & LEISURE - 2.9%
BROADCASTING - 2.1%
ACME Television LLC/ACME B3 7,590 6,376
Financial Corp. 0% 9/30/04
(c)
Adelphia Communications Corp.:
7.5% 1/15/04 (e) B1 6,230 6,308
7.75% 1/15/09 (e) B1 14,690 14,892
9.875% 3/1/07 B1 4,460 4,973
American Mobile Satellite - 2,990 1,495
Corp. 12.25% 4/1/08
Ascent Entertainment Group, B3 15,190 9,570
Inc. 0% 12/15/04 (c)
CapStar Broadcasting B3 2,380 2,023
Partners, Inc. 0% 2/1/09 (c)
Chancellor Media Corp.:
8% 11/1/08 (e) Ba2 8,090 8,747
9% 10/1/08 B1 2,280 2,497
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Clear Channel Communications, Baa3 $ 15,420 $ 15,923
Inc. 7.25% 10/15/27
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa3 2,325 2,608
9% 9/1/08 Baa3 18,140 21,732
EchoStar Communications Corp. - 11,126 12,739
12.125% 7/1/04 pay-in-kind
EchoStar DBS Corp. 9.375% B2 22,670 23,237
2/1/09 (e)
International Cabletel, Inc. B3 16,350 14,061
0% 2/1/06 (c)
Iridium Operating LLC/Iridium
Capital Corp.:
10.875% 7/15/05 B3 25,670 21,434
11.25% 7/15/05 B3 9,430 7,968
Metromedia Fiber Network, B2 10,220 10,757
Inc. 10% 11/15/08 (e)
NTL, Inc.:
0% 4/1/08 (c) B3 60,265 42,186
10% 2/15/07 B3 9,620 10,342
11.5% 10/1/08 (e) B3 5,400 6,143
Olympus Communications B1 10,275 11,354
LP/Olympus Capital Corp.
10.625% 11/15/06
Orion Network Systems, Inc. B1 36,325 23,066
0% 1/15/07 (c)
Renaissance Media Group B3 4,290 2,992
LLC/Renaissance Media
Capital Corp. 0% 4/15/08 (c)
Rogers Cablesystems Ltd. Ba3 1,360 1,510
yankee 10.125% 9/1/12
Satelites Mexicanos SA de CV:
9.03% 6/30/04 (e)(f) B1 14,423 13,486
10.125% 11/1/04 B3 15,780 12,466
TCI Communications, Inc.:
8.25% 1/15/03 Baa3 23,130 25,435
9.8% 2/1/12 Baa3 20,180 27,132
8.75% 8/1/15 Baa3 38,398 48,757
Telewest Communications PLC B1 1,210 1,428
11.25% 11/1/08 (e)
Telewest PLC:
yankee 9.625% 10/1/06 B1 1,250 1,338
0% 10/1/07 (c) B1 27,940 24,238
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Time Warner, Inc.:
6.85% 1/15/26 Baa3 $ 19,000 $ 19,698
6.875% 6/15/18 Baa3 19,230 20,325
7.75% 6/15/05 Baa3 10,000 11,097
8.18% 8/15/07 Baa3 12,000 13,938
UIH Australia/Pacific, Inc.:
Series B 0% 5/15/06 (c) B2 23,560 13,783
Series D 0% 5/15/06 (c) B2 4,020 2,352
United International B3 18,200 12,012
Holdings, Inc. 0% 2/15/08 (c)
532,418
ENTERTAINMENT - 0.3%
AMC Entertainment, Inc. 9.5% B3 4,930 4,918
3/15/09
Carmike Cinemas, Inc. 9.375% B2 2,980 3,017
2/1/09 (e)
Cinemark USA, Inc.:
8.5% 8/1/08 B2 2,340 2,299
9.625% 8/1/08 B2 4,860 5,030
Harrahs Operating Co., Inc. Ba2 17,550 17,726
7.875% 12/15/05
Paramount Communications, Baa3 3,325 3,479
Inc. 7.5% 1/15/02
Premier Parks, Inc.:
0% 4/1/08 (c) B3 8,330 5,758
9.25% 4/1/06 B3 560 582
Viacom, Inc. 6.75% 1/15/03 Baa3 21,600 22,370
65,179
LODGING & GAMING - 0.2%
Circus Circus Enterprises,
Inc.:
6.45% 2/1/06 Baa3 260 233
7% 11/15/36 Baa3 2,260 2,060
7.625% 7/15/13 Ba2 3,600 3,186
9.25% 12/1/05 Ba2 5,590 5,660
HMH Properties, Inc.:
7.875% 8/1/05 Ba2 9,900 9,677
7.875% 8/1/08 Ba2 1,790 1,732
8.45% 12/1/08 Ba2 5,630 5,630
KSL Recreation Group, Inc. B3 2,710 2,710
10.25% 5/1/07
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
Prime Hospitality Corp.:
9.25% 1/15/06 Ba2 $ 430 $ 449
9.75% 4/1/07 B1 2,290 2,370
Signature Resorts, Inc.:
9.25% 5/15/06 B2 10,050 9,347
9.75% 10/1/07 B3 13,770 11,980
Sun International Hotels Ba3 3,390 3,526
Ltd./Sun International North
America, Inc. yankee 9%
3/15/07
58,560
PUBLISHING - 0.2%
Big Flower Press Holdings,
Inc.:
8.625% 12/1/08 (e) B2 3,890 3,978
8.875% 7/1/07 B2 16,230 16,757
News America, Inc.:
6.625% 1/9/08 Baa3 4,425 4,624
7.25% 5/18/18 Baa3 25,700 26,994
52,353
RESTAURANTS - 0.1%
AFC Enterprises, Inc. 10.25% B3 7,625 8,025
5/15/07
Darden Restaurants, Inc. Baa1 220 217
6.375% 2/1/06
Dominos, Inc. 10.375% 1/15/09 B3 6,300 6,489
(e)
Host Marriott Travel Plazas, Ba3 9,720 10,060
Inc. 9.5% 5/15/05
NE Restaurant, Inc. 10.75% B3 1,910 1,834
7/15/08
SC International Services, B2 3,710 3,766
Inc. Series B, 9.25% 9/1/07
30,391
TOTAL MEDIA & LEISURE 738,901
NONDURABLES - 0.6%
BEVERAGES - 0.2%
Seagram Co. Ltd. yankee Baa3 4,275 4,111
6.875% 9/1/23
Seagram J E & Sons, Inc.:
6.625% 12/15/05 Baa3 19,700 20,074
7.6% 12/15/28 Baa3 20,700 22,054
46,239
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
NONDURABLES - CONTINUED
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 $ 22,725 $ 24,331
Del Monte Corp. 12.25% 4/15/07 Caa1 5,260 5,924
International Home Foods, B2 830 903
Inc. 10.375% 11/1/06
31,158
HOUSEHOLD PRODUCTS - 0.1%
AKI Holding Corp. 0% 7/1/09 Caa1 1,930 772
(c)
AKI, Inc. 10.5% 7/1/08 B2 1,710 1,607
Revlon Consumer Products Corp.:
8.125% 2/1/06 B2 7,100 6,763
8.625% 2/1/08 B3 5,570 4,943
9% 11/1/06 (e) B2 4,500 4,399
18,484
TOBACCO - 0.2%
Philip Morris Companies, Inc.:
6.95% 6/1/06 A2 20,550 21,933
7% 7/15/05 A2 27,190 29,021
50,954
TOTAL NONDURABLES 146,835
PRECIOUS METALS - 0.0%
Great Central Mines Ltd. Ba2 8,600 8,643
8.875% 4/1/08
RETAIL & WHOLESALE - 0.9%
APPAREL STORES - 0.1%
Mothers Work, Inc. 12.625% B3 8,300 8,632
8/1/05
Specialty Retailers, Inc.:
8.5% 7/15/05 B1 7,650 6,713
9% 7/15/07 B3 11,180 8,720
24,065
DRUG STORES - 0.1%
Rite Aid Corp. 6% 12/15/05 (e) Baa1 23,500 23,709
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES -
0.3%
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa2 $ 11,500 $ 11,918
8.5% 6/15/03 Baa2 60,285 66,727
78,645
GROCERY STORES - 0.2%
American Stores Co. 7.5% Baa2 14,850 16,703
5/1/37
Kroger Co. 6% 7/1/00 Baa3 28,300 28,468
Pathmark Stores, Inc.:
9.625% 5/1/03 Caa1 4,640 4,710
11.625% 6/15/02 Caa2 700 704
50,585
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.2%
Amazon.com, Inc. 0% 5/1/08 (c) Caa2 29,830 19,166
Finlay Enterprises, Inc. 9% B2 420 373
5/1/08
Finlay Fine Jewelry Corp. Ba3 1,860 1,748
8.375% 5/1/08
Guitar Center, Inc. 11% 7/1/06 B1 4,367 4,629
HMV Media Group PLC 10.25% B3 6,140 6,140
5/15/08
J. Crew Group, Inc. 0% Caa3 18,870 8,963
10/15/08 (c)
J. Crew Operating Corp. Caa1 9,110 8,199
10.375% 10/15/07
U.S. Office Products Co. B3 3,540 2,637
9.75% 6/15/08
51,855
TOTAL RETAIL & WHOLESALE 228,859
SERVICES - 0.2%
LEASING & RENTAL - 0.1%
Anthony Crane Rentals B3 4,080 3,917
LP/Anthony Credit Capital
Corp. 10.375% 8/1/08 (e)
AP Holdings, Inc. 0% 3/15/08 Caa2 3,800 2,166
(c)
Apcoa, Inc. 9.25% 3/15/08 Caa1 10,055 9,502
Hollywood Entertainment Corp. B3 8,980 9,205
10.625% 8/15/04
Renters Choice, Inc. 11% B2 5,650 5,862
8/15/08 (e)
30,652
PRINTING - 0.0%
Sullivan Graphics, Inc. Caa1 10,940 11,159
12.75% 8/1/05
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
SERVICES - CONTINUED
SERVICES - 0.1%
Coach USA, Inc. 9.375% 7/1/07 B1 $ 400 $ 414
Iron Mountain, Inc. 8.75% B3 1,730 1,799
9/30/09
Medaphis Corp. 9.5% 2/15/05 Caa1 10,385 8,100
SITEL Corp. 9.25% 3/15/06 B2 1,010 909
11,222
TOTAL SERVICES 53,033
TECHNOLOGY - 0.5%
COMMUNICATIONS EQUIPMENT - 0.1%
Intermedia Communications,
Inc.:
8.5% 1/15/08 B2 1,050 1,003
8.6% 6/1/08 B2 5,300 5,088
Jordan Telecommunication
Products, Inc.:
0% 8/1/07 (c) B3 7,800 5,850
9.875% 8/1/07 B3 2,170 2,127
14,068
COMPUTER SERVICES & SOFTWARE
- - 0.0%
Concentric Network Corp. - 6,440 6,794
12.75% 12/15/07
DecisionOne Corp. 9.75% 8/1/07 B3 4,920 984
DecisionOne Holdings Corp. 0% Caa1 7,835 313
8/1/08 unit (c)
ICG Services, Inc. 0% 5/1/08 - 2,160 1,161
(c)
9,252
COMPUTERS & OFFICE EQUIPMENT
- - 0.3%
Comdisco, Inc.:
6.1% 6/5/01 Baa1 38,250 38,742
6.375% 11/30/01 Baa1 24,500 24,724
9.25% 7/6/00 Baa2 7,625 8,032
9.28% 6/5/00 Baa1 2,000 2,101
9.3% 6/27/00 Baa2 2,000 2,106
9.5% 1/28/02 Baa2 2,580 2,852
78,557
ELECTRONIC INSTRUMENTS - 0.0%
Telecommunications Techniques B3 10,980 10,870
Co. LLC 9.75% 5/15/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
TECHNOLOGY - CONTINUED
ELECTRONICS - 0.1%
Communications Instruments, B3 $ 3,190 $ 3,078
Inc. 10% 9/15/04
Fairchild Semiconductor Corp. B2 1,260 1,247
10.125% 3/15/07
Hadco Corp. 9.5% 6/15/08 B2 11,140 11,029
Insilco Corp. 12% 8/15/07 B3 5,660 5,660
unit (e)
21,014
TOTAL TECHNOLOGY 133,761
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.1%
Atlas Air, Inc. 9.25% 4/15/08 B3 4,180 4,180
Kitty Hawk, Inc. 9.95% B1 11,190 11,246
11/15/04
15,426
RAILROADS - 0.4%
Burlington Northern Santa Fe
Corp.:
6.53% 7/15/37 Baa2 20,000 20,764
6.875% 12/1/27 Baa2 12,000 12,754
7.29% 6/1/36 Baa2 22,430 25,238
Norfolk Southern Corp. 7.05% Baa1 39,550 43,441
5/1/37
102,197
SHIPPING - 0.0%
Amer Reefer Co. Ltd. 10.25% B1 1,160 696
3/1/08
Holt Group, Inc. 9.75% Caa1 7,245 4,999
1/15/06 (e)
Hvide Marine, Inc. 8.375% B1 600 468
2/15/08
6,163
TOTAL TRANSPORTATION 123,786
UTILITIES - 2.8%
CELLULAR - 0.9%
Cable & Wireless Baa1 35,340 35,925
Communications PLC 6.375%
3/6/03
Cellnet Data Systems, Inc. 0% - 25,140 7,291
10/1/07 (c)
Dial Call Communications, B2 3,290 3,306
Inc. 10.25% 12/15/05
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Iridium LLC/Iridium Capital B3 $ 1,600 $ 1,448
Corp. 13% 7/15/05
McCaw International Ltd. 0% Caa1 40,640 22,352
4/15/07 (c)
Millicom International Caa1 71,920 52,142
Cellular SA 0% 6/1/06 (c)
Nextel Communications, Inc.:
0% 8/15/04 (c) B2 10,530 10,609
0% 9/15/07 (c) B2 4,040 2,757
0% 2/15/08 (c) B2 42,660 27,196
Nextel International, Inc. 0% Caa1 22,870 10,520
4/15/08 (c)
ORBCOMM Global L.P./ORBCOMM B3 400 440
Capital Co. 14% 8/15/04
Orbital Imaging Corp. 11.625% - 1,120 1,154
3/1/05
Orion Network Systems, Inc. B1 7,240 7,168
11.25% 1/15/07
PageMart Nationwide, Inc. 0% B3 9,015 7,753
2/1/05 (c)
PageMart Wireless, Inc. 0% Caa2 6,540 2,681
2/1/08 (c)
Rogers Communications, Inc. B2 20,060 20,862
8.875% 7/15/07
Telesystem International
Wireless, Inc.:
0% 6/30/07 (c) Caa1 11,050 4,807
0% 11/1/07 (c) Caa1 20,330 7,522
Teligent, Inc.:
0% 3/1/08 (c) Caa1 15,980 7,830
11.5% 12/1/07 Caa1 5,320 5,054
238,817
ELECTRIC UTILITY - 0.7%
AES Corp. 10.25% 7/15/06 Ba1 1,450 1,541
Avon Energy Partners Holdings:
yankee 6.73% 12/11/02 (e) Baa2 17,000 17,564
6.46% 3/4/08 (e) Baa2 25,500 25,850
7.05% 12/11/07 (e) Baa2 18,000 18,831
DR Investments UK PLC yankee A2 32,000 33,248
7.1% 5/15/02 (e)
Israel Electric Corp. Ltd.:
yankee 7.25% 12/15/06 (e) A3 9,250 9,306
7.75% 12/15/27 (e) A3 50,905 46,878
Niagara Mohawk Power Corp. Ba2 5,945 6,614
7.75% 10/1/08
Texas Utilities Co. 6.375% Baa3 19,610 20,033
1/1/08
179,865
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
GAS - 0.2%
Kern River Funding Corp. A3 $ 20,000 $ 20,664
6.72% 9/30/01 (e)
Southwest Gas Corp. 9.75% Baa2 20,650 23,033
6/15/02
43,697
TELEPHONE SERVICES - 1.0%
Allegiance Telecom, Inc. - 1,870 1,954
12.875% 5/15/08
Covad Communications Group, - 11,510 6,791
Inc. 0% 3/15/08 (c)
DTI Holdings, Inc. 0% 3/1/08 - 8,390 2,098
(c)
Firstworld Communications, - 6,340 2,441
Inc. 0% 4/15/08 (c)
GCI, Inc. 9.75% 8/1/07 B2 2,120 2,099
Global TeleSystems Group, Caa2 3,740 3,618
Inc. 9.875% 2/15/05
GST Network Funding, Inc. 0% - 21,340 9,710
5/1/08 (c)(e)
GST Equipment Funding, Inc. - 3,630 3,712
13.25% 5/1/07
GST Telecommunications, Inc. - 9,605 8,789
12.75% 11/15/07
Hermes Europe Railtel BV B3 5,770 6,116
10.375% 1/15/09 (e)
Hyperion Telecommunications, B3 10,710 8,247
Inc. 0% 4/15/03 (c)
ICG Holdings, Inc. 0% 9/15/05 - 8,550 7,182
(c)
ICG Services, Inc. 0% 2/15/08 - 28,040 15,632
(c)
IXC Communications, Inc. 9% B3 13,300 13,167
4/15/08
KMC Telecom Holdings, Inc. 0% - 4,850 2,425
2/15/08 (c)
Level 3 Communications, Inc. B3 19,270 19,077
9.125% 5/1/08
Logix Communications - 9,910 8,919
Enterprises, Inc. 12.25%
6/15/08
MCI WorldCom, Inc.:
6.4% 8/15/05 Baa2 30,620 31,757
7.75% 4/1/07 Baa2 9,230 10,479
8.875% 1/15/06 Baa2 28,746 31,301
McLeodUSA, Inc. 0% 3/1/07 (c) B2 13,580 10,558
NEXTLINK Communications LLC B3 2,990 3,244
12.5% 4/15/06
NEXTLINK Communications, Inc.:
9% 3/15/08 B3 2,020 1,914
9.625% 10/1/07 B3 3,120 3,042
10.75% 11/15/08 (e) B3 8,170 8,476
Optel Communications Corp. - 8,600 8,056
15% 12/29/04 (g)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
Pathnet, Inc. 12.25% 4/15/08 - $ 4,910 $ 2,701
Rhythms Netconnections, Inc. - 15,100 8,305
0% 5/15/08 (c)
WinStar Communications, Inc.:
0% 10/15/05 (c) Caa1 5,550 3,913
0% 3/15/08 (c) CCC 11,940 8,239
14.5% 10/15/05 (c) Caa1 14,680 16,001
Winstar Equipment Corp. 12.5% B3 4,950 4,901
3/15/04
274,864
TOTAL UTILITIES 737,243
TOTAL NONCONVERTIBLE BONDS 4,287,782
TOTAL CORPORATE BONDS 4,364,702
(Cost $4,387,510)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 3.8%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 1.0%
Fannie Mae:
5.75% 6/15/05 Aaa 28,300 29,339
6.74% 5/13/04 Aaa 8,500 9,061
6.79% 6/2/04 Aaa 43,335 46,572
Federal Agricultural Mortgage
Corp.:
7.01% 8/10/03 Aaa 1,040 1,119
7.01% 8/10/04 Aaa 1,340 1,457
7.04% 8/10/05 Aaa 5,100 5,616
Federal Home Loan Bank:
7.56% 9/1/04 Aaa 1,340 1,493
8.09% 12/28/04 Aaa 3,500 4,008
8.195% 12/22/04 Aaa 10,000 11,502
Freddie Mac 5.035% 4/28/03 Aaa 35,000 34,993
Government Loan Trusts Aaa 9,240 10,338
(assets of Trust guaranteed
by U.S. Government through
Agency for International
Development) 8.5% 4/1/06
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Government Trust Certificates Aaa $ 12,563 $ 13,232
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency): Class T-3, 9.625%
5/15/02
Class 1-C, 9.25% 11/15/01 Aaa 17,935 19,036
Class 2-E 9.4% 5/15/02 Aaa 11,532 12,151
Guaranteed Export Trust Aaa 430 428
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994 C, 6.61% 9/15/99
Israel Export Trust Aaa 3,925 4,050
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994 1, 6.88% 1/26/03
Overseas Private Investment - 30,000 31,790
Corp. U.S. Government
guaranteed participation
certificate Series 1996-A1,
6.726% 9/15/10 (callable)
Private Export Funding Corp.:
secured 6.86% 4/30/04 Aaa 2,580 2,682
secured 7.9% 3/31/00 Aaa 12,750 13,162
U.S. Department of Housing Aaa 11,375 12,732
and Urban Development
government guaranteed
participation certificates
Series 1995 A, 8.27% 8/1/03
TOTAL U.S. GOVERNMENT AGENCY 264,761
OBLIGATIONS
U.S. TREASURY OBLIGATIONS -
2.8%
U.S. Treasury Bond:
6.125% 11/15/27 Aaa 16,800 18,905
6.375% 8/15/27 Aaa 8,000 9,260
6.875% 8/15/25 Aaa 128,060 156,133
7.625% 2/15/25 Aaa 64,935 85,887
8.75% 5/15/17 Aaa 4,550 6,359
8.875% 8/15/17 Aaa 61,480 86,984
11.625% 11/15/04 Aaa 48,000 64,485
12% 5/15/05 Aaa 63,000 87,432
12.375% 5/15/04 Aaa 15,756 21,332
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. TREASURY OBLIGATIONS -
CONTINUED
U.S. Treasury Notes:
7% 7/15/06 Aaa $ 124,925 $ 142,258
7.5% 11/15/01 Aaa 54,250 58,251
TOTAL U.S. TREASURY 737,286
OBLIGATIONS
TOTAL U.S. GOVERNMENT AND 1,002,047
GOVERNMENT AGENCY OBLIGATIONS
(Cost $982,169)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 9.1%
FANNIE MAE - 7.4%
5.5% 10/1/08 to 1/1/14 Aaa 217,021 214,807
6% 10/1/08 to 1/1/29 Aaa 326,939 324,689
6% 1/1/14 to 2/1/14 (h) Aaa 201,500 202,382
6.5% 12/1/06 to 1/1/29 Aaa 1,056,894 1,066,469
7% 5/1/23 to 2/1/29 Aaa 109,572 111,970
7% 1/1/29 Aaa 919 939
7.5% 8/1/07 to 10/1/28 Aaa 3,060 3,152
8.5% 1/1/09 to 7/1/21 Aaa 52 55
10% 8/1/17 Aaa 69 74
TOTAL FANNIE MAE 1,924,537
FREDDIE MAC - 0.1%
5.5% 2/1/99 to 5/1/02 Aaa 29 29
7% 6/1/99 to 4/1/01 Aaa 12,719 12,782
8% 10/1/16 to 4/1/20 Aaa 2,372 2,493
TOTAL FREDDIE MAC 15,304
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 1.6%
6% 9/15/08 to 12/15/10 Aaa 24,027 24,342
6.5% 6/15/02 to 8/15/25 Aaa 22,559 22,829
7% 10/15/17 to 12/15/28 Aaa 89,631 91,817
7.5% 8/15/21 to 8/15/28 Aaa 180,337 186,381
8% 4/15/00 to 10/15/25 Aaa 68,106 70,854
8.5% 11/15/05 to 11/15/22 Aaa 4,597 4,899
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - CONTINUED
9% 3/15/10 to 5/15/22 Aaa $ 932 $ 1,000
9.5% 7/15/09 to 3/15/23 Aaa 7,578 8,118
10% 11/15/09 to 1/15/26 Aaa 10,242 11,095
11% 3/15/10 to 7/20/20 Aaa 3,652 4,019
TOTAL GOVERNMENT NATIONAL 425,354
MORTGAGE ASSOCIATION
TOTAL U.S. GOVERNMENT AGENCY 2,365,195
- - MORTGAGE SECURITIES
(Cost $2,322,838)
ASSET-BACKED SECURITIES - 1.0%
Airplanes Pass Through Trust Ba2 10,600 11,077
10.875% 3/15/19
Arcadia Automobile Aaa 15,835 15,899
Receivables Trust 6.5%
6/17/02
Capital Equipment Receivables Aaa 14,670 14,676
Trust 6.11% 7/15/99
Chase Manhattan Grantor Trust:
6.61% 9/15/02 Aaa 13,346 13,496
6.76% 9/15/02 A3 3,495 3,511
Chevy Chase Auto Receivables
Trust:
5.9% 7/15/03 Aaa 14,524 14,551
5.91% 12/15/04 Aaa 10,613 10,675
6.6% 12/15/02 Aaa 5,423 5,467
Contimortgage Home Equity Aaa 34,000 34,021
Loan Trust 6.26% 7/15/12
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa3 14,100 14,154
6.4% 5/15/02 A1 19,240 19,466
6.4% 12/15/02 Baa3 8,660 8,695
Ford Credit Grantor Trust Aaa 2,673 2,676
5.9% 10/15/00
Key Auto Finance Trust:
6.3% 10/15/03 A2 17,393 17,415
6.65% 10/15/03 Baa3 5,100 5,155
KeyCorp Auto Grantor Trust A3 177 177
5.8% 7/15/00
MBNA Master Credit Card Trust Aaa 34,000 35,714
II 6.55% 1/15/07
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Sears Credit Account Master Aaa $ 28,383 $ 28,490
Trust II 6.5% 10/15/03
UFSB Grantor Trust 8.2% Baa2 257 257
1/10/01
TOTAL ASSET-BACKED SECURITIES 255,572
(Cost $252,779)
COMMERCIAL MORTGAGE
SECURITIES - 1.2%
ACP Mortgage LP Series E, BB 2,006 1,900
7.0802% 2/28/28 (e)(f)
Berkeley Federal Bank & Trust - 6,080 4,352
FSB Series 1994 Class 1-B
7.667% 8/1/24 (e)(f)
CBM Funding Corp.:
sequential pay Series 1996-1 AA 298 299
Class A 1, 7.55% 7/1/99
Series 1996-1B Class C, 7.86% BBB 12,500 12,865
2/1/08
CS First Boston Mortgage
Securities Corp.:
Series 1995-WF1 Class A-2, AAA 30,218 30,180
6.648% 12/21/27
Series 1997 C2 Class D, 7.27% Baa2 22,200 21,062
1/17/35
Series 1998 FLI Class E, Baa2 42,880 41,714
6.4788% 1/10/13 (e)(f)
DLJ Mortgage Acceptance Corp. - 2,800 2,753
Series 1993-MF12 Class B-2,
10.1% 9/18/03 (e)
Equitable Life Assurance A2 6,000 6,364
Society of the United States
(The) Series 1996 1 Class
C1, 7.52% 5/15/06 (e)
First Chicago/Lennar Trust I:
Series 1997 CHL1 Class E, - 2,900 2,224
8.1117% 4/1/39 (f)
Series 1997-CHL1 Class D, - 3,500 3,001
8.1117% 4/13/39 (f)
General Motors Acceptance Ba3 3,500 2,837
Corp. Commercial Mortgage
Securities, Inc. Series
1996-C1 Class F, 7.86%
10/15/28 (e)
GS Mortgage Securities Corp. Baa3 20,000 18,243
II Series 1998 GLII Class E,
6.9697% 4/13/31 (e)(f)
LB Multifamily Mortgage Trust Caa1 3,000 2,070
Series 1991 4 Class A1,
6.9741% 4/25/21 (f)
Morgan Stanley Capital I, Inc.:
Series 1996-MBL1 Class E, - 3,642 3,588
8.1594% 5/25/21 (e)(f)
COMMERCIAL MORTGAGE
SECURITIES - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Morgan Stanley Capital I,
Inc.: - continued
Series 1998 CF1:
Class D, 7.35% 1/15/12 Baa2 $ 19,733 $ 19,055
Class E, 7.35% 12/15/12 Baa3 6,848 6,033
Mortgage Capital Funding, Ba1 4,500 3,773
Inc. Series 1998-MC3 Class
F, 0% 11/18/31 (e)(f)
Nationslink Funding Corp. BB 4,500 3,491
7.105% 8/20/30
Nomura Asset Securities Corp. Baa2 55,000 50,170
Series 1998-D6 Class A-4,
7.5718% 3/17/28 (f)
Nomura Depositor Trust Series - 3,500 2,998
1998-ST1A Class B1A, 7.75%
1/15/03 (e)(f)
Penn Mutual Life Insurance - 6,500 4,069
Co. (The)/Penn Insurance &
Annuity Co. Series 1996-PML
Class K, 7.9% 11/15/26 (e)
Resolution Trust Corp.:
Series 1991 M2 Class A3, Ba3 1,268 1,027
7.2498% 9/25/20 (f)
Series 1995-C2 Class D, 7% Baa2 3,564 3,548
5/25/27
Structured Asset Securities
Corp.:
Series 1992-M1 Class C, 7.05% B2 2,200 2,033
11/25/02
Series 1993-C1 Class E, 6.6% B 3,250 1,463
10/25/24 (e)
Series 1995 C1 Class F, - 3,000 2,391
7.375% 12/25/25 (e)
Series 1995-C1 Class E, BB 7,896 7,444
7.375% 9/25/24 (e)
Series 1996 CFL Class G, B 3,500 3,189
7.75% 2/25/28 (e)
Series 1996-CFL Class E, BB+ 11,188 10,957
7.75% 2/25/28
Thirteen Affiliates of Aaa 32,000 33,384
General Growth Properties,
Inc. sequential pay Series A
2, 6.602% 12/15/10 (e)
Whitehall Partners Series - 8,892 8,864
1995-C1 Class E, 8.01%
7/20/25 (e)
TOTAL COMMERCIAL MORTGAGE 317,341
SECURITIES
(Cost $320,124)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 0.3%
Korean Republic:
global bond 8.75% 4/15/03 Ba1 15,580 16,271
8.875% 4/15/08 Ba1 33,220 36,084
Manitoba Province yankee Aa3 5,000 5,292
6.75% 3/1/03
Quebec Province:
yankee:
6.86% 4/15/26 (d) A2 16,750 18,431
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (I) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Quebec Province yankee: -
continued
7.125% 2/9/24 A2 $ 2,560 $ 2,811
7.5% 7/15/23 A2 10,060 11,517
TOTAL FOREIGN GOVERNMENT AND 90,406
GOVERNMENT AGENCY OBLIGATIONS
(Cost $87,059)
SUPRANATIONAL OBLIGATIONS -
0.0%
Inter American Development Aaa 10,850 11,456
Bank yankee 6.29% 7/16/27
(Cost $10,782)
CERTIFICATES OF DEPOSIT - 0.1%
Canadian Imperial Bank of 21,000 21,281
Commerce, New York yankee
6.2% 8/1/00 (Cost $21,032)
CASH EQUIVALENTS - 2.8%
SHARES
Taxable Central Cash Fund (b) 721,876,086 721,876
(Cost $721,876)
TOTAL INVESTMENT IN $ 26,056,647
SECURITIES - 100%
(Cost $20,773,370)
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income
Equity Securities
PRIDES - Premium Redeemable
Increased Dividend
Equity Securities
QUIPS - Quarterly Income
Preferred Securities
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Debt obligation initially issued in zero coupon form which
converts to coupon form at a specified rate and date. The rate shown
is the rate at period end.
(d) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
(e) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $921,894,000 or 3.5% of net assets.
(f) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(g) 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:
SECURITY ACQUISTION DATE ACQUISITION COST (000S)
Alliance Gaming Corp. 7/28/98 -
Mothers Work, Inc. 6/18/98 $ 21
Optel Communications Corp. 12/31/97 $ 506
warrants 12/29/04
Optel Communications Corp. 12/31/97 - 12/31/98 $ 8,140
15% 12/29/04
(h) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(i) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 18.1% AAA, AA, A 17.1%
Baa 6.6% BBB 7.3%
Ba 1.4% BB 1.3%
B 3.9% B 4.0%
Caa 1.0% CCC 0.8%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings
for the sovereign credit of the issuing government. The percentage not
rated by Moody's or S&P amounted to 0.9%. FMR has determined that
unrated debt securities that are lower quality account for 0.2% of the
total value of investment in securities.
INCOME TAX INFORMATION
At January 31, 1999, the aggregate cost of investment securities for
income tax purposes was $20,780,651,000. Net unrealized appreciation
aggregated $5,275,996,000, of which $5,678,588,000 related to
appreciated investment securities and $402,592,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) JANUARY
31, 1999
ASSETS
Investment in securities, at $ 26,056,647
value (cost $20,773,370) -
See accompanying schedule
Cash 1,815
Receivable for investments 199,494
sold
Receivable for fund shares 34,939
sold
Dividends receivable 22,418
Interest receivable 107,358
Other receivables 1,018
TOTAL ASSETS 26,423,689
LIABILITIES
Payable for investments $ 134,692
purchased Regular delivery
Delayed delivery 202,030
Payable for fund shares 67,020
redeemed
Accrued management fee 9,346
Other payables and accrued 5,104
expenses
TOTAL LIABILITIES 418,192
NET ASSETS $ 26,005,497
Net Assets consist of:
Paid in capital $ 20,433,904
Undistributed net investment 69,024
income
Accumulated undistributed net 219,278
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 5,283,291
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 1,284,732 $ 26,005,497
shares outstanding
NET ASSET VALUE, offering $20.24
price and redemption price
per share ($26,005,497
(divided by) 1,284,732
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED
JANUARY 31, 1999
INVESTMENT INCOME $ 140,722
Dividends
Interest 327,853
TOTAL INCOME 468,575
EXPENSES
Management fee $ 53,067
Transfer agent fees 23,145
Accounting fees and expenses 489
Non-interested trustees' 64
compensation
Custodian fees and expenses 299
Registration fees 520
Audit 92
Legal 78
Miscellaneous 76
Total expenses before 77,830
reductions
Expense reductions (2,149) 75,681
NET INVESTMENT INCOME 392,894
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 450,994
Foreign currency transactions (111) 450,883
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 657,826
Assets and liabilities in (1) 657,825
foreign currencies
NET GAIN (LOSS) 1,108,708
NET INCREASE (DECREASE) IN $ 1,501,602
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JANUARY 31, YEAR ENDED JULY 31, 1998
1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 392,894 $ 798,617
income
Net realized gain (loss) 450,883 2,253,079
Change in net unrealized 657,825 (223,880)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,501,602 2,827,816
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (413,096) (794,054)
From net investment income
From net realized gain (1,843,505) (1,073,230)
TOTAL DISTRIBUTIONS (2,256,601) (1,867,284)
Share transactions Net 2,243,972 4,338,239
proceeds from sales of shares
Reinvestment of distributions 2,154,194 1,786,916
Cost of shares redeemed (2,577,920) (4,472,056)
NET INCREASE (DECREASE) IN 1,820,246 1,653,099
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) 1,065,247 2,613,631
IN NET ASSETS
NET ASSETS
Beginning of period 24,940,250 22,326,619
End of period (including $ 26,005,497 $ 24,940,250
undistributed net investment
income of $69,024 and
$89,226, respectively)
OTHER INFORMATION
Shares
Sold 115,443 215,522
Issued in reinvestment of 120,613 91,754
distributions
Redeemed (133,690) (221,223)
Net increase (decrease) 102,366 86,053
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED
JANUARY 31, YEARS ENDED JULY 31,
1999 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 21.09 $ 20.37 $ 17.34 $ 16.69 $ 15.93 $ 16.59
period
Income from Investment
Operations
Net investment income .31 D .69 D .66 D .64 .42 .46
Net realized and .74 1.68 4.57 1.00 1.53 .88
unrealized gain (loss)
Total from investment 1.05 2.37 5.23 1.64 1.95 1.34
operations
Less Distributions
From net investment income (.34) (.69) (.66) (.55) (.44) (.51)
From net realized gain (1.56) (.96) (1.54) (.44) (.75) (1.49)
Total distributions (1.90) (1.65) (2.20) (.99) (1.19) (2.00)
Net asset value, end of $ 20.24 $ 21.09 $ 20.37 $ 17.34 $ 16.69 $ 15.93
period
TOTAL RETURN B, C 6.34% 12.56% 33.63% 10.06% 13.03% 8.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 26,005 $ 24,940 $ 22,327 $ 16,699 $ 14,387 $ 10,899
(in millions)
Ratio of expenses to average .65% A .64% .67% .74% .77% .80%
net assets
Ratio of expenses to average .63% A, E .63% E .66% E .72% E .77% .79% E
net assets after expense
reductions
Ratio of net investment 3.26% A 3.40% 3.69% 3.44% 3.50% 4.00%
income to average net assets
Portfolio turnover rate 80% A 84% 80% 139% 76% 74%
</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 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1999
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 require management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Debt securities for which quotations are
readily available are valued by a pricing service at their market
values as determined by their most recent bid prices in the principal
market (sales prices if the principal market is an exchange) in which
such securities are normally traded. Securities (including restricted
securities) for which market quotations are not readily available are
valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Short-term securities with remaining maturities of
sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at 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 foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
income, if any, are recorded at the fair market value of the
securities received. Interest income 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
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
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 litigation proceeds, paydown gains/losses on certain
securities, futures transactions, market discount, partnerships and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
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 for U.S. Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery 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 values of the securities purchased or sold on a
delayed delivery basis are identified as such in the fund's schedule
of investments. The fund may receive compensation for interest forgone
in the purchase of a delayed delivery security. With respect to
purchase commitments, the fund identifies securities as segregated in
its custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
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 $8,118,000 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $9,414,535,000 and $9,397,748,000, respectively, of which
U.S. government and government agency obligations aggregated
$2,795,773,000 and $2,667,529,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .15%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .44% of average net
assets.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (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 .19% 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 $1,003,000 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 $1,565,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $25,000 and $559,000, respectively, under these
arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Puritan Trust and the Shareholders of
Fidelity Puritan Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Puritan Fund (a fund of Fidelity Puritan Trust) at January
31, 1999, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fidelity
Puritan Fund's management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at January
31, 1999, by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 12, 1999
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 Investments Money Management, Inc. (FIMM), Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane, Jr., Vice President
Bettina Doulton, Vice President
Kevin E. Grant, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
PUR-SANN-0399 72342
1.700677.101
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S GROWTH AND INCOME FUNDS
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Real Estate Investment Portfolio
Utilities Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
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