FIDELITY(REGISTERED TRADEMARK)
LOW-PRICED STOCK
FUND
SEMIANNUAL REPORT
JANUARY 31, 2000
(2_FIDELITY_LOGOS)(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 39 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 43 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 1-800-544-6666 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While no major Y2K glitches disrupted the financial markets to start
the new year, inflation worries re-emerged to hinder stock performance
throughout January. The S&P 500(Registered trademark) and Dow Jones
Industrial Average each fell approximately 5%, while the
technology-oriented NASDAQ Index dropped more than 3% for the month.
In bond markets, the potential for further rate hikes as a pre-emptive
move against inflation continued to be an obstacle to fixed-income
performance.
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 1-800-544-6666, 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, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY(REGISTERED -3.86% 3.15% 106.30% 392.52%
TRADEMARK) LOW-PRICED STOCK
FIDELITY LOW-PRICED STOCK -6.75% 0.05% 100.11% 377.74%
(INCL. 3.00% SALES CHARGE)
Russell 2000 (registered 12.25% 17.75% 115.62% 279.12%
trademark)
Small Cap Funds Average 19.57% 29.42% 149.03% 416.78%
</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 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 814 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges. Lipper has created new comparison categories that
group funds according to portfolio characteristics and capitalization,
as well as by capitalization only. These averages are listed on page 5
of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY LOW-PRICED STOCK 3.15% 15.58% 17.28%
FIDELITY LOW-PRICED STOCK 0.05% 14.88% 16.93%
(INCL. 3.00% SALES CHARGE)
Russell 2000 17.75% 16.61% 14.25%
Small Cap Funds Average 29.42% 19.01% 17.05%
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
Low-Priced Stock Russell 2000
00316 RS002
1990/01/31 9700.00 10000.00
1990/02/28 9887.49 10310.48
1990/03/31 9986.16 10711.51
1990/04/30 9611.19 10361.77
1990/05/31 10371.01 11095.18
1990/06/30 10657.17 11117.66
1990/07/31 10597.97 10628.66
1990/08/31 9542.12 9213.14
1990/09/30 9123.36 8397.87
1990/10/31 8968.91 7885.20
1990/11/30 9452.88 8486.44
1990/12/31 9751.50 8823.16
1991/01/31 10647.36 9621.07
1991/02/28 11594.70 10693.95
1991/03/31 12367.00 11446.69
1991/04/30 12840.67 11417.89
1991/05/31 13036.32 11962.13
1991/06/30 12253.73 11265.02
1991/07/31 13005.43 11660.32
1991/08/31 13365.83 12091.92
1991/09/30 13420.86 12186.61
1991/10/31 13889.53 12508.93
1991/11/30 13325.00 11930.37
1991/12/31 14262.40 12885.69
1992/01/31 15497.38 13929.78
1992/02/29 16491.92 14336.13
1992/03/31 15945.47 13850.87
1992/04/30 16098.48 13365.62
1992/05/31 16207.77 13543.35
1992/06/30 15814.32 12902.85
1992/07/31 16327.99 13351.81
1992/08/31 16284.27 12975.05
1992/09/30 16416.81 13274.29
1992/10/31 16690.23 13696.22
1992/11/30 17818.10 14744.25
1992/12/31 18391.67 15257.91
1993/01/31 18864.13 15774.34
1993/02/28 18702.80 15410.00
1993/03/31 19267.46 15910.05
1993/04/30 19083.08 15473.32
1993/05/31 19486.41 16158.00
1993/06/30 19555.55 16258.80
1993/07/31 19809.07 16483.28
1993/08/31 20512.01 17195.38
1993/09/30 20678.68 17680.64
1993/10/31 21440.46 18135.71
1993/11/30 21071.86 17538.81
1993/12/31 22108.95 18138.48
1994/01/31 23259.13 18707.17
1994/02/28 23246.35 18639.51
1994/03/31 22223.97 17655.39
1994/04/30 22415.67 17760.33
1994/05/31 22338.99 17560.90
1994/06/30 22019.49 16964.59
1994/07/31 22517.90 17243.32
1994/08/31 23361.37 18204.16
1994/09/30 23472.30 18143.21
1994/10/31 23654.58 18071.60
1994/11/30 23023.60 17341.75
1994/12/31 23172.12 17807.67
1995/01/31 23157.63 17583.00
1995/02/28 23823.83 18314.43
1995/03/31 23983.14 18629.85
1995/04/30 24765.20 19044.09
1995/05/31 25272.09 19371.54
1995/06/30 26242.42 20376.45
1995/07/31 27878.95 21550.17
1995/08/31 28139.64 21995.98
1995/09/30 28642.27 22388.79
1995/10/31 27827.37 21387.52
1995/11/30 28551.73 22286.10
1995/12/31 28940.61 22874.11
1996/01/31 29253.48 22849.59
1996/02/29 30192.09 23561.69
1996/03/31 30692.69 24041.31
1996/04/30 31975.46 25326.84
1996/05/31 32945.36 26324.90
1996/06/30 32319.62 25243.91
1996/07/31 31083.78 23039.02
1996/08/31 32272.69 24376.66
1996/09/30 33283.81 25329.29
1996/10/31 33893.59 24938.91
1996/11/30 35689.05 25966.50
1996/12/31 36722.91 26647.02
1997/01/31 37135.72 27179.56
1997/02/28 37565.73 26520.54
1997/03/31 36877.71 25269.14
1997/04/30 36826.11 25339.58
1997/05/31 39595.38 28158.60
1997/06/30 41195.02 29365.35
1997/07/31 43345.07 30731.78
1997/08/31 43706.28 31434.96
1997/09/30 46557.82 33735.82
1997/10/31 45798.43 32253.84
1997/11/30 46015.40 32045.23
1997/12/31 46540.10 32606.12
1998/01/31 46558.62 32091.54
1998/02/28 49114.34 34464.48
1998/03/31 50929.28 35885.88
1998/04/30 51651.55 36084.45
1998/05/31 50466.28 34141.05
1998/06/30 50225.53 34212.88
1998/07/31 47910.56 31443.21
1998/08/31 40373.03 25337.58
1998/09/30 41804.54 27320.44
1998/10/31 43466.18 28434.66
1998/11/30 45249.41 29924.43
1998/12/31 46787.21 31776.20
1999/01/31 46316.27 32198.48
1999/02/28 44207.26 29590.58
1999/03/31 43490.61 30052.53
1999/04/30 46705.31 32745.46
1999/05/31 47974.81 33223.77
1999/06/30 50247.62 34726.14
1999/07/31 49694.78 33773.28
1999/08/31 47729.10 32523.37
1999/09/30 46476.71 32530.47
1999/10/31 46025.90 32662.22
1999/11/30 47185.13 34612.46
1999/12/31 49164.23 38530.59
2000/01/31 47774.43 37911.84
IMATRL PRASUN SHR__CHT 20000131 20000211 093342 R00000000000123
$10,000 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Low-Priced Stock Fund on January 31, 1990, and the current
3.00% sales charge was paid. As the chart shows, by January 31, 2000,
the value of the investment would have grown to $47,774 - a 377.74%
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 $37,912 - a 279.12% 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.
* THE LIPPER SMALL-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER SMALL-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF JANUARY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE SMALL-CAP VALUE FUNDS AVERAGE WERE -3.01%, 4.75%, 86.10%, AND
222.27%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE 4.75%, 12.98%, AND 12.14%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR THE SMALL-CAP SUPERGROUP AVERAGE WERE 16.07%, 26.36%,
126.41%, AND 311.75%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10
YEAR AVERAGE ANNUAL TOTAL RETURNS WERE 26.36%, 17.01%, AND 14.56,
RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
What goes up must come down. Or
must it? Technology stocks seemed
united in their quest to prove this
age-old theory wrong during the six
months that ended January 31, 2000.
Driven in large part by investors'
ongoing fancy with the Internet and
dot.com stocks, the technology sector
- - as measured by the NASDAQ
Index - returned 49.52% during
the six-month period. In contrast,
the Standard & Poor's 500 SM Index,
which serves as a general barometer
of overall U.S. stock performance,
returned 5.59%. It wasn't only the
industry leaders that got into the
act, either, as the technology rally
included scores of smaller and
medium-sized stocks. The Russell
2000 Index - a popular gauge of
small-cap stock performance -
returned a respectable 12.25%
during the period. The NASDAQ,
however, continued to be the
index du jour during the period -
the index was at around 2700 points
when the period began, crossed
4000 before New Year's and ended
January just under that threshold.
Since many tech stocks rose despite
a lack of discernible earnings, these
gains perplexed some money
managers, especially those that feel a
company's stock price follows its
earnings growth. Sensing that the
Federal Reserve Board would raise
interest rates in early February, tech
stocks sold off some throughout
January. Time will tell, though, if it's
only a speed bump.
(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. It was a tough period for the fund. For the six months that ended
January 31, 2000, the fund returned -3.86%. This trailed both the
Russell 2000 Index - which returned 12.25% during that time - and the
small cap funds average, which returned 19.57%, according to Lipper
Inc. For the 12 months that ended January 31, 2000, the fund returned
3.15%, while the Russell 2000 and Lipper group returned 17.75% and
29.42%, respectively.
Q. WHAT FACTORS HINDERED THE FUND'S PERFORMANCE DURING THE PERIOD?
A. I followed an earnings-driven strategy in a market that rewarded
concepts and price momentum. Companies with high earnings relative to
their stock prices typically outperform, and I did and still do favor
these kinds of stocks. This year, however, stocks within the Russell
2000 that experienced earnings losses outperformed, and those with
small profits relative to their stock prices beat those with larger
profits. This unusual trend continued through the second half of 1999
and into early 2000. Even more frustrating, many stocks with healthy
earnings gains failed to keep pace with the Russell 2000. Of the
companies within the index with four consecutive quarterly earnings
gains of 20% or higher, three out of five trailed the index. The
success rate was even lower for non-technology stocks. Buying stocks
with strong earnings growth worked its usual magic within the
technology universe, but I did not hold enough of these stocks
relative to the fund's peers. Also, with valuations soaring throughout
the tech sector, the fund's technology weighting was somewhat
constrained by its mandate to invest primarily in stocks priced $35 or
lower.
Q. HOW DID YOU RESPOND TO THE DRAMATIC GROWTH IN TECHNOLOGY AND THE
INTERNET?
A. While the fund remained underweighted in technology relative to the
index during the period, I did raise its overall weighting to
approximately 18%. The fund's five best-performing stocks fell into
the tech category, including Siliconix - which makes power and analog
semiconductors - and Symantec, a leading anti-virus and security
software manufacturer. Data storage company Advanced Digital Corp.
also performed well. I tried to add companies that were developing new
Internet-related businesses, but also focused on those that were
profitable at the time I bought in. One good example was RCM
Technologies, a technology-related staffing firm that shifted around
30% of its business to web-related projects. Another was Daisytek, a
company whose principal business involves distributing toner
cartridges. Daisytek spun off a company called PFS Web, which provides
back-office support to business-to-business e-commerce companies.
Q. TOGETHER, FINANCE AND HEALTH STOCKS ACCOUNTED FOR NEARLY ONE-FOURTH
OF THE FUND'S ASSETS DURING THE PERIOD. HOW DID THESE GROUPS
CONTRIBUTE TO PERFORMANCE?
A. Finance stocks struggled across the board as a convergence of
insurance losses, credit losses and rising interest rates spelled
trouble for banks, savings and loans and insurance companies. Very few
stocks - including diversified financial company UICI - were able to
avoid this triple whammy. Health stocks, on the other hand, performed
better during this six-month period than the prior one. Universal
Health Services - which was a negative contributor six months ago -
managed to solve some reimbursement and operational issues, and the
company's earnings snapped back as a result.
Q. WHICH OTHER STOCKS PROVED DISAPPOINTING? WHICH PERFORMED WELL?
A. British tobacco firm Gallaher turned in a weak performance, as the
industry in general suffered from the ongoing U.S. tobacco litigation
talks. Other disappointments included restaurant group Applebee's and
USEC, a government-privatized company specializing in uranium
enrichment. Media-related stocks performed well during the period,
including cable television companies such as Moffat Communications and
Cogeco.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT FEW MONTHS?
A. Investors will continue to play conceptual stocks until something
happens to make them more skeptical of their ability to generate
future profits. If Internet companies become concerned about mounting
losses and start to lay off employees, investors could become more
attracted to somewhat more mundane businesses that are producing
real-time profitability. In the meantime, the fund is extremely
well-positioned to benefit when the market again appreciates
undervalued, small-growth companies.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(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,
2000, more than $6.1
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
CONTEMPLATES HOW INVESTORS
VALUED STOCKS IN 1999:
"Historically, a company's stock
price has reflected the real value
of its business, and earnings have
always been crucial to stock
performance. But 1999 proved
that not everyone accepts
earnings as a starting premise
anymore. Of the 100
top-performing stocks in the
Russell 2000 at the end of the year,
43 of the companies lost money.
"Whether we're seeing a
fundamental switch in the way
money managers should research
and value stocks is unclear. What
is clear is that we've seen a major
swing in how investors value stocks.
Much of this stems from
instantaneous news flow.
Investors can get a ton of
information on a stock quickly and
easily through the Internet, and I
feel many are trading more on
news than actual company
fundamentals. This strategy
worked well in 1999, but it ignores
longer-term positioning. For
future-oriented industries such as
the Internet, what really matters
is where the company will be in
five years.
"Instant news flow also is
changing earnings momentum
strategies. For instance, the
response time for a good earnings
report is much quicker thanks to
the Internet. On a stock-specific
basis, prices should stay pretty
volatile as the market digests
news flow all at once instead of
gradually."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Dallas Semiconductor Corp. 2.2 1.3
Reynolds & Reynolds Co. Class A 1.4 1.2
Black Box Corp. 1.4 0.9
Siliconix, Inc. 1.3 0.3
Biomet, Inc. 1.2 0.9
BJ's Wholesale Club, Inc. 1.1 0.9
Quest Diagnostics, Inc. 1.1 0.7
Universal Health Services, 1.1 0.8
Inc. Class B
Gallaher Group PLC sponsored 1.0 1.3
ADR
Advanced Digital Information 1.0 0.5
Corp.
12.8 8.8
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
TECHNOLOGY 17.9 12.9
FINANCE 14.1 16.5
HEALTH 9.5 8.8
MEDIA & LEISURE 8.0 8.2
RETAIL & WHOLESALE 7.9 8.3
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JANUARY 31, 2000 * AS OF JULY 31, 1999 **
Stocks 99.8% Stocks 97.9%
Convertible Securities 0.0% Convertible Securities 0.2%
Short-Term Investments and Short-Term Investments and
Net Other Assets 0.2% Net Other Assets 1.9%
* FOREIGN INVESTMENTS 22.1% ** FOREIGN INVESTMENTS 22.6%
Row: 1, Col: 1, Value: 99.8 Row: 1, Col: 1, Value: 97.90000000000001
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.2
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.2 Row: 1, Col: 8, Value: 1.9
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 99.8%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.4%
AEROSPACE & DEFENSE - 0.1%
Allied Research Corp. (a)(d) 473,000 $ 3,666
Cordant Technologies, Inc. 15,000 496
Primex Technologies, Inc. 183,200 3,916
8,078
DEFENSE ELECTRONICS - 0.3%
Ducommun, Inc. (a)(d) 1,095,500 11,845
Flir Systems, Inc. 203,000 3,743
15,588
SHIP BUILDING & REPAIR - 0.0%
Newport News Shipbuilding, 51,000 1,288
Inc.
TOTAL AEROSPACE & DEFENSE 24,954
BASIC INDUSTRIES - 4.7%
CHEMICALS & PLASTICS - 2.5%
Aronkasei Co. Ltd. 750,000 2,430
Asko Oyj 625,000 10,256
Celanese AG (a) 80,000 1,650
CFC International, Inc. (a) 52,400 301
Ellis & Everard PLC 300,000 1,023
Evc International NV (a) 150,000 1,951
General Chemical Group, Inc. 176,700 398
Georgia Gulf Corp. 465,000 12,729
International Specialty 769,300 5,481
Products, Inc. (a)
Low & Bonar PLC 150,000 365
Lydall, Inc. (a) 31,000 233
Nihon Kagaku Sangyo Co. Ltd. 200,000 529
Nippon Chemical Industrial 300,000 776
Co. Ltd.
Octel Corp. (a)(d) 1,472,000 16,192
OM Group, Inc. 100,000 3,763
Peak International Ltd. (a)(d) 914,100 10,169
Solutia, Inc. 1,380,800 18,986
Spartech Corp. 815,000 20,884
Synthetech, Inc. (a) 240,000 975
Tokyo Printing Ink 375,000 1,009
Manufacturing Co. Ltd.
USEC, Inc. (d) 8,630,000 45,308
Wardle Storeys PLC 200,000 1,402
156,810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 0.4%
Beltecno Corp. (a) 125,000 $ 361
Chubu Steel Plate Co. Ltd. 1,000,000 1,555
Cold Metal Products, Inc. (d) 332,400 1,163
Harris Steel Group, Inc. 220,600 3,053
Class A
Japan Steel Tower Co. Ltd. 500,000 1,345
Kentucky Electric Steel, Inc. 367,500 942
(a)(d)
Nippon Steel Drum Co. Ltd. 100,000 261
Northwest Pipe Co. (a) 109,000 1,621
Richardsons Westgarth PLC (d) 3,632,300 3,697
Roanoke Electric Steel Corp. 347,000 5,812
Samuel Manu-Tech, Inc. 35,000 182
Takigami Steel Construction 300,000 1,089
Co. Ltd.
21,081
METALS & MINING - 0.8%
Acier Leroux, Inc. Class B (a) 125,000 454
Cable Design Technology Corp. 430,000 9,890
(a)
Chase Industries, Inc. (a)(d) 908,200 7,720
De Beers Consolidated Mines 1,000,000 26,250
Ltd. ADR
Draka Holding NV 45,000 2,489
General Cable Corp. 100,000 775
Lindberg Corp. 82,500 568
Major Drilling Group 100,000 315
International, Inc. (a)
Nagahori Corp. 200,000 465
Toami Corp. (d) 350,000 1,841
U.S. Aggregates, Inc. 15,000 225
Zemex Cda Corp. (a) 73,300 678
51,670
PACKAGING & CONTAINERS - 0.3%
Astronics Corp. (a)(d) 387,950 4,025
Boxmore International PLC 300,000 1,294
Liqui-Box Corp. 32,000 1,526
Owens-Illinois, Inc. (a) 275,000 5,036
Silgan Holdings, Inc. (a) 523,600 7,069
18,950
PAPER & FOREST PRODUCTS - 0.7%
Crown Van Gelder (CVG) 300,000 3,639
(non-vtg.) (d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS -
CONTINUED
Mercer International, Inc. 202,200 $ 1,251
(SBI)
Metsa-Serla Oyj Class B Free 3,075,000 34,316
Shares
Noda Corp. 100,000 435
Rolland, Inc. 200,000 761
Uehara Sei Shoji Co. Ltd. 1,050,000 2,737
43,139
TOTAL BASIC INDUSTRIES 291,650
CONSTRUCTION & REAL ESTATE -
6.6%
BUILDING MATERIALS - 1.2%
American Woodmark Corp. 135,700 2,417
Asahi Concrete Works Co. Ltd. 1,150,000 3,587
(d)
Barnett, Inc. (a) 730,000 7,802
Brampton Brick Ltd. Class A 575,000 2,228
(a)(d)
Devcon International Corp. 346,700 1,885
(a)(d)
Domco, Inc. 504,000 2,755
Drew Industries, Inc. (a)(d) 1,144,200 10,727
Hibiya Engineering Ltd. 1,500,000 8,602
Kingspan Group PLC 175,000 523
Komai Tekko, Inc. 100,000 335
Kondotec, Inc. 275,000 1,347
Kyushu Fujisash Co. Ltd. 200,000 495
Lafarge Corp. 30,000 724
Matsuo Bridge Co. Ltd. 500,000 926
McClain Industries, Inc. (a) 20,100 89
Nichiha Corp. 300,000 2,248
Owens Corning 300,000 4,819
Patrick Industries, Inc. (d) 453,100 5,324
Polynorm NV 19,950 1,100
Quixote Corp. (d) 742,000 10,017
Richelieu Hardware Ltd. (a) 20,000 143
ROHN Industries, Inc. (a) 275,000 825
Shaw Group (a) 90,000 2,076
Watsco, Inc. Class A 107,500 1,250
72,244
CONSTRUCTION - 3.7%
American Homestar Corp. (a) 839,200 2,518
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
CONSTRUCTION - CONTINUED
Aoki Marine Co. Ltd. 126,000 $ 293
Barratt Developments PLC 250,000 858
Beazer Homes USA, Inc. (a)(d) 632,700 11,626
Clayton Homes, Inc. 4,655,000 39,568
Crossman Communities, Inc. 1,159,100 18,835
(a)(d)
D. R. Horton, Inc. 1,339,800 15,491
Dominion Homes, Inc. (a)(d) 578,000 3,071
Engle Homes, Inc. (d) 1,006,500 10,694
Henry Boot & Sons PLC 1,100,000 3,643
Jacobs Engineering Group, 1,135,000 33,483
Inc. (a)
Kaneshita Construction Co. 400,000 2,089
Ltd.
M/I Schottenstein Homes, Inc. 880,000 11,440
(d)
Matsui Construction Co. Ltd. 400,000 1,110
Meritage Corp. (a) 257,100 2,619
NCI Building Systems, Inc. (a) 762,500 11,533
Oakwood Homes Corp. (d) 2,700,000 7,425
Oriole Homes Corp. Class B 261,800 376
(a)(d)
Palm Harbor Homes, Inc. (a) 35,900 559
Robertson Ceco Corp. (a)(d) 1,017,600 9,985
Southern Energy Homes, Inc. 1,425,100 2,583
(a)(d)
Swan Hill Group PLC 1,100,000 1,439
Takada Kiko Co. Ltd. 700,000 3,011
Tay Homes PLC (a) 1,150,000 1,644
Technip SA (a)(e) 50,000 5,260
U.S. Home Corp. (a) 911,745 21,825
Volker Wessels Stevin NV 145,000 2,279
Writer Corp. (a) 67,000 180
Yokogawa Bridge Corp. 1,000,000 2,886
Yokogawa Construction Co. 300,000 936
Ltd.
229,259
ENGINEERING - 1.2%
Anthony & Sylvan Pools Corp. 50,000 369
(a)
Dai-Dan Co. Ltd. 300,000 1,536
Fugro NV 320,000 15,216
Hoan Kogyo Co. Ltd. 500,000 1,159
Japan Engineering Consultants 300,000 726
Kawasaki Setsubi Kogyo Co. 200,000 633
Ltd.
Metalrax Group PLC Class L 2,100,000 2,036
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
ENGINEERING - CONTINUED
MYR Group, Inc. (d) 600,300 $ 17,671
Ohba Co. Ltd. 125,000 227
Sanshin Corp. 250,000 493
Sanyo Engineering & 900,000 2,857
Construction, Inc.
Stantec, Inc. (a)(d) 700,000 5,279
Taihei Dengyo Kaisha Ltd. 100,000 247
URS Corp. (a)(d) 1,268,100 22,033
Willbros Group, Inc. (a) 643,200 3,859
74,341
REAL ESTATE - 0.1%
Chuo Warehouse Co. Ltd. 300,000 1,480
FRM Nexus, Inc. (a)(d) 156,649 220
Nagawa Co. Ltd. 825,000 5,914
Wilshire Oil of Texas (a) 391,000 1,564
9,178
REAL ESTATE INVESTMENT TRUSTS
- - 0.4%
AMRESCO Capital Trust, Inc. 377,400 3,467
Banyan Strategic Realty Trust 872,350 4,798
(SBI)
Meditrust Corp. unit 465,000 1,686
Redwood Trust, Inc. (d) 1,005,400 12,568
22,519
TOTAL CONSTRUCTION & REAL 407,541
ESTATE
DURABLES - 6.9%
AUTOS, TIRES, & ACCESSORIES -
3.6%
Autocam Corp. (d) 400,002 7,400
AutoZone, Inc. (a) 2,000,000 52,500
D. C. Cook Holdings PLC (d) 2,300,000 409
Dixon Motors PLC 400,000 827
European Motor Holdings PLC 250,000 212
FCC Co. Ltd. 50,000 717
Federal Screw Works (d) 108,800 4,678
Fuji Oozx, Inc. 200,000 385
Giant Industries, Inc. (a) 417,200 3,598
Intermet Corp. 133,000 1,513
Keiiyu Co. Ltd. 100,000 799
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Koito Industries Ltd. 1,000,000 $ 3,640
Lufkin Industries, Inc. 150,000 2,269
Meritor Automotive, Inc. 1,659,500 27,797
Monaco Coach Corp. (a) 457,500 9,951
Monro Muffler Brake, Inc. 744,000 6,510
(a)(d)
Murakami Corp. (d) 800,000 5,206
Nissin Shoji Co. Ltd. 250,000 982
Owari Precise Products Co. 350,000 658
Ltd.
Piolax, Inc. (d) 750,000 5,725
Quicks Group PLC (d) 3,999,999 3,910
Raytech Corp. (a)(d) 323,300 1,152
Rocla Oyj 50,000 378
Sanderson Bramal Motor Group 750,000 1,648
PLC
Strattec Security Corp. (a)(d) 528,700 17,976
Tachi-S Co. Ltd. 850,000 3,917
TBC Corp. (a)(d) 2,072,500 12,176
Tochigi Fuji Industrial Co. 600,000 1,201
Ltd. (a)
Transpro, Inc. (d) 660,925 3,924
Uni-Select, Inc. (d) 1,190,000 10,662
Wynn's International, Inc. (d) 1,777,600 27,775
220,495
CONSUMER DURABLES - 0.2%
Blyth Industries, Inc. (a) 70,000 1,641
CompX International, Inc. 218,900 3,981
Class A
Mikasa, Inc. 523,700 5,008
Portmeirion Potteries 125,000 252
Holdings PLC
10,882
CONSUMER ELECTRONICS - 0.8%
Fantom Technologies, Inc. 200,000 2,595
Fossil, Inc. (a) 1,338,000 26,007
Koss Corp. (a)(d) 140,000 2,048
Movado Group, Inc. (d) 946,000 17,974
Tulikivi Oyj (B Shares) 19,000 260
48,884
HOME FURNISHINGS - 1.0%
Airsprung Furniture Group PLC 975,000 1,859
Beter Bed Holding NV 131,666 3,450
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
HOME FURNISHINGS - CONTINUED
BMTC Group, Inc. Class A 400,000 $ 4,843
(sub. vtg.) (d)
Bush Industries, Inc. Class 876,800 13,262
A. (d)
Chromcraft Revington, Inc. (a) 407,500 3,795
Dorel Industries, Inc.:
Class A (multi-vtg.) (a)(e) 125,000 2,270
Class B (a) 500,600 9,178
La-Z-Boy, Inc. 470,938 6,446
Nakayamafuku Co. Ltd. 54,800 169
Nippon Filing 100,000 402
Rosebys PLC 525,000 3,265
Samas Groep NV 100,000 1,213
Silentnight Holdings PLC 250,000 767
Stanley Furniture Co., Inc. 702,100 12,638
(a)(d)
Tosco Co. Ltd. 452,000 1,393
64,950
TEXTILES & APPAREL - 1.3%
Berisford PLC 1,200,000 5,816
Conso International Corp. 738,050 6,366
(a)(d)
Decorator Industries, Inc. (d) 200,015 1,013
Dewhirst (IJ) Group PLC 5,500,000 4,976
Hampshire Group Ltd. (a)(d) 388,300 3,592
JLM Couture, Inc. (a)(d) 181,500 386
Jones Apparel Group, Inc. (a) 40,000 880
Nautica Enterprises, Inc. 3,610,000 32,264
(a)(d)
Novel Denim Holdings Ltd. (a) 235,000 969
Perry Ellis International, 454,400 5,183
Inc. (a)(d)
Polo Ralph Lauren Corp. Class 100,000 1,488
A (a)
Polymer Group, Inc. 250,600 4,260
Tandy Brands Accessories, 573,900 8,609
Inc. (a)(d)
Worldtex, Inc. (a) 709,900 1,686
77,488
TOTAL DURABLES 422,699
ENERGY - 3.5%
COAL - 0.0%
RJB Mining PLC 2,450,000 1,227
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
ENERGY SERVICES - 1.7%
AKITA Drilling Ltd. Class A 863,500 $ 5,646
(non-vtg.) (d)
Alpine Oil Services Corp. (a) 2,150,000 1,339
Australian Oil & Gas Corp. 201,506 208
Ltd.
Aztec Manufacturing Co. (d) 417,000 4,379
Carbo Ceramics, Inc. 554,000 11,980
Dawson Geophysical Co. (a)(d) 357,900 3,445
IHC Caland NV 50,000 1,941
Input/Output, Inc. (a) 1,020,000 5,993
Kaneb Services, Inc. (a) 1,049,400 4,722
Oceaneering International, 100,000 1,663
Inc. (a)
Offshore Logistics, Inc. (a) 100,000 925
Pe Ben Oilfield Services Ltd. 314,500 849
(a)(d)
Petroleum Helicopters, Inc. 211,200 2,429
Petroleum Helicopters, Inc. 300,000 3,338
(non-vtg.)
Powell Industries, Inc. (a)(d) 674,500 4,637
Precision Drilling Corp. 350,000 9,020
Class A (a)
RPC, Inc. (d) 2,782,800 24,002
Seitel, Inc. 241,000 1,958
Superior Energy Services, 1,990,000 14,054
Inc. (a)
102,528
OIL & GAS - 1.8%
Adams Resources & Energy, 421,300 4,213
Inc. (d)
British-Borneo Oil & Gas PLC 10,000 16
(a)
Castle Energy Corp. (d) 389,000 10,017
Columbus Energy Corp. (a)(d) 307,500 1,730
Dorchester Hugoton Ltd. 17,000 153
Elf Gabon 10,000 902
ENEX Resources Corp. (a)(d) 144,300 325
Fletcher Challenge Ltd. - 500,000 1,078
Energy Division
Foremost Industries, Inc. 517,500 680
(a)(d)
Frontier Oil Corp. (a) 100,000 763
Gulf Island Fabrication, Inc. 79,500 805
(a)
Hallwood Energy Corp. 423,928 1,855
Hartland Pipeline Services 210,000 116
Ltd. (a)
Hokuriku Gas Co. 1,500,000 4,050
Holly Corp. (d) 825,000 11,138
Markwest Hydrocarbon, Inc. 540,200 3,511
(a)(d)
Maynard Oil Co. (a)(d) 477,300 5,489
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Novus Petroleum Ltd. (a)(d) 9,100,178 $ 9,683
Petroleum Development Corp. 1,573,800 6,984
(a)(d)
Premier Oil PLC (a) 23,250,000 5,258
Renaissance Energy Ltd. (a) 500,000 4,722
Sunoco, Inc. 520,000 11,993
Swift Energy Co. (a)(d) 2,018,100 22,325
UNIFAB International, Inc. (a) 246,000 1,737
109,543
TOTAL ENERGY 213,298
FINANCE - 14.1%
BANKS - 4.1%
Banco Santander Puerto Rico 288,420 4,651
Bank of The Ozarks, Inc. (d) 196,300 3,460
Canadian Western Bank (d) 620,000 7,829
Cathay Bancorp, Inc. 293,800 11,752
DNB Holding ASA 450,000 1,623
DNB Holding ASA (e) 900,000 3,247
Financial Institutions, Inc. 110,000 1,196
First BanCorp P R (d) 2,786,200 50,500
GBC Bancorp (d) 584,700 11,402
Gronlandsbanken AS 20,000 529
Hamilton Bancorp, Inc. (a) 68,500 1,105
Hanmi Bank (d) 458,374 6,303
Harleysville National Corp. 13,650 396
Jyske Bank AS (Reg.) 1,150,000 20,775
Laurentian Bank 888,500 9,836
Midtbank AS 10,050 324
National Bank of Canada 2,500,000 30,183
Nordlandsbanken AS (d) 330,700 8,324
Nordvestbank (Reg.) 12,000 1,049
Okobank Class A 500,000 5,434
Ringkjoebing Bank (d) 31,730 2,783
Seacoast Financial Services 500,000 4,594
Corp.
SouthTrust Corp. 500,000 15,219
Sparebanken More 32,384 769
Sparebanken NOR primary 1,000,000 21,994
shares certificates
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Sparebanken Nord-Norge 100,000 $ 2,169
Sparebanken Rana 37,550 693
Grunnfondsbevis (d)
Sparebanken Rogaland capital 25,000 769
certificates
Sterling Bancorp (d) 580,965 9,513
Sydbank AS 330,000 11,966
250,387
CREDIT & OTHER FINANCE - 0.8%
Aeon Credit Service (ASIA) 250,000 96
Co. Ltd.
Amagerbanken AS 34,850 1,391
Amtsspar Fyn Holding AS 45,000 2,109
Associates First Capital 5,000 100
Corp. Class A
Credia Co. Ltd. 200,000 5,120
Doral Financial Corp. 2,000,000 20,750
Home Capital Group Class B 255,000 653
(sub. vtg.)
JCG Holdings Ltd. 14,700,000 8,124
Resource Bancshares Mortgage 338,700 1,387
Group, Inc.
Surrey Metro Savings Credit 565,000 4,456
Union (non-vtg.) (d)
Triad Guaranty, Inc. (a) 300,000 5,906
WSFS Financial Corp. 107,300 1,207
51,299
INSURANCE - 8.1%
ACE Ltd. 475,000 8,402
Amerus Life Holdings, Inc. 887,200 18,077
Blanch E.W. Holdings, Inc. 450,000 21,769
Brown & Brown, Inc. 72,200 2,477
Commerce Group, Inc. 595,000 15,396
Cotton State Life & Health 420,200 3,257
Insurance Co. (d)
Desjardins-Laurentian Finance 482,500 4,674
Corp. Class A (sub-vtg.) (d)
Enhance Financial Services 29,400 410
Group, Inc.
Fairfax Financial Holdings 1,117,900 70
Ltd. rights 12/31/07 (a)
Farm Family Holdings, Inc. 493,100 17,443
(a)(d)
Fidelity National Financial, 400,000 5,000
Inc.
Financial Industries Corp. (d) 268,700 2,553
FPIC Insurance Group, Inc. (a) 370,000 6,313
Fremont General Corp. 2,000,000 15,500
HCC Insurance Holdings, Inc. 1,594,000 21,220
Healthcare Recoveries, Inc. 1,112,500 5,145
(a)(d)
Independence Holding Co. 146,000 1,551
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Independent Insurance PLC 1,000,000 $ 4,346
Intercontinental Life Corp. 878,100 8,342
(a)(d)
Investors Title Co. 131,500 2,236
IPC Holdings Ltd. (d) 2,503,000 34,416
Lasalle Re Holdings Ltd. (d) 1,502,700 19,347
Medical Assurance, Inc. 314,790 6,886
MEEMIC Holdings, Inc. (a) 99,500 1,555
MIIX Group, Inc. 268,500 3,491
MMI Companies, Inc. (d) 1,267,900 11,173
Mobile America Corp. 112,300 225
Mutual Risk Management Ltd. 10,000 164
National Western Life 170,000 11,900
Insurance Co. Class A (a)(d)
Nymagic, Inc. 173,700 2,247
PAULA Financial (d) 591,800 3,329
Philadelphia Consolidated 1,093,300 15,853
Holding Corp. (a)(d)
PMI Group, Inc. 550,000 22,688
Professionals Insurance Co. 320,815 7,218
Management Group (a)
Protective Life Corp. 1,710,002 47,559
PXRE Group Ltd. (d) 725,063 8,610
Radian Group, Inc. 325,000 13,102
RenaissanceRe Holdings Ltd. 648,300 25,243
Stirling Cooke Brown Holdings 796,200 1,991
Ltd. (d)
Symons International Group, 163,400 245
Inc. (a)
Terra Nova (Bermuda) Holdings 1,796,600 40,536
Ltd. Class A (d)
UICI (a)(d) 2,840,000 28,045
Unico American Corp. 309,000 2,318
Union Assurances Federales SA 250,088 26,453
498,775
SAVINGS & LOANS - 0.8%
American Bank of Connecticut 23,700 521
Astoria Financial Corp. 20,000 583
First Federal Bankshares, 129,500 1,133
Inc.
First Mutual Bancshares, Inc. 20,500 195
Home Port Bancorp, Inc. (d) 149,100 3,783
Independence Federal Savings 120,200 1,202
Bank (d)
Iroquois Bancorp, Inc. 106,400 1,556
Ringerikes Sparebank 18,100 369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
UCBH Holdings, Inc. (a)(d) 676,500 $ 13,953
Washington Federal, Inc. 1,750,000 29,313
52,608
SECURITIES INDUSTRY - 0.3%
Daiko Shoken Business Co. 100,000 438
Garban-Intercapital PLC 500,000 1,790
Globaly Corp. 196,000 2,757
JWGenesis Financial Corp. (a) 90,300 2,376
MFC Bancorp Ltd. (a) 594,500 5,462
Norvestia Oyj (B Shares) 240,000 3,936
16,759
TOTAL FINANCE 869,828
HEALTH - 9.5%
DRUGS & PHARMACEUTICALS - 1.4%
Embrex, Inc. (a) 378,800 5,043
Fuji Pharmaceutical Co. Ltd. 100,000 335
H. Lundbeck AS 60,000 2,317
Herbalife International, Inc.:
Class A 1,037,500 15,303
Class B (non-vtg.) 2,010,500 29,655
Medco Research, Inc. (a) 200,000 6,213
Nature's Sunshine Products, 1,282,500 11,222
Inc. (d)
Quintiles Transnational Corp. 20,000 529
(a)
Riken Vitamin Oil Co. Ltd. 100,000 1,132
Serologicals Corp. (a)(d) 1,025,000 6,983
Theragenics Corp. (a) 690,000 7,029
Trinity Biotech PLC sponsored 65,000 199
ADR (a)
USANA, Inc. (a) 118,000 612
86,572
MEDICAL EQUIPMENT & SUPPLIES
- - 3.6%
Aspect Medical Systems, Inc. 1,000 28
Biomet, Inc. 1,835,000 73,056
Del Global Technologies Corp 777,300 6,267
(a)(d)
DENTSPLY International, Inc. 500,000 12,375
Elscint Ltd. (a)(d) 1,500,000 12,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - CONTINUED
ESC Medical Systems Ltd. 2,150,000 $ 20,963
(a)(d)
Exactech, Inc. (a) 189,600 2,465
Hokuyaku, Inc. 250,000 978
HPSC, Inc. (a) 92,500 798
ICU Medical, Inc. (a)(d) 783,500 13,809
Medstone International, Inc. 561,200 3,227
(a)(d)
Moulin International Holding 4,000,000 365
Ltd.
Ocular Sciences, Inc. (a)(d) 1,608,900 32,580
Orthofix International NV 983,447 14,998
(a)(d)
Respironics, Inc. (a)(d) 2,000,400 22,379
Sybron International, Inc. (a) 30,000 692
Utah Medical Products, Inc. 758,800 5,359
(a)(d)
222,714
MEDICAL FACILITIES MANAGEMENT
- - 4.5%
Community Hospitals Group PLC 350,000 2,403
Corvel Corp. (a)(d) 752,000 18,424
Cryolife, Inc. (a)(d) 670,100 9,716
Health Management Associates, 1,000,000 13,938
Inc. Class A (a)
HEALTHSOUTH Corp. (a) 2,150,000 11,825
Horizon Health Corp. (a)(d) 674,400 4,721
Lincare Holdings, Inc. (a) 100,000 3,544
Quest Diagnostics, Inc. (a) 2,000,000 68,000
Quorum Health Group, Inc. (a) 2,285,000 21,922
Ramsay Health Care Ltd. 1,000,000 649
RehabCare Group, Inc. (a)(d) 665,800 15,688
Res-Care, Inc. (a)(d) 1,471,200 20,229
Safeguard Health Enterprises, 231,500 203
Inc. (a)
Syncor International Corp. (a) 198,500 4,814
United Payors & United 333,500 6,045
Providers, Inc. (a)
United Wisconsin Services, 590,000 2,803
Inc.
Universal Health Services, 1,500,000 67,031
Inc. Class B (a)(d)
US Oncology, Inc. (a) 450,000 2,334
274,289
TOTAL HEALTH 583,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HOLDING COMPANIES - 0.6%
DCC PLC:
(Ireland) 1,000,000 $ 7,521
(United Kingdom) 3,100,000 23,037
Fonciere Financiere et Part SA 25,000 2,062
Perry Group (d) 2,000,000 2,892
35,512
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.2%
ELECTRICAL EQUIPMENT - 2.4%
Aichi Electric Co. Ltd. 1,000,000 1,778
American Power Conversion 2,000,000 55,188
Corp. (a)
Anixter International, Inc. 88,500 1,742
(a)
Bairnco Corp. (d) 900,900 5,856
Blick PLC 1,315,000 7,085
BMC Industries, Inc. 680,000 3,230
C&D Technologies, Inc. 485,600 19,849
Chase Corp. (d) 335,700 3,693
Cobra Electronics Corp. (a)(d) 599,000 3,313
Denyo Co. Ltd. 250,000 1,515
Genlyte Group, Inc. (a)(d) 692,000 13,667
Inaba Denkisangyo Co. Ltd. 725,000 9,449
Northstar Electronics, Inc. 19,500 108
Pittway Corp. Class A 81,000 3,665
Pressac PLC 25,000 107
Rofin Sinar Technologies, 235,000 2,042
Inc. (a)
Sigmatron International, Inc. 218,000 1,363
(a)(d)
Vertex Communications Corp. 511,000 10,763
(a)(d)
Yurtec Corp. 1,150,000 4,111
148,524
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.8%
AGCO Corp. 948,900 11,031
Amadasonoike Co. Ltd. 150,000 303
Baldwin Technology Co., Inc. 245,000 536
Class A (a)
BOLDER Technologies Corp. (a) 231,400 3,211
Chart Industries, Inc. 667,300 2,711
CNH Global NV 715,000 9,921
DT Industries, Inc. 167,100 1,734
Engineered Support Systems, 445,750 6,519
Inc. (d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Fansteel, Inc. (a)(d) 660,000 $ 2,434
Fukushima Industries Corp. 25,000 166
Gardner Denver Machinery, 1,205,600 21,249
Inc. (a)(d)
Gehl Co. (a)(d) 635,000 11,827
Hardinge, Inc. 225,500 2,917
Hirsch International Corp. 655,000 901
Class A (a)(d)
Hughes Supply, Inc. 676,800 11,929
IDEX Corp. 1,428,000 38,378
Kaydon Corp. 600,000 16,238
Linx Printing Technology 380,361 1,770
Oilgear Co. (d) 140,300 1,315
P&F Industries, Inc. Class A 304,000 1,976
(a)(d)
Quipp, Inc. 53,000 822
SAES Getters Spa sponsored ADR 140,000 753
Sansei Transport 800,000 2,577
Shin Nippon Machinery Co. 400,000 681
Ltd.
Specialty Equipment 610,000 10,904
Companies, Inc. (a)
Speizman Industries, Inc. (a) 114,000 499
Strongco, Inc. (a) 110,000 194
TB Wood's Corp. (d) 328,500 3,100
Twin Disc, Inc. (d) 232,400 3,689
Wakita & Co. Ltd. 850,000 2,690
172,975
POLLUTION CONTROL - 0.0%
Tetra Tech, Inc. (a) 95,000 1,401
Weston (Roy F.), Inc. Class A 183,800 405
(a)
1,806
TOTAL INDUSTRIAL MACHINERY & 323,305
EQUIPMENT
MEDIA & LEISURE - 8.0%
BROADCASTING - 2.8%
CanWest Global Communications 1,250,006 13,838
Corp. (sub. vtg.)
Capital Radio PLC 800,000 20,804
Chris-Craft Industries, Inc. 15,400 1,170
Chubu-Nippon Broadcasting Co. 25,000 233
Ltd.
Classic Communications, Inc. 10,000 285
Class A
Cogeco Cable, Inc. (d) 1,000,000 21,517
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Cogeco, Inc. (sub. vtg.) (d) 1,391,500 $ 28,882
Hearst-Argyle Television, 100,000 2,438
Inc. (a)
Moffat Communications Ltd. (d) 2,350,000 37,071
P4 Radio Hele Norge ASA 650,000 4,129
Prime Television Ltd. 1,546,499 1,477
RadioWorks New Zealand Ltd. 300,000 1,175
Regional Cablesystems, Inc. 70,000 787
(a)
Scottish Media Group PLC 400,000 7,690
Scottish Radio Holdings PLC 500,000 12,278
Southern Cross Broadcasting 767,990 4,034
Australia Ltd.
TVA Group, Inc. Class B 1,065,000 15,768
Ulster Television PLC Ord. 10,000 30
173,606
ENTERTAINMENT - 0.4%
Alliance Atlantis 221,500 2,490
Communications Corp.
Alliance Atlantis 50,000 562
Communications Corp. (e)
Allied Leisure PLC 2,000,000 1,163
Lady Luck Gaming Corp. (a)(d) 300,000 3,338
Lakes Gaming, Inc. (d) 1,037,700 9,599
MTR Gaming Group, Inc. (a) 192,700 608
Scientific Games Holdings 349,000 5,780
Corp. (a)
Shingakukai Co. 200,000 680
Television & Media Services 1,000,749 1,243
Ltd.
25,463
LEISURE DURABLES & TOYS - 0.2%
Gametech International, Inc. 20,000 103
(a)
Hamleys PLC 50,000 118
K2, Inc. 291,400 2,113
National R.V. Holdings, Inc. 337,400 5,525
(a)
PlayCore, Inc. (a) 199,815 1,499
9,358
LODGING & GAMING - 0.2%
Choice Hotels International, 230,700 3,821
Inc. (a)
Dover Downs Entertainment, 184,000 2,783
Inc.
Hanover International PLC 483,900 973
Ryan Hotels PLC 3,500,979 2,489
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
ShoLodge, Inc. (a)(d) 311,500 $ 1,227
WMS Industries, Inc. (a) 160,000 1,780
13,073
PUBLISHING - 1.3%
Central Newspapers, Inc. 46,000 1,501
Class A
Fine Art Developments PLC 875,000 3,279
Class L
Harte Hanks Communications, 50,000 1,191
Inc.
Independent Newspapers PLC 375,000 2,906
(United Kingdom)
Johnston Press PLC 1,630,000 8,110
Journal Register Co. (a) 658,400 7,736
Kauppakaari OY 122,800 1,490
Reader's Digest Association, 265,000 10,004
Inc. Class A (non-vtg.)
Roto Smeets de Boer NV 106,885 2,469
Sanoma-WSOY Oyj (a) 315,000 17,607
Southnews PLC 150,000 1,696
Talentum Oyj (B Shares) 625,000 17,892
Trinity Mirror PLC 50,000 552
VLT AB Class B 200,000 2,482
78,915
RESTAURANTS - 3.1%
Applebee's International, 2,140,000 53,634
Inc. (d)
ARK Restaurants Corp. (a)(d) 285,000 2,280
Benihana, Inc. (a)(d) 347,400 5,298
Benihana, Inc. Class A (a)(d) 266,800 3,935
Consolidated Products, Inc. 1,292,600 13,168
(a)
Elxsi Corp. (a)(d) 267,500 3,544
Flanigans Enterprises, Inc. 181,200 838
(d)
IHOP Corp. (a)(d) 1,990,000 32,835
Mikes Restaurants, Inc. (a)(d) 272,500 566
Morton's Restaurant Group, 360,000 5,940
Inc. (a)(d)
Outback Steakhouse, Inc. (a) 406,800 10,068
Papa John's International, 250,000 6,219
Inc. (a)
Restaurant Brands NZ Ltd. 500,000 349
Sizzler International, Inc. 10,000 28
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - CONTINUED
Sonic Corp. (a)(d) 1,925,000 $ 55,344
Sportscene Restaurants, Inc. 30,000 145
Class A
194,191
TOTAL MEDIA & LEISURE 494,606
NONDURABLES - 3.1%
AGRICULTURE - 0.2%
IAWS Group PLC 1,650,000 8,246
IAWS Group PLC Class A (UK 500,000 2,585
Reg.)
Sylvan, Inc. (a) 235,200 2,058
12,889
BEVERAGES - 0.1%
National Beverage Corp. (a) 286,500 2,041
Shikoku Coca-Cola Bottling 125,000 1,466
Co. Ltd.
Sleeman Breweries Ltd. (a) 50,000 202
3,709
FOODS - 0.8%
American Italian Pasta Co. 17,300 474
Class A (a)
Benson's Crisps PLC 1,750,000 2,036
Cagle's, Inc. 217,200 2,389
Corn Products International, 450,000 10,350
Inc.
J&J Snack Food Corp. (a) 55,000 1,052
Monterey Pasta Co. (a) 173,500 629
Nabisco Group Holdings Corp. 1,233,000 10,635
Perkins Foods PLC 1,500,320 2,981
Riviana Foods, Inc. (d) 854,000 13,984
Robert Wiseman Dairies PLC 240,000 368
Shoei Foods Corp. 250,000 1,010
Suprema Specialties, Inc. 398,000 4,129
(a)(d)
Tokatsu Foods Co. 34,000 95
50,132
HOUSEHOLD PRODUCTS - 0.6%
Comany, Inc. 100,000 372
CPAC, Inc. (d) 584,700 4,458
Del Laboratories, Inc. 312,900 2,816
DSG International Ltd. (a)(d) 645,000 3,870
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Helen of Troy Corp. (a)(d) 2,835,000 $ 22,680
IWP International PLC:
(Dublin) (Reg.) 300,000 539
(United Kingdom) (Reg.) 650,000 1,208
Mayborn Group PLC 70,000 66
Paterson Zochonis PLC Class A 50,000 258
(non-vtg.)
Stephan Co. (d) 329,500 1,421
Swallowfield PLC Class L 100,000 113
37,801
TOBACCO - 1.4%
Gallaher Group PLC sponsored 4,075,000 62,653
ADR
RJ Reynolds Tobacco Holdings, 1,225,000 21,055
Inc.
Standard Commercial Corp. (d) 1,248,900 4,371
88,079
TOTAL NONDURABLES 192,610
PRECIOUS METALS - 0.4%
Industrias Penoles SA 4,600,000 12,403
Normandy Mt. Leyshon Ltd. 1,100,000 1,401
Orogen Minerals Ltd. 1,950,000 1,974
Orogen Minerals Ltd. GDR (e) 265,000 2,584
Richmont Mines, Inc. (a)(d) 800,000 946
Ross Mining NL 1,049,311 254
Sons of Gwalia NL 1,680,280 5,136
24,698
RETAIL & WHOLESALE - 7.9%
APPAREL STORES - 2.6%
Braun's Fashions Corp. (a) 204,900 3,458
Chateau Stores of Canada Ltd. 192,900 894
Class A (d)
Chicos Fas, Inc. (a) 300,000 4,425
Claire's Stores, Inc. 2,400,000 45,000
Footstar, Inc. (a)(d) 1,420,200 35,505
Goldlion Holdings Ltd. 1,000,000 99
Kenneth Cole Productions, 515,000 17,059
Inc. Class A (a)(d)
New Look Group PLC (e) 950,000 1,427
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
One Price Clothing Stores, 886,000 $ 2,769
Inc. (a)(d)
Ross Stores, Inc. 2,870,000 36,593
S&K Famous Brands, Inc. (a)(d) 417,500 2,766
Shirmax Fashions Ltd. (a) 450,000 545
The Buckle, Inc. (a) 296,200 4,647
United Retail Group, Inc. (a) 305,700 3,019
158,206
DRUG STORES - 0.6%
Jean Coutu Group, Inc. Class 1,664,600 35,127
A (d)
ProVantage Health Services, 12,500 97
Inc.
35,224
GENERAL MERCHANDISE STORES -
1.5%
Ames Department Stores, Inc. 25,000 522
(a)
Arnotts PLC 100,387 628
BJ's Wholesale Club, Inc. (a) 2,000,000 70,000
Daiwa Co. Ltd. 300,000 628
Jo-Ann Stores, Inc.:
Class A (a) 349,300 3,602
Class B (non-vtg.) (a) 1,085,900 10,859
Shopko Stores, Inc. (a) 230,500 4,221
Stein Mart, Inc. (a) 939,300 4,520
94,980
GROCERY STORES - 1.0%
Delhaize America, Inc. 110,000 1,973
Iceland Group PLC 4,500,000 17,593
Metro Richelieu, Inc. Class A 3,200,000 37,638
(d)
Schultz Sav-O Stores, Inc. (d) 395,100 4,593
Whittard of Chelsea PLC 368,950 358
62,155
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.2%
Advanced Marketing Services, 588,450 9,562
Inc.
Alberto-Culver Co. Class A 350,000 7,481
Blair Corp. (d) 791,100 10,383
Brookstone, Inc. (a)(d) 744,600 12,658
Cameron Ashley Building 726,400 10,033
Products, Inc. (a)(d)
Cole National Corp. Class A 1,058,900 6,817
(d)
Daisytek International Corp. 367,500 7,442
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Farepak PLC 1,000,000 $ 4,766
Finish Line, Inc. Class A 1,891,700 10,877
(a)(d)
Finlay Enterprises, Inc. 1,041,000 13,663
(a)(d)
Friedmans, Inc. Class A (d) 1,343,700 9,385
Grafton Group PLC unit 125,000 2,911
Heiton Holdings PLC 350,000 1,223
HomeBase, Inc. (a) 1,000,000 3,188
Partridge Fine Arts PLC 140,000 154
Piercing Pagoda, Inc. (a)(d) 910,000 11,716
Rex Stores Corp. (a)(d) 524,000 8,057
Sound Advice, Inc. (a)(d) 220,500 2,040
Sportsmans Guide, Inc. (a) 235,000 881
Wilmar Industries, Inc. (a) 205,000 3,588
136,825
TRADING COMPANIES - 0.0%
Mitani Sangyo Co. Ltd. 100,000 436
TOTAL RETAIL & WHOLESALE 487,826
SERVICES - 6.6%
ADVERTISING - 1.2%
InfoUSA, Inc. (a)(d) 3,405,000 47,670
Interep National Radio Sales, 11,300 150
Inc. Class A
R.H. Donnelley Corp. (a) 1,413,500 25,001
72,821
EDUCATIONAL SERVICES - 0.2%
Concorde Career Colleges, 250,000 223
Inc. (a)
Education Management Corp. (a) 125,000 1,516
Institution of General 450,000 1,550
Education Co. (d)
New Horizons Worldwide, Inc. 15,000 221
(a)
Quest Education Corp. (a)(d) 763,000 6,199
SkillSoft Corp. 2,000 28
Up, Inc. 450,000 2,061
11,798
LEASING & RENTAL - 0.3%
Aaron Rents, Inc. Class B 356,800 5,352
Avis Rent A Car, Inc. (a) 120,000 2,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
LEASING & RENTAL - CONTINUED
Cort Business Services Corp. 240,400 $ 6,671
(a)
Gowrings PLC 200,000 339
Nishio Rent All Co. Ltd. 500,000 3,421
Rakentajain Konevuokraamo Oyj 50,000 607
(B Shares)
18,940
PRINTING - 1.6%
Adare Printing Group PLC:
(Ireland) (d) 679,000 4,283
(United Kingdom) (d) 735,004 4,750
Pubco Corp. (a)(d) 319,500 2,556
Reynolds & Reynolds Co. Class 4,000,000 88,500
A (d)
Wyndeham Press Group PLC 550,000 2,515
102,604
SERVICES - 3.3%
ACNielsen Corp. (a) 35,000 718
Chodai Co. Ltd. 200,000 1,154
De La Rue PLC 100,000 460
Diversified Corporate 247,300 649
Resources, Inc. (a)(d)
Eyeful Home Technology, Inc. 200,000 1,387
Gartner Group, Inc.:
Class A 40,000 623
Class B (a) 25,000 341
Holidaybreak PLC 275,000 1,422
Hunting Group PLC 1,850,000 3,168
Interim Services, Inc. (a) 50,000 1,253
Jenny Craig, Inc. (a) 912,600 2,110
NFO Worldwide, Inc. (a) 452,700 9,252
Personnel Group of America, 1,000,000 9,500
Inc. (a)
Pittston Co. - Brinks Group 3,123,009 60,899
(d)
Pre-Paid Legal Services, Inc. 80,000 1,800
(a)
Programming & Systems, Inc. 313,300 0
(a)(d)
RCM Technologies, Inc. (a)(d) 599,700 10,157
RemedyTemp, Inc. Class A 549,400 11,846
(a)(d)
Right Management Consultants, 673,000 8,413
Inc. (a)(d)
Seattle FilmWorks, Inc. (a)(d) 1,635,000 7,971
Staffmark, Inc. (a) 900,600 7,894
Sterile Recoveries, Inc. 331,600 1,990
(a)(d)
Tanabe Management Consulting 200,000 577
Co.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
The Go-Ahead Group PLC 225,000 $ 2,170
Thomas Group (a) 170,900 1,987
Velcro Industries NV 114,500 1,489
Viad Corp. 2,000,000 52,625
Wesco, Inc. 200,000 745
202,600
TOTAL SERVICES 408,763
TECHNOLOGY - 17.9%
COMMUNICATIONS EQUIPMENT - 0.6%
Champion Technology Holdings 100,000 7
Ltd.
KTK Telecommunications 100,000 493
Engineering Co. Ltd.
Kyosan Electric Manufacturing 500,000 1,173
Co. Ltd.
LoJack Corp. (a) 110,500 856
Perceptron, Inc. (a) 233,500 934
Tollgrade Communications, 509,000 29,586
Inc. (a)(d)
Turnstone Systems, Inc. 1,200 35
33,084
COMPUTER SERVICES & SOFTWARE
- - 5.4%
Affiliated Computer Services, 1,000,000 39,750
Inc. Class A (a)
Aladdin Knowledge Systems 315,000 5,906
Ltd. (a)
Analysts International Corp. 100,000 1,256
Avant! Corp. (a) 1,227,600 21,867
Black Box Corp. (a)(d) 1,400,000 82,775
Computer Learning Centers, 1,161,200 2,177
Inc. (a)(d)
Condor Technology Solutions, 134,000 184
Inc. (a)
Cotelligent, Inc. (a) 352,800 1,852
Daitec Co. Ltd. 425,200 6,215
Directrix, Inc. (a) 90,000 529
Fair, Isaac & Co., Inc. 520,000 23,790
GSE Systems, Inc. (a)(d) 353,800 1,548
Infinium Software, Inc. (a) 152,500 867
Informa Group PLC 875,000 8,312
JDA Software Group, Inc. (a) 1,000,000 20,000
Mapics, Inc. (a) 676,000 10,140
Meta Group, Inc. (a) 75,000 1,697
National Data Corp. 5,000 160
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Ontrack Data International, 244,000 $ 1,800
Inc. (a)
Phoenix Technologies Ltd. (a) 1,000,000 20,625
Project Software & 700,000 33,075
Development, Inc. (a)
Prophet 21, Inc. (a) 115,500 1,444
Remedy Corp. (a) 100,000 4,044
RWD Technologies, Inc. (a) 62,000 605
SPSS, Inc. (a)(d) 861,100 22,227
Symantec Corp. (a) 100,000 5,006
Timberline Software Corp. 353,600 4,177
Unigraphics Solutions, Inc. 520,000 12,253
Class A (a)(d)
334,281
COMPUTERS & OFFICE EQUIPMENT
- - 4.3%
Adaptec, Inc. (a) 375,000 19,641
Advanced Digital Information 1,250,000 61,250
Corp. (a)
Amplicon, Inc. 523,400 5,757
Caere Corp. (a) 25,000 219
Cybex Corp. (a)(d) 674,000 35,385
Equinox Systems, Inc. (a)(d) 535,000 5,083
Kronos, Inc. (a)(d) 935,000 56,100
Maezawa Kasei Industries Co. 200,000 3,203
Ltd.
Nam Tai Electronics, Inc. 431,500 5,825
Nam Tai Electronics, Inc. 140,000 144
warrants 11/24/00 (a)
Pomeroy Computer Resources, 1,179,800 19,172
Inc. (a)(d)
PSC, Inc. (a) 60,000 480
Quantum Corp. - DLT & Storage 550,010 5,294
Systems (a)
SBS Technologies, Inc. (a)(d) 495,000 17,696
SED International Holdings, 960,000 1,830
Inc. (a)(d)
Tech Data Corp. (a) 20,000 446
Zebra Technologies Corp. 500,000 29,594
267,119
ELECTRONIC INSTRUMENTS - 1.0%
BTU International, Inc. (a)(d) 603,300 4,148
Cohu, Inc. 300,000 12,375
Halma PLC 750,000 1,393
Hurco Companies, Inc. (a)(d) 379,028 1,469
Intest Corp. (a)(d) 650,000 13,366
Mesa Laboratories, Inc. (a) 125,400 494
MOCON, Inc. 119,600 673
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS -
CONTINUED
Nanometrics, Inc. (a)(d) 561,900 $ 13,486
Reliability, Inc. (a) 635,000 2,153
Sequenom, Inc. 2,100 55
Toko Seiki Co. Ltd. (a) 285,000 769
Wireless Telecom Group, Inc. 1,500,000 6,188
(a)(d)
X-Rite, Inc. 262,000 2,202
58,771
ELECTRONICS - 6.6%
Align-Rite International, 448,000 10,192
Inc. (a)(d)
ASM Pacific Technology Ltd. 3,750,000 7,495
AstroPower, Inc. (a) 170,000 3,910
Bel Fuse, Inc.:
Class A (a) 72,000 1,827
Class B 103,000 2,163
Bell Microproducts, Inc. (a) 265,000 3,246
Bergman & Beving AB Class B 300,000 3,824
Daidensha Co. Ltd. 100,000 577
Dallas Semiconductor Corp. (d) 2,000,000 133,592
Diodes, Inc. (a)(d) 447,400 10,682
Elec & Eltek International 2,000,000 362
Holdings Ltd.
Esterline Technologies Corp. 50,000 559
(a)
General Semiconductor, Inc. 2,236,300 33,265
(a)(d)
Griffon Corp. (a)(d) 2,670,000 19,524
Kingboard Chemical Holdings 7,000,000 2,564
Ltd.
Merix Corp. (a) 225,000 3,150
Methode Electronics, Inc. 1,050,000 35,831
Class A
Micro Linear Corp. (a)(d) 805,000 6,943
Microsemi Corp. (a)(d) 1,100,000 15,950
NU Horizons Electronics Corp. 391,625 4,455
Quantum Effect Devices, Inc. 1,500 24
Siliconix, Inc. (a) 405,000 77,153
Sterling Commerce, Inc. (a) 60,000 1,684
Stoneridge, Inc. (a) 633,700 7,288
Taitron Components, Inc. 544,900 1,584
Class A (a)(d)
Tech-Sym Corp. (a)(d) 455,700 8,829
Techtronic Industries Co. (a) 5,000,000 758
TT Group PLC 3,600,000 6,426
Video Display Corp. (a) 151,600 573
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Wong's International Holdings 10,000,000 $ 2,185
Ltd.
Wong's International Holdings 1,000,000 11
Ltd. warrants 5/31/00 (a)
406,626
PHOTOGRAPHIC EQUIPMENT - 0.0%
Asahi Optical Co. Ltd. 50,000 121
TOTAL TECHNOLOGY 1,100,002
TRANSPORTATION - 3.0%
AIR TRANSPORTATION - 0.9%
AHL Services, Inc. (a) 114,300 1,815
Alpha Airports Group PLC 500,000 533
Ambassadors International, 45,500 501
Inc. (a)
America West Holding Corp. 750,000 13,406
Class B (a)
Mercury Air Group, Inc. (a)(d) 542,940 4,547
Mesaba Holdings, Inc. (a) 353,000 3,795
Midwest Express Holdings, 1,009,600 22,401
Inc. (a)(d)
Transat AT, Inc. (a) 100,000 474
World Fuel Services Corp. (d) 1,249,906 8,593
56,065
RAILROADS - 0.1%
Genesee & Wyoming, Inc. Class 194,800 2,459
A (a)(d)
Westinghouse Air Brake Co. 63,000 701
3,160
SHIPPING - 0.1%
Farstad Shipping ASA 300,000 881
Isewan Terminal Service Co. 1,000,000 2,281
Ltd.
Meiko Transportation Co. Ltd. 500,000 1,792
Ocean Wilsons Holdings Ltd. 600,000 853
Tokyo Kisen Co. Ltd. 500,000 1,648
7,455
TRUCKING & FREIGHT - 1.9%
Air Express International 750,000 24,469
Corp.
Arkansas Best Corp. (a) 322,900 3,834
Arnold Industries, Inc. (d) 1,453,700 19,625
Baltrans Holdings Ltd. 4,900,000 674
Boyd Brothers Transportation, 198,300 1,388
Inc. (a)(d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - CONTINUED
Cannon Express, Inc. Class A 255,100 $ 590
(a)(d)
Covenant Transport, Inc. 134,000 1,792
Class A (a)
Daiwa Logistics Co. Ltd. 300,000 1,592
Goodfellow, Inc. (d) 400,000 2,961
Hub Group, Inc. Class A (a) 50,000 875
Japan Logistic Systems Corp. 300,000 866
Knights Transportation, Inc. 26,000 452
(a)
Landstar System, Inc. (a) 145,000 6,833
Marten Transport Ltd. (a)(d) 447,700 6,604
Old Dominion Freight Lines, 831,200 9,871
Inc. (a)(d)
P.A.M. Transportation 354,700 3,569
Services, Inc. (a)
Trancom Co. Ltd. (d) 332,000 2,627
USFreightways Corp. 750,000 27,281
115,903
TOTAL TRANSPORTATION 182,583
UTILITIES - 1.4%
ELECTRIC UTILITY - 0.2%
Bangor Hydro-Electric Co. 367,400 5,419
Black Hills Corp. 143,000 3,423
Central Vermont Public 207,300 2,280
Service Corp.
Green Mountain Power Corp. 78,600 673
Maine Public Service Co. 80,600 1,360
13,155
GAS - 0.4%
Midcoast Energy Resources, 672,425 10,423
Inc. (d)
Mitchell Energy & Development 97,100 2,185
Corp. Class A
Otaki Gas Co. Ltd. 500,000 1,685
Southwestern Energy Co. (d) 1,740,900 9,901
24,194
TELEPHONE SERVICES - 0.1%
Atlantic Tele-Network, Inc. 490,920 4,418
(d)
WATER - 0.7%
Brockhampton Holdings PLC 4,790,000 6,732
Class A (non-vtg.) (d)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
WATER - CONTINUED
Hyder PLC (d) 8,743,800 $ 35,597
Yorkshire Water PLC 850,000 3,570
45,899
TOTAL UTILITIES 87,666
TOTAL COMMON STOCKS 6,151,116
(Cost $5,573,798)
CONVERTIBLE PREFERRED STOCKS
- - 0.0%
ENERGY - 0.0%
OIL & GAS - 0.0%
Goodrich Petrolem Corp. 73,800 332
Series A, $0.00 (Cost $804)
</TABLE>
CONVERTIBLE BONDS - 0.0%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S)
TECHNOLOGY - 0.0%
COMMUNICATIONS EQUIPMENT - 0.0%
Trans Lux Corp. 7.5% 12/1/06 - $ 535 455
(Cost $618)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 1.2%
SHARES VALUE (NOTE 1) (000S)
Central Cash Collateral Fund, 61,573,090 $ 61,573
5.56% (c)
Taxable Central Cash Fund, 8,428,950 8,429
5.45% (c)
TOTAL CASH EQUIVALENTS 70,002
(Cost $70,002)
TOTAL INVESTMENT PORTFOLIO - 6,221,905
101.0%
(Cost $5,645,222)
NET OTHER ASSETS - (1.0)% (60,077)
NET ASSETS - 100% $ 6,161,828
</TABLE>
LEGEND
(a) Non-income producing
(b) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(c) The rate quoted is the annualized seven-day yield of the fund at
period end.
(d) Affiliated company
(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 $15,350,000
or 0.2% of net assets.
Distribution of investments by country of issue, as a percentage of
net assets, is
as follows:
United States of America 77.9%
Canada 5.6
United Kingdom 4.4
Japan 2.2
Bermuda 2.2
Finland 1.6
Ireland 1.0
Others (individually less 5.1
than 1%)
100.0%
INCOME TAX INFORMATION
At January 31, 2000, the aggregate
cost of investment securities for income
tax purposes was $5,650,422,000. Net unrealized appreciation
aggregated $571,483,000, of which $1,801,345,000 related to
appreciated investment securities and $1,229,862,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) JANUARY
31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 6,221,905
value (cost $5,645,222) -
See accompanying schedule
Foreign currency held at 4,266
value (cost $4,266)
Receivable for investments 25,512
sold
Receivable for fund shares 6,470
sold
Dividends receivable 3,075
Interest receivable 17
Redemption fees receivable 7
Other receivables 212
TOTAL ASSETS 6,261,464
LIABILITIES
Payable for investments $ 2,854
purchased
Payable for fund shares 31,830
redeemed
Accrued management fee 1,923
Other payables and accrued 1,456
expenses
Collateral on securities 61,573
loaned, at value
TOTAL LIABILITIES 99,636
NET ASSETS $ 6,161,828
Net Assets consist of:
Paid in capital $ 5,177,303
Distributions in excess of (17,418)
net investment income
Accumulated undistributed net 425,306
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 576,637
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 280,132 $ 6,161,828
shares outstanding
NET ASSET VALUE, offering $22.00
price and redemption price
per share ($6,161,828
(divided by) 280,132 shares)
Maximum offering price per $22.68
share (100/97.00 of $22.00)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JANUARY 31,
2000 (UNAUDITED)
INVESTMENT INCOME $ 36,893
Dividends (including $16,015
received from affiliated
issuers)
Interest 2,744
Security lending 236
TOTAL INCOME 39,873
EXPENSES
Management fee Basic fee $ 21,663
Performance adjustment 392
Transfer agent fees 8,639
Accounting and security 454
lending fees
Non-interested trustees' 14
compensation
Custodian fees and expenses 370
Registration fees 63
Audit 38
Legal 28
Interest 190
Reports to shareholders 204
Miscellaneous 13
Total expenses before 32,068
reductions
Expense reductions (362) 31,706
NET INVESTMENT INCOME 8,167
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 494,214
(including realized gain
(loss) of $36,094 on sales
of investments in
affiliated issuers)
Foreign currency transactions (462) 493,752
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (804,224)
Assets and liabilities in (321) (804,545)
foreign currencies
NET GAIN (LOSS) (310,793)
NET INCREASE (DECREASE) IN $ (302,626)
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, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 8,167 $ 42,695
income
Net realized gain (loss) 493,752 464,117
Change in net unrealized (804,545) (459,134)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (302,626) 47,678
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (28,894) (77,740)
From net investment income
In excess of net investment (17,418) -
income
From net realized gain (370,015) (752,214)
TOTAL DISTRIBUTIONS (416,327) (829,954)
Share transactions Net 516,845 1,590,582
proceeds from sales of shares
Reinvestment of distributions 398,559 800,524
Cost of shares redeemed (1,737,110) (4,423,505)
NET INCREASE (DECREASE) IN (821,706) (2,032,399)
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 583 1,485
TOTAL INCREASE (DECREASE) (1,540,076) (2,813,190)
IN NET ASSETS
NET ASSETS
Beginning of period 7,701,904 10,515,094
End of period (including $ 6,161,828 $ 7,701,904
under (over) distribution of
net investment income of
$(17,418) and $28,835,
respectively)
OTHER INFORMATION
Shares
Sold 23,112 70,854
Issued in reinvestment of 17,839 39,125
distributions
Redeemed (78,191) (199,036)
Net increase (decrease) (37,240) (89,057)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 24.27 $ 25.87 $ 25.20 $ 19.87 $ 19.25 $ 17.62
of period
Income from Invest- ment
Operations
Net investment income .03 D .12 D .29 D .30 D .26 .20
Net realized and unrealized (.96) .42 2.24 6.93 1.83 3.57
gain (loss)
Total from investment (.93) .54 2.53 7.23 2.09 3.77
operations
Less Distributions
From net investment income (.09) (.20) (.28) (.24) (.23) (.09)
In excess of net investment (.06) - - - - -
income
From net realized gain (1.19) (1.94) (1.58) (1.66) (1.24) (2.05)
Total distributions (1.34) (2.14) (1.86) (1.90) (1.47) (2.14)
Redemption fees added to paid - - - - - -
in capital
Net asset value, end of $ 22.00 $ 24.27 $ 25.87 $ 25.20 $ 19.87 $ 19.25
period
TOTAL RETURN B, C (3.86)% 3.72% 10.53% 39.45% 11.50% 23.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 6,162 $ 7,702 $ 10,515 $ 8,673 $ 4,019 $ 2,947
(in millions)
Ratio of expenses to average .93% A 1.09% .97% 1.02% 1.05% 1.12%
net assets
Ratio of expenses to average .92% A, E 1.08% E .95% E 1.01% E 1.04% E 1.11% E
net assets after expense
reductions
Ratio of net invest- ment .24% A .52% 1.10% 1.36% 1.46% 1.31%
income to average net assets
Portfolio turnover rate 14% A 24% 47% 45% 79% 65%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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, 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES - CONTINUED
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. Foreign governments may also impose
taxes on other payments or transactions with respect to foreign
securities. The fund accrues such taxes as applicable. 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.
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 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,
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.
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 which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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, Federal Agency,
and other obligations found satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management Inc. an affiliate of FMR. The Cash Funds are open-end
money market funds available only to investment companies and other
accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by
the SEC, the fund, along with other registered investment companies
having
2. OPERATING POLICIES - CONTINUED
INTERFUND LENDING PROGRAM - CONTINUED
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing
the fund to borrow from, or lend money to, other participating funds.
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 $480,011,000 and $1,572,182,000, 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 .2167% 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 .64% 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 $470,000 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 .25% of average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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 $86,000 for the
period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The average daily loan balance during the period for which loans were
outstanding amounted to $ 17,815,000. The weighted average interest
rate was 5.61%. Interest expense includes $130,000 paid under the
interfund lending program.
6. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount 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. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $57,588,000. The fund received cash collateral of
$61,573,000 which was invested in cash equivalents.
7. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
loans were outstanding amounted to $13,194,000. The weighted average
interest rate was 5.83%. Interest expense includes $60,000 paid under
the bank borrowing program.
8. 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 $223,000 under this arrangement.
In addition, through arrangements with the fund's custodian and
transfer agent, 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 $17,000 and $122,000, respectively, under these arrangements.
9. 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
Adams Resources & Energy, Inc. $ - $ - $ 42 $ 4,213
Adare Printing Group - - - 4,283
PLC(Ireland)
Adare Printing Group - - 56 4,750
PLC(United Kingdom)
Advanced Digital Information - 3,993 - -
Corp.
Align-Rite International, - - - 10,192
Inc.
Allied Research Corp. - - - 3,666
Alpine Oil Services Corp. - - - -
Applebee's International, Inc. 1,800 2,147 214 53,634
ARK Restaurants Corp. 150 - - 2,280
Arnold Industries, Inc. - 1,405 330 19,625
Asahi Concrete Works Co. Ltd. - - - 3,587
Astronics Corp. 88 - - 4,025
Atlantic Tele-Network, Inc. - - 147 4,418
Autocam Corp. - 253 17 7,400
Aztec Manufacturing Co. 22 - - 4,379
BMTC Group, Inc. Class A - - 57 4,843
(sub-vtg.)
BTU International, Inc. 1,216 - - 4,148
Bairnco Corp. - - 90 5,856
Ballard Medical Products - 23,918 - -
Bank of The Ozarks, Inc.. 91 - 20 3,460
Banyan Strategic Realty Trust - 238 216 4,798
(SBI)
Beazer Homes USA, Inc. - - - 11,626
Benihana, Inc. 15 - - 5,298
Benihana, Inc. Class A - - - 3,935
Bergensbanken ASA - 6,431 - -
Black Box Corp. - 870 - 82,775
Blair Corp. - - 237 10,383
Boyd Brothers Transportation, 55 923 - 1,388
Inc.
Brampton Brick Ltd. Class A 472 - - 2,228
Brookstone, Inc. - - - 12,658
Bush Industries, Inc. Class A - 2,139 92 13,262
CPAC, Inc. - 984 89 4,458
Cameron Ashley Building 286 - - 10,033
Products, Inc.
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Canadian Western Bank $ - $ 3,189 $ 61 $ 7,829
Cannon Express, Inc. Class A 5 - - 590
Castle Energy Corp. - 267 121 10,017
Chase Corp. 174 - 105 3,693
Chase Industries, Inc. - - - 7,720
Chateau Stores of Canada Ltd. - - 11 894
Class A
Cobra Electronics Corp. 440 - - 3,313
Cogeco Cable, Inc. - - 70 21,517
Cogeco, Inc. (sub-vtg.) - - 85 28,882
Cold Metal Products, Inc. 45 - 16 1,163
Cole National Corp. Class A - - 11 6,817
Columbus Energy Corp. - - - 1,730
Computer Learning Centers, - 5,018 - 2,177
Inc.
Concord Fabrics, Inc. Class A - 294 - -
Concord Fabrics, Inc. Class B - 341 - -
Conso International Corp. - 153 - 6,366
Corvel Corp. 2,050 - - 18,424
Cotton States Life Health - - 34 3,257
Insurance Co.
Crossman Communities, Inc. 183 - - 18,835
Cryolife, Inc. - 646 - 9,716
Cybex Corp. 7 635 - 35,385
Dallas Semiconductor Corp. - - 200 133,625
Dawson Geophysical Co. - 332 - 3,445
D.C. Cook Holdings PLC - - - 409
Decorator Industries, Inc. - 706 31 1,013
Del Global Technologies Corp 586 - - 6,267
Desjardins-Laurentian Finance - - 17 4,674
Corp. Class A (sub-vtg.)
Devcon International Corp. 184 - - 1,885
Diodes, Inc. 101 815 - 10,682
Diversified Corporate - 61 - 649
Resources, Inc.
Dominion Homes, Inc. - - - 3,071
Drew Industries, Inc. - 27 - 10,727
DSG International Ltd. - - - 3,870
Ducommun, Inc. - - - 11,845
Elscint Ltd. 351 - - 12,375
Elxsi Corp. - 109 - 3,544
ENEX Resources Corp. - - - 325
Engineered Support Systems, 499 677 9 6,519
Inc.
Engle Homes, Inc. 32 - 121 10,694
Equinox Systems, Inc. 2,035 - - 5,083
Equitrac Corp. - 797 - -
ESC Medical Systems Ltd. - 1,434 - 20,963
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
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SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Fansteel, Inc. $ - $ 371 $ - $ 2,434
Farm Family Holdings, Inc. - 754 - 17,443
Federal Screw Works - - 228 4,678
Financial Industries Corp. 220 - - 2,553
Finish Line, Inc. Class A - - - 10,877
Finlay Enterprises, Inc. 551 - - 13,663
First BanCorp PR - 669 458 50,500
First Commonwealth, Inc. - 1,149 - -
Flanigans Enterprises, Inc. 17 - - 838
Footstar, Inc. - 1,493 - 35,505
Foremost Industries, Inc. - - - 680
Friedmans, Inc. Class A - - 34 9,385
FRM Nexus, Inc. - - - 220
GBC Bancorp 62 1,031 120 11,402
Gardner Denver Machinery, Inc. 923 - - 21,249
Gehl Co. - - - 11,827
General Semiconductor, Inc. - 10,224 - 33,265
Genesee & Wyoming, Inc. Class 130 - - 2,459
A.
Genlyte Group, Inc.. 108 - - 13,667
Giant Cement Holding, Inc. 3,960 8,285 - -
Goodfellow, Inc. 154 - 81 2,961
Griffon Corp. - 284 - 19,524
GSE Systems, Inc. 103 - - 1,548
Hampshire Group Ltd. - - - 3,592
Hanmi Bank 1,913 - - 6,303
Healthcare Recoveries, Inc. 481 - - 5,145
Helen of Troy Corp. 1,226 - - 22,680
Herbalife International, Inc. - - - -
Class A
Hirsch International Corp. - - - 901
Class A
Holly Corp. - - 281 11,138
Home Port Bancorp, Inc. 351 - 65 3,783
Horizon Health Corp. 232 - - 4,721
Hurco Companies, Inc. - - - 1,469
Hyder PLC 1,909 - 940 35,597
ICU Medical, Inc. 775 - - 13,809
IDEX Corp. - 800 210 -
IHOP Corp. 3,126 54 - 32,835
Independence Federal Savings - - - 1,202
Bank
InfoUSA, Inc. Class A 9,393 1,653 - 47,670
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Institution of General $ - $ - $ 18 $ 1,550
Education Co.
Intercontinental Life Corp. 44 - - 8,342
Intest Corp. 8 28 - 13,366
IPC Holdings Ltd. - - 1,195 34,416
JDA Software Group Inc. - 1,263 - -
Jean Coutu Group, Inc. Class A - 199 97 35,127
JLM Couture, Inc. - - - 386
Kenneth Cole Productions, - 3,154 - 17,059
Inc. Class A
Kentucky Electric Steel, Inc. 615 - - 942
Koss Corp. - 734 - 2,048
Kronos, Inc. - 1,517 - 56,100
Lai Worldwide, Inc. - 3,094 - -
Lady Luck Gaming Corp. 272 - - 3,338
Lakes Gaming, Inc. 2,330 - - 9,599
Lasalle Re Holdings Ltd. - - - 19,347
Life USA Holding, Inc. - 3,368 - -
M/I Schottenstein Homes, Inc. - - 88 11,440
Mark VII, Inc. - 3,266 - -
Markwest Hydrocarbon, Inc. 64 - - 3,511
Marten Transport Ltd. - - - 6,604
Maynard Oil Co. 968 12 - 5,489
Medstone International, Inc. - - - 3,227
Mercury Air Group, Inc. - 519 - 4,547
Metro Richelieu, Inc. Class A - - 240 37,638
Micro Linear Corp. - 4,849 - 6,943
Microsemi Corp. - 687 - 15,950
Midcoast Energy Resources, - - - 10,423
Inc.
Midwest Express Holdings, Inc. 844 1,565 - 22,401
Mikes Restaurants, Inc. - - - 566
MMI Companies, Inc. - 196 228 11,173
Moffat Communications Ltd. - 210 95 37,071
Monro Muffler Brake, Inc. 974 15 - 6,510
Morton's Restaurant Group, - - - 5,940
Inc.
Movado Group, Inc. 26 - 47 17,974
Murakami Corp. 64 - 26 5,206
MYR Group, Inc. 1,452 - 45 17,671
Nanometrics, Inc. - 3,184 - 13,486
National Western Life - - - 11,900
Insurance Co. Class A
Nature's Sunshine Products, 1,145 - 76 11,222
Inc.
Nautica Enterprises, Inc.. - - - 32,264
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Nordlandsbanken AS $ - $ - $ - $ 8,324
Novus Petroleum Ltd. 652 - - 9,683
Nu Horizons Electronics Corp. - - - -
Oakwood Homes Corp. - 14,203 59 7,425
Octel Corp. - - - 16,192
Ocular Sciences, Inc. 7,994 - - 32,580
OEC Medical Systems, Inc. - 6,068 - -
Oilgear Co. 41 - 19 1,315
Old Dominion Freight Lines, - - - 9,871
Inc.
One Price Clothing Stores, 1,029 - - 2,769
Inc.
Oriole Homes Corp. Class B - - - 376
Orthofix International NV 426 - - 14,998
P & F Industries, Inc. Class A 120 - - 1,976
PXRE Corp. 3,237 - 44 8,610
Patrick Industries, Inc. - 2,247 44 5,324
PAULA Financial 184 - 47 3,329
Peak International Ltd. 2,348 - - 10,169
Pe Ben Oilfield Services Ltd. - - - 849
Perry Ellis International, - - - 5,183
Inc.
Perry Group 251 - 115 2,892
Petroleum Development Corp. - - - 6,984
Philadelphia Consolidated 1,545 - - 15,853
Holding Corp.
Piercing Pagoda, Inc. - - - 11,716
Piolax, Inc. 700 - 61 5,725
Pittston Co. (BAX Group) 622 12,338 197 -
Pittston Co. Brink's Group 992 - - 60,899
Pomeroy Computer Resources, 239 - - 19,172
Inc.
Powell Industries, Inc. - 2,777 - 4,637
Programming & Systems, Inc. - - - -
Pubco Corp. - - - 2,556
Quest Diagnostics, Inc. - - - -
Quest Education Corp. 37 - - 6,199
Quicks Group PLC - - 227 3,910
Quixote Corp. 287 - 104 10,017
Raytech Corp. - 36 - 1,152
RCM Technologies, Inc. 927 - - 10,157
Redwood Trust, Inc. - 360 402 12,568
RehabCare Group, Inc. 257 - - 15,688
Reliability, Inc. - - - 2,153
Remedy Corp. - 1,000 - -
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
RemedyTemp, Inc. Class A $ 490 $ - $ - $ 11,846
Res-Care, Inc. 1,466 - - 20,229
Respironics, Inc. - 2,426 - 22,379
Rex Stores Corp. - 326 - 8,057
Reynolds & Reynolds Co. Class 1,819 - 830 88,500
A
Richardsons Westgarth PLC - - 29 3,697
Richmont Mines, Inc. - - - 946
Right Management Consultants, - - - 8,413
Inc.
Ringkjoebing Bank - - - 2,783
Riviana Foods, Inc. 292 - 226 13,984
Robertson Ceco Corp. - - - 9,985
RPC, Inc. 101 - 194 24,002
S&K Famous Brands, Inc. - 25 - 2,766
SPSS, Inc. 88 111 - 22,227
Safeguard Health Enterprises, - 2,977 - -
Inc.
SBS Technologies, Inc. 99 123 - 17,696
Schultz Sav-O Stores, Inc.. - - 71 4,593
Seattle FilmWorks, Inc. - - - 7,971
SED International Holdings, - - - 1,830
Inc.
Serologicals Corp. - 2,550 - 6,983
ShoLodge, Inc. - - - 1,227
Sigmatron International, Inc. 509 - - 1,363
Sonic Corp. - - - 55,344
Sons of Gwalia NL. 144 - 132 5,136
Sound Advice, Inc. 68 - - 2,040
Southern Energy Homes, Inc. - 12 - 2,583
Southwestern Energy Co. - - 209 9,901
Sparebanken Rana - - - 693
Grunnfondsbevis
Speizman Industries, Inc. - 246 - -
Standard Commercial Corp. - - 125 4,371
Stanley Furniture Co., Inc. 140 - - 12,638
Stantec, Inc. 956 - - 5,279
Stephan Co. - - 13 1,421
Sterile Recoveries Inc. 23 - - 1,990
Sterling Bancorp 702 - 148 9,513
Stirling Cooke Brown Holdings 11 - 48 1,991
Ltd.
Strattec Security Corp. 1,658 - - 17,976
</TABLE>
9. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE
Superior Energy Services, Inc. $ - $ - $ - $ -
Suprema Specialties, Inc. - 355 - 4,129
Swift Energy Co. - - - 22,325
TBC Corp. 1,474 - - 12,176
TB Wood's Corp. - 6 59 3,100
Taitron Components, Inc. - 60 - 1,584
Class A
Talentum Oyj (B Shares) - 947 - -
Tandy Brands Accessories, Inc. - - - 8,609
Tech-Sym Corp. 433 128 - 8,829
Terra Nova (Bermuda) Holdings 412 607 216 40,536
Ltd. Class A.
Toami Corp. - - - 1,841
Todhunter International, Inc. - 249 - -
Tollgrade Communications, Inc. - - - 29,586
Trancom Co. Ltd.. - - - 2,627
Transpro, Inc. - - 66 3,924
Twin Disc, Inc. - - 81 3,689
UCBH Holdings, Inc. 1,666 - - 13,953
UICI 447 1,047 - 28,045
Unico American Corp. - 567 - -
Unigraphics Solutions, Inc. - 434 - 12,253
Class A
Uni-Select, Inc.. - 621 69 10,662
Universal Health Services, - - - 67,031
Inc. Class B
Up, Inc. - - - 2,061
URS Corp. 345 - - 22,033
USEC, Inc. 252 - 4,734 45,308
U.S. Home Corp. 5,861 - - 21,825
Utah Medical Products, Inc. - - - 5,359
Vertex Communications Corp. - - - 10,763
Video Display Corp. - 210 - -
Western Beef, Inc. - 1,556 - -
Willbros Group, Inc. - 733 - -
Winsloew Furniture, Inc. - 2,208 - -
Winston Resources, Inc. - 738 - -
Wireless Telecom Group, Inc. - 1,862 - 6,188
World Fuel Services Corp. - - 125 8,593
Wynn's International, Inc. 446 596 250 27,775
TOTALS $ 87,117 $ 174,178 $ 16,015 $ 2,874,298
</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 Automated Service Telephone 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)FIDELITY AUTOMATED
SERVICE TELEPHONE (FASTSM)
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 1-800-544-0240 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-ADVISER
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
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.
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* INDEPENDENT TRUSTEES
LPS-SANN-0300 95615
1.700505.102
CUSTODIAN
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THE FIDELITY TELEPHONE CONNECTION
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FIDELITY(REGISTERED TRADEMARK)
BALANCED
FUND
SEMIANNUAL REPORT
JANUARY 31, 2000
(2_FIDELITY_LOGOS)(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 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 31 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 35 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 1-800-544-6666 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While no major Y2K glitches disrupted the financial markets to start
the new year, inflation worries re-emerged to hinder stock performance
throughout January. The S&P 500(Registered trademark) and Dow Jones
Industrial Average each fell approximately 5%, while the
technology-oriented NASDAQ Index dropped more than 3% for the month.
In bond markets, the potential for further rate hikes as a pre-emptive
move against inflation continued to be an obstacle to fixed-income
performance.
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 1-800-544-6666, 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, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY BALANCED -1.87% 3.09% 98.20% 216.62%
Fidelity Balanced Income -2.90% 1.02% 104.55% 229.03%
Composite
LB Aggregate Bond 0.66% -1.85% 41.84% 111.74%
S&P 500 (registered trademark) 5.59% 10.35% 225.05% 442.52%
Balanced Funds Average 2.11% 4.09% 104.82% 214.01%
</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 Income Composite Index - a hypothetical
combination of unmanaged indices combining the total returns of the
Russell 3000 Value Index and the Lehman Brothers Aggregate Bond Index
using a weighting of 60% and 40%, respectively. 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 473 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, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY BALANCED 3.09% 14.66% 12.22%
Fidelity Balanced Income 1.02% 15.39% 12.65%
Composite
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 60/40 RS 3000V/LB Aggr.
S&P 500 LB Aggregate Bond
00304 F0164
SP001 LB001
1990/01/31 10000.00 10000.00
10000.00 10000.00
1990/02/28 10073.06 10163.78
10129.00 10032.00
1990/03/31 10155.25 10238.02
10397.42 10039.02
1990/04/30 10016.39 9962.29
10137.48 9946.66
1990/05/31 10349.65 10563.35
11125.89 10241.08
1990/06/30 10395.69 10496.36
11050.23 10405.97
1990/07/31 10423.84 10487.41
11014.87 10549.57
1990/08/31 9982.87 9865.99
10019.13 10408.20
1990/09/30 9819.78 9601.42
9531.20 10494.59
1990/10/31 9772.20 9556.03
9490.21 10627.87
1990/11/30 10114.75 10033.37
10103.28 10856.37
1990/12/31 10335.26 10250.51
10385.16 11025.73
1991/01/31 10763.06 10590.30
10837.95 11162.45
1991/02/28 11249.20 11062.25
11612.87 11257.33
1991/03/31 11464.36 11209.66
11893.90 11335.01
1991/04/30 11651.50 11307.95
11922.44 11457.43
1991/05/31 12025.76 11590.78
12437.49 11523.88
1991/06/30 11807.11 11293.84
11867.86 11518.12
1991/07/31 12116.25 11633.24
12420.90 11678.22
1991/08/31 12395.47 11866.24
12715.27 11930.47
1991/09/30 12500.97 11914.27
12502.93 12172.66
1991/10/31 12780.61 12083.06
12670.47 12307.77
1991/11/30 12552.75 11760.55
12159.85 12421.00
1991/12/31 13103.20 12482.85
13550.93 12789.91
1992/01/31 13103.20 12466.64
13298.89 12615.97
1992/02/29 13294.18 12694.40
13471.77 12697.97
1992/03/31 13209.43 12557.53
13209.07 12626.86
1992/04/30 13370.52 12887.46
13597.42 12717.77
1992/05/31 13617.53 13035.09
13664.05 12958.14
1992/06/30 13574.83 13044.09
13460.45 13136.96
1992/07/31 13900.88 13452.22
14010.98 13404.96
1992/08/31 13976.96 13266.61
13723.76 13540.35
1992/09/30 14073.66 13443.13
13885.70 13701.48
1992/10/31 14006.22 13393.19
13934.30 13519.25
1992/11/30 14039.94 13676.60
14409.46 13521.95
1992/12/31 14144.32 13970.89
14586.70 13736.95
1993/01/31 14455.06 14338.27
14709.22 14000.70
1993/02/28 14846.36 14718.96
14909.27 14245.71
1993/03/31 15319.81 15009.97
15223.86 14305.54
1993/04/30 15808.74 14928.35
14855.44 14405.68
1993/05/31 16064.85 15124.39
15253.56 14424.41
1993/06/30 16077.52 15424.51
15297.80 14685.49
1993/07/31 16289.37 15568.10
15236.61 14769.20
1993/08/31 16819.01 16016.80
15814.08 15027.66
1993/09/30 16657.05 16068.90
15692.31 15068.23
1993/10/31 16792.67 16106.93
16017.14 15123.99
1993/11/30 16496.77 15848.36
15864.97 14995.43
1993/12/31 16870.98 16072.56
16056.94 15076.41
1994/01/31 17324.56 16522.20
16602.88 15279.94
1994/02/28 17022.17 16097.63
16152.94 15014.07
1994/03/31 16323.52 15572.21
15448.67 14643.22
1994/04/30 16183.57 15692.91
15646.41 14526.08
1994/05/31 16209.01 15788.88
15903.02 14524.62
1994/06/30 16041.81 15546.26
15513.39 14492.67
1994/07/31 16349.33 15947.78
16022.23 14781.07
1994/08/31 16503.08 16240.91
16679.14 14798.81
1994/09/30 16387.04 15844.90
16270.50 14581.27
1994/10/31 16193.50 15938.94
16636.59 14568.15
1994/11/30 15961.24 15538.59
16030.68 14536.10
1994/12/31 15974.43 15706.75
16268.42 14636.39
1995/01/31 15974.43 16085.77
16690.26 14926.19
1995/02/28 16325.37 16618.07
17340.68 15281.44
1995/03/31 16599.94 16860.17
17852.40 15374.66
1995/04/30 16770.54 17272.33
18378.16 15589.90
1995/05/31 17085.48 17954.78
19112.73 16193.23
1995/06/30 17271.95 18174.83
19556.72 16311.44
1995/07/31 17524.19 18540.25
20205.22 16275.55
1995/08/31 17564.02 18804.50
20255.94 16472.49
1995/09/30 17722.58 19261.21
21110.74 16632.27
1995/10/31 17561.47 19212.08
21035.37 16848.49
1995/11/30 18058.24 19898.94
21958.82 17101.22
1995/12/31 18355.11 20317.20
22381.75 17340.64
1996/01/31 18518.03 20721.88
23143.63 17455.08
1996/02/29 18178.62 20681.09
23358.17 17151.37
1996/03/31 18032.11 20838.65
23583.11 17031.31
1996/04/30 18087.05 20867.42
23930.72 16935.93
1996/05/31 18210.65 21022.63
24547.89 16902.06
1996/06/30 18348.92 21130.32
24641.42 17128.55
1996/07/31 17918.33 20653.27
23552.76 17174.79
1996/08/31 18126.68 21012.83
24049.49 17145.60
1996/09/30 18716.02 21643.46
25403.00 17443.93
1996/10/31 19320.22 22300.81
26103.61 17831.19
1996/11/30 20261.64 23397.88
28076.78 18136.10
1996/12/31 20069.18 23196.14
27520.58 17967.43
1997/01/31 20639.33 23851.47
29240.07 18023.13
1997/02/28 20853.13 24077.97
29469.31 18068.19
1997/03/31 20316.89 23464.99
28258.42 17867.63
1997/04/30 20820.85 24158.38
29945.44 18135.65
1997/05/31 21857.57 25094.08
31768.52 18307.94
1997/06/30 22611.00 25871.20
33191.75 18525.80
1997/07/31 23977.84 27267.31
35832.82 19026.00
1997/08/31 23265.34 26672.50
33825.47 18864.28
1997/09/30 24378.30 27807.26
35678.09 19143.47
1997/10/31 23885.50 27503.55
34486.44 19421.05
1997/11/30 24316.70 28228.76
36082.82 19510.38
1997/12/31 24774.85 28844.99
36702.36 19707.44
1998/01/31 25050.67 28741.04
37108.29 19959.69
1998/02/28 26056.59 29881.19
39784.53 19943.73
1998/03/31 27004.27 30982.49
41821.90 20011.54
1998/04/30 27184.30 31168.14
42242.63 20115.60
1998/05/31 27118.83 30972.59
41516.48 20306.69
1998/06/30 27628.32 31283.60
43202.88 20478.96
1998/07/31 27463.47 30877.31
42742.77 20522.42
1998/08/31 24990.77 28309.20
36563.02 20856.45
1998/09/30 26420.59 29547.75
38905.24 21344.74
1998/10/31 27591.24 30787.92
42069.80 21232.12
1998/11/30 28635.82 31689.31
44619.65 21352.37
1998/12/31 29783.72 32370.65
47190.63 21416.58
1999/01/31 30712.19 32571.32
49164.14 21569.55
1999/02/28 30257.06 31987.19
47636.12 21192.95
1999/03/31 31349.16 32414.97
49542.04 21310.54
1999/04/30 32905.63 34269.68
51460.81 21378.09
1999/05/31 32374.60 33982.91
50245.82 21189.96
1999/06/30 32872.69 34542.02
53034.46 21122.29
1999/07/31 32264.61 33885.24
51378.72 21033.58
1999/08/31 31914.51 33125.49
51124.40 21022.89
1999/09/30 31442.06 32606.27
49723.08 21266.85
1999/10/31 31628.23 33670.34
52869.56 21345.31
1999/11/30 31566.18 33529.00
53944.39 21343.82
1999/12/31 32421.46 33595.70
57121.72 21240.91
2000/01/31 31661.58 32903.07
54251.92 21174.00
IMATRL PRASUN SHR__CHT 20000131 20000228 111108 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Balanced Fund on January 31, 1990. As the chart
shows, by January 31, 2000, the value of the investment would have
grown to $31,662 - a 216.62% increase on the initial investment. For
comparison, look at how both the Standard & Poor's 500SM 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
500 Index would have grown to $54,252 - a 442.52% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,174 - a 111.74% increase. You can also look at how
the Fidelity Balanced Income Composite Index did over the same period.
The composite index combines the total returns of the Russell 3000
Value Index and the Lehman Brothers Aggregate Bond Index, and assumes
monthly rebalancing of the mix. With dividends and interest, if any,
reinvested, the same $10,000 would have grown to $32,903 - a 229.03%
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
Technology stocks and interest rates.
The former continued to rally during
the six months that ended January 31,
2000, ensuring that overall stock
market performance was up. The
latter, meanwhile, held back returns
in most non-technology sectors, and
conspired to make it a difficult
period for bond investors. Despite
the fact that the Federal Reserve
Board raised interest rates once in
August and again in November,
equity investors continued to gobble
up technology stocks, particularly
those with an Internet theme. To
illustrate the sector's dominance,
the technology-oriented NASDAQ
Index returned an eye-popping
49.52% return during the six-month
period. The Standard & Poor's 500
Index - a more expansive measure
of stock performance - returned
5.59%. While tech stocks were
spreading their magic throughout the
equity market, interest rates were
busy suppressing bond
performance. The Lehman Brothers
Aggregate Bond Index - a broad
measure of the U.S. taxable
investment-grade bond market -
returned 0.66% during the six-month
period. Yield-spread sectors such as
corporate and mortgage-backed
bonds were clearly favored over
Treasuries during this stretch, as yield
spreads for each narrowed due to
weaker-than-expected supply for
corporates and declining
prepayments for mortgages.
(photograph of Kevin Grant)(photograph of Stephen DuFour)
(photograph of Robert Ewing)
NOTE TO SHAREHOLDERS: On February 1, 2000, Robert Ewing (bottom)
became manager of Fidelity Balanced Fund's equity subportfolio. The
following is an interview with Stephen DuFour (right), who managed the
equity portion during the period covered by this report; and with
Kevin Grant (left), manager for fixed-income investments; as well as
additional comments from Robert Ewing.
Q. HOW DID THE FUND PERFORM, STEVE?
S.D. For the six and 12 months that ended January 31, 2000, the fund
returned -1.87% and 3.09%, respectively. Considering the fund's mix of
stocks and bonds, its performance typically falls somewhere between
that of its benchmark - the Standard & Poor's 500 Index - and that of
the Lehman Brothers Aggregate Bond Index. We also look at how the fund
did against the Fidelity Balanced Income Composite Index, a
hypothetical combination of unmanaged indexes combining the total
returns of the Russell 3000 Value Index and the Lehman Brothers
Aggregate Bond Index using a weighting of 60% and 40%, respectively.
This index returned -2.90% and 1.02% for the six- and 12-month
periods, respectively. Returns for the S&P 500 over the same periods
were 5.59% and 10.35%, respectively, while the Lehman Brothers index
returned 0.66% and -1.85%, respectively. Fund performance is also
compared to the balanced funds average tracked by Lipper Inc., which
posted returns of 2.11% and 4.09%, respectively, for the same time
periods.
Q. WHY DID THE FUND TRAIL ITS BENCHMARK AS WELL AS ITS PEERS DURING
THE SIX-MONTH PERIOD?
S.D. The past six months were unique in the sense that a single
sector, technology, fueled the market's advances. Since I stayed true
to form, running the fund with a large-cap value orientation, I held a
much smaller stake in tech than the S&P 500, and was thus unable to
match its level of performance during the period. Within the tech
sector, I continued to try to pick names that offered value, which was
incredibly difficult to do in a sector that was experiencing such high
valuations. A collapse in top-10 holding Unisys after it announced
Y2K-related shortfalls in October also proved particularly damaging to
fund returns. Our overexposure to financial stocks during a period of
rising interest rates further detracted from performance. The fund's
bond subportfolio provided some relief, but not enough to erase our
losses on the equity side. It was an uphill battle on the Lipper
front, as most of our peers made the decision to run their funds with
a growth to an aggressive-growth bias, which paid off handsomely for
them.
Q. HOW DID SOME OF YOUR OTHER STRATEGIES PLAY OUT FOR THE FUND?
S.D. I added selectively to the fund's financial holdings, which
appeared to be reaching good value levels after a period of extended
decline. I chose to take profits in selected holdings within the media
and leisure group, and subsequently added to others. I've been a big
believer in the rollout of digital cable, and I think a number of the
large media companies are going to be big beneficiaries of higher
bandwidth - speed and capacity of data delivery - to the home.
Additionally, many of these firms - Disney, for example - are starting
to look a lot healthier of late, which bodes well for us. In energy, I
remained bullish on the energy services side, as I believed it would
require a lot of capital spending in order to return the price of oil
back to normalized levels.
Q. WHICH STOCKS CONTRIBUTED TO PERFORMANCE? WHICH DETRACTED?
S.D. The stocks that helped me the most were the ones that most likely
wouldn't be considered large-cap value names, though they offered good
relative value versus their sectors. Take Motorola, for example, which
enjoyed a nice recovery on the back of strong digital handset sales
and increased competitiveness with market leaders Nokia and Ericsson.
Disney rebounded on sharply higher earnings attributed to strength in
its broadcasting and film divisions. Microsoft was an opportunistic
purchase that paid off, as investors bid down the stock following an
anti-trust ruling against the firm. Alcoa benefited from improving
worldwide economic conditions. On the downside, SBC Communications'
earnings felt the pinch of increased spending related to the rollout
of new DSL - digital subscriber line - technologies, the primary
competitor of digital cable. Fannie Mae was felled by sharply higher
interest rates, as well as the Federal Reserve Board's desire to slow
down the economy, which was expected to hurt home sales. Navistar
stumbled on declining new orders for heavy-duty trucks.
Q. KEVIN, HOW DID THE BOND PORTION OF THE FUND PERFORM?
K.G. Bonds faced a stiff challenge, as interest rates rose steadily
over the course of the period - clearly not a good recipe for success
for most bond funds. In managing this fund's fixed-income investments,
however, I relied on sector allocation to gain exposure to a strong
recovery in the spread sectors - namely, corporate bonds and mortgage
securities. This strategy provided an advantage over the
Treasury-heavy Lehman Brothers index, as these securities outperformed
their government counterparts during the six-month period. The
mortgage sector benefited from favorable prepayment levels, as well as
declining interest-rate volatility later in the period. Within
corporates, we found ourselves in the right areas of the market. Our
positioning in various media, telecommunications and energy names
proved particularly beneficial for the fund's bond subportfolio.
Q. TURNING TO YOU, BOB, WHAT'S YOUR OUTLOOK?
B.E. I intend to proceed with caution given what the Fed is doing to
slow things down a bit, which traditionally provides a very stiff head
wind from an investing standpoint. Overall, the market is behaving
like you'd expect, with the exception of the technology sector and
defensive-type stocks - or those that are seemingly more resilient in
the face of changing economic conditions. Defensive issues aren't
acting defensively and are, thus, struggling because the market seems
content to be on offense. Regardless of market sentiment, I expect the
fund to continue pursuing its valuation emphasis. So, even though
we're fighting a pure-growth market, we're bound to experience a
market change as time wears on. There are several attractive value
opportunities developing in the marketplace, which haven't meant much
to anyone in a long time, and may not in the coming months. But
history dictates that at some point it will, and when it does, the
fund will be poised to benefit.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: income and capital
growth consistent with
reasonable risk
FUND NUMBER: 304
TRADING SYMBOL: FBALX
START DATE: November 6, 1986
SIZE: as of January 31,
2000, more than $5.9
billion
MANAGER: Robert Ewing,
since February, 2000;
manager, Fidelity Advisor
Financial Services Fund,
1998-2000; various Fidelity
Select Portfolios,
1996-2000; joined Fidelity
in 1990; Kevin Grant, since
1997; joined Fidelity in
1993
BOB EWING ON HIS
INVESTMENT PHILOSOPHY:
"I feel that my investment style fits
pretty well with the spirit of this
fund, as I tend to have a value
orientation. That's one of the
primary screens through which I
put most prospective investments.
I've traditionally run a more
aggressive portfolio on an
individual stock selection basis
than I have from an industry
selection perspective. In fact,
on average, I tend to run close to
neutral on industry weighting. I
gain the most value from
individual stock picking. I also
work closely with a talented
research organization here at
Fidelity on company-by-company
analysis.
"When it comes down to it, I'm
not afraid to sell something
that I think has some fundamental
deterioration that, in my opinion,
changes its outlook."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Exxon Mobil Corp. 3.1 5.1
AT&T Corp. 2.3 1.5
Weatherford International, Inc. 1.8 2.0
SBC Communications, Inc. 1.7 1.6
BellSouth Corp. 1.6 0.7
10.5 10.9
TOP FIVE BOND ISSUERS AS OF
JANUARY 31, 2000
(WITH MATURITIES GREATER THAN % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
ONE YEAR) MONTHS AGO
Fannie Mae 10.1 10.3
U.S. Treasury Obligations 8.4 5.3
Government National Mortgage 2.9 3.0
Association
Equity Office Properties Trust 0.4 0.4
Avon Energy Partners Holdings 0.4 0.4
22.2 19.4
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 17.2 17.7
UTILITIES 10.6 9.2
TECHNOLOGY 7.6 8.1
MEDIA & LEISURE 6.9 6.4
ENERGY 6.6 9.4
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JANUARY 31, 2000 * AS OF JULY 31, 1999 **
Stocks 56.6% Stocks 59.4%
Bonds 35.5% Bonds 34.4%
Short-Term Investments and Short-Term Investments and
Net Other Assets 7.9% Net Other Assets 6.2%
* FOREIGN INVESTMENTS 2.6% ** FOREIGN INVESTMENTS 3.0%
Row: 1, Col: 1, Value: 56.6 Row: 1, Col: 1, Value: 59.4
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 35.5 Row: 1, Col: 4, Value: 34.4
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 7.9 Row: 1, Col: 8, Value: 6.2
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS JANUARY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 56.6%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.9%
Boeing Co. 1,143,200 $ 50,658
Textron, Inc. 70,000 4,178
54,836
BASIC INDUSTRIES - 2.6%
CHEMICALS & PLASTICS - 1.7%
Avery Dennison Corp. 88,900 6,023
Dow Chemical Co. 129,500 15,087
E. I. du Pont de Nemours and 380,703 22,461
Co.
PPG Industries, Inc. 500,800 27,575
Rohm & Haas Co. 737,800 31,172
102,318
IRON & STEEL - 0.2%
AK Steel Holding Corp. 224,300 2,271
USX - U.S. Steel Group 307,100 7,639
9,910
METALS & MINING - 0.5%
Alcoa, Inc. 275,800 19,220
Phelps Dodge Corp. 182,400 10,602
29,822
PAPER & FOREST PRODUCTS - 0.2%
Bowater, Inc. 100,000 5,169
International Paper Co. 64,600 3,077
Weyerhaeuser Co. 64,600 3,706
11,952
TOTAL BASIC INDUSTRIES 154,002
CONSTRUCTION & REAL ESTATE -
0.5%
BUILDING MATERIALS - 0.2%
Fortune Brands, Inc. 350,000 10,150
CONSTRUCTION - 0.1%
Centex Corp. 182,000 4,004
Pulte Corp. 125,000 2,180
6,184
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Equity Office Properties Trust 543,000 $ 13,880
TOTAL CONSTRUCTION & REAL 30,214
ESTATE
DURABLES - 2.2%
AUTOS, TIRES, & ACCESSORIES -
1.5%
Danaher Corp. 228,400 9,850
Ford Motor Co. 286,600 14,258
Navistar International Corp. 1,630,000 64,079
(a)
88,187
CONSUMER DURABLES - 0.5%
Minnesota Mining & 287,300 26,898
Manufacturing Co.
TEXTILES & APPAREL - 0.2%
NIKE, Inc. Class B 312,000 14,196
TOTAL DURABLES 129,281
ENERGY - 6.4%
ENERGY SERVICES - 2.5%
Helmerich & Payne, Inc. 250,000 5,875
Noble Drilling Corp. (a) 1,183,400 34,688
Weatherford International, 2,788,400 104,739
Inc. (a)
145,302
OIL & GAS - 3.9%
Amerada Hess Corp. 150,000 7,978
Chevron Corp. 275,400 23,013
Exxon Mobil Corp. 2,222,200 185,554
Kerr-McGee Corp. 238,600 13,212
Sunoco, Inc. 150,000 3,459
233,216
TOTAL ENERGY 378,518
FINANCE - 13.8%
BANKS - 4.4%
Bank of America Corp. 572,300 27,721
Bank One Corp. 1,100,000 32,794
Chase Manhattan Corp. 883,300 71,050
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Firstar Corp. 950,000 $ 22,681
Marshall & Ilsley Corp. 40,000 2,050
Mellon Financial Corp. 1,554,000 53,322
Northern Trust Corp. 237,000 14,309
PNC Financial Corp. 252,500 12,120
SunTrust Banks, Inc. 93,500 5,569
U.S. Bancorp 275,000 6,102
Wells Fargo & Co. 396,200 15,848
263,566
CREDIT & OTHER FINANCE - 1.9%
American Express Co. 40,000 6,593
Associates First Capital 1,200,000 24,000
Corp. Class A
Citigroup, Inc. 1,168,950 67,142
Household International, Inc. 350,000 12,338
110,073
FEDERAL SPONSORED CREDIT - 3.0%
Fannie Mae 1,253,000 75,102
Freddie Mac 1,702,500 85,444
SLM Holding Corp. 371,000 14,446
174,992
INSURANCE - 2.4%
Ambac Financial Group, Inc. 118,600 5,804
American General Corp. 326,800 20,078
American International Group, 662,687 69,002
Inc.
CIGNA Corp. 84,800 6,084
Financial Security Assurance 150,000 8,278
Holdings Ltd.
Marsh & McLennan Companies, 232,400 21,846
Inc.
MBIA, Inc. 125,000 6,258
The Chubb Corp. 59,100 3,324
140,674
SECURITIES INDUSTRY - 2.1%
AXA Financial, Inc. 490,000 15,956
Charles Schwab Corp. 1,155,900 41,685
Franklin Resources, Inc. 103,000 3,676
Lehman Brothers Holdings, 216,300 15,465
Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - CONTINUED
Merrill Lynch & Co., Inc. 100,000 $ 8,675
Morgan Stanley Dean Witter & 582,600 38,597
Co.
124,054
TOTAL FINANCE 813,359
HEALTH - 3.1%
DRUGS & PHARMACEUTICALS - 2.6%
American Home Products Corp. 268,500 12,636
Bristol-Myers Squibb Co. 214,700 14,170
Eli Lilly & Co. 1,222,300 81,741
Merck & Co., Inc. 53,800 4,240
Schering-Plough Corp. 191,000 8,404
Warner-Lambert Co. 316,800 30,076
151,267
MEDICAL EQUIPMENT & SUPPLIES
- - 0.5%
Abbott Laboratories 55,700 1,817
Baxter International, Inc. 317,900 20,306
Johnson & Johnson 97,500 8,391
30,514
TOTAL HEALTH 181,781
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.7%
ELECTRICAL EQUIPMENT - 1.2%
Emerson Electric Co. 242,400 13,347
General Electric Co. 426,900 56,938
Roper Industries, Inc. 68,900 2,312
72,597
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.5%
Caterpillar, Inc. 287,700 12,209
CNH Global NV 558,600 7,751
Ingersoll-Rand Co. 150,000 7,059
27,019
TOTAL INDUSTRIAL MACHINERY & 99,616
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - 5.6%
BROADCASTING - 2.1%
AT&T Corp. - Liberty Media 631,800 $ 32,301
Group Class A (a)
Clear Channel Communications, 211,500 18,268
Inc. (a)
Time Warner, Inc. 957,828 76,566
127,135
ENTERTAINMENT - 1.4%
News Corp. Ltd. sponsored ADR 678,200 32,511
Walt Disney Co. 1,346,400 48,891
81,402
LODGING & GAMING - 0.1%
Starwood Hotels & Resorts 200,000 4,800
Worldwide, Inc. unit
PUBLISHING - 1.6%
A. H. Belo Corp. Class A 582,500 9,247
Gannet Co., Inc. 169,000 11,746
Knight-Ridder, Inc. 131,600 7,016
McGraw-Hill Companies, Inc. 248,300 13,920
Meredith Corp. 981,200 34,342
The New York Times Co. Class A 364,500 16,653
92,924
RESTAURANTS - 0.4%
McDonald's Corp. 500,200 18,601
Outback Steakhouse, Inc. (a) 250,000 6,188
24,789
TOTAL MEDIA & LEISURE 331,050
NONDURABLES - 1.9%
BEVERAGES - 0.8%
Anheuser-Busch Companies, 430,400 29,052
Inc.
Coca-Cola Enterprises, Inc. 663,300 16,748
45,800
FOODS - 0.7%
Keebler Foods Co. (a) 450,000 10,266
Nabisco Group Holdings Corp. 750,000 6,469
Quaker Oats Co. 411,900 24,457
41,192
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.2%
Avon Products, Inc. 200,000 $ 6,363
Dial Corp. 200,000 3,213
Gillette Co. 70,500 2,653
12,229
TOBACCO - 0.2%
Philip Morris Companies, Inc. 600,000 12,563
TOTAL NONDURABLES 111,784
PRECIOUS METALS - 0.2%
Newmont Mining Corp. 500,300 10,194
RETAIL & WHOLESALE - 0.9%
APPAREL STORES - 0.3%
Gap, Inc. 414,600 18,527
DRUG STORES - 0.0%
CVS Corp. 34,200 1,195
GENERAL MERCHANDISE STORES -
0.4%
Ames Department Stores, Inc. 211,900 4,423
(a)
BJ's Wholesale Club, Inc. (a) 250,000 8,750
Consolidated Stores Corp. (a) 115,900 1,652
Target Corp. 75,000 4,955
19,780
GROCERY STORES - 0.2%
Safeway, Inc. (a) 305,400 11,662
TOTAL RETAIL & WHOLESALE 51,164
SERVICES - 0.9%
ADVERTISING - 0.1%
Interpublic Group of 224,200 10,313
Companies, Inc.
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 2,000 28
LEASING & RENTAL - 0.1%
Ryder System, Inc. 225,000 4,964
SERVICES - 0.7%
Cendant Corp. (a) 97,000 1,958
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
H&R Block, Inc. 518,500 $ 22,360
True North Communications 399,800 16,617
40,935
TOTAL SERVICES 56,240
TECHNOLOGY - 7.1%
COMMUNICATIONS EQUIPMENT - 0.2%
ADC Telecommunications, Inc. 57,500 3,791
(a)
Cabletron Systems, Inc. (a) 265,000 6,807
Nokia AB sponsored ADR 20,000 3,660
Turnstone Systems, Inc. 1,200 35
14,293
COMPUTER SERVICES & SOFTWARE
- - 3.6%
Adobe Systems, Inc. 162,700 8,959
Automatic Data Processing, 402,900 19,113
Inc.
BMC Software, Inc. (a) 300,000 11,363
Cadence Design Systems, Inc. 262,100 5,406
(a)
Computer Associates 276,200 18,971
International, Inc.
Computer Sciences Corp. (a) 182,300 16,749
Covad Communications Group, 294,500 20,836
Inc.
Microsoft Corp. (a) 435,400 42,615
Unisys Corp. (a) 2,159,500 68,834
212,846
COMPUTERS & OFFICE EQUIPMENT
- - 1.6%
Apple Computer, Inc. (a) 228,100 23,665
Dell Computer Corp. (a) 895,100 34,405
Hewlett-Packard Co. 174,300 18,868
International Business 162,100 18,186
Machines Corp.
95,124
ELECTRONIC INSTRUMENTS - 0.2%
Agilent Technologies, Inc. 137,600 9,107
Sequenom, Inc. 2,000 52
9,159
ELECTRONICS - 1.5%
Advanced Micro Devices, Inc. 248,300 9,001
(a)
Analog Devices, Inc. (a) 53,700 5,021
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Motorola, Inc. 349,800 $ 47,835
Quantum Effect Devices, Inc. 1,400 22
Texas Instruments, Inc. 245,800 26,516
88,395
TOTAL TECHNOLOGY 419,817
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.2%
AMR Corp. (a) 60,600 3,261
Northwest Airlines Corp. 269,300 5,436
Class A (a)
Southwest Airlines Co. 343,400 5,473
14,170
TRUCKING & FREIGHT - 0.1%
FedEx Corp. (a) 104,000 4,115
United Parcel Service, Inc. 37,400 2,225
Class B
6,340
TOTAL TRANSPORTATION 20,510
UTILITIES - 8.5%
CELLULAR - 0.5%
ALLTEL Corp. 149,300 9,966
Sprint Corp. - PCS Group 120,000 13,208
Series 1 (a)
Vodafone AirTouch PLC 88,400 4,950
sponsored ADR
28,124
ELECTRIC UTILITY - 0.2%
IPALCO Enterprises, Inc. 717,100 13,939
PG&E Corp. 9,768 214
14,153
GAS - 0.8%
Dynegy, Inc. 667,500 20,693
Enron Corp. 373,500 25,188
45,881
TELEPHONE SERVICES - 7.0%
AT&T Corp. 2,612,850 137,828
Bell Atlantic Corp. 512,900 31,768
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
BellSouth Corp. 1,977,100 $ 93,047
CenturyTel, Inc. 57,900 2,215
MCI WorldCom, Inc. (a) 426,771 19,605
Qwest Communications 544,300 21,432
International, Inc. (a)
SBC Communications, Inc. 2,254,000 97,204
Time Warner Telecom, Inc. 174,900 10,625
413,724
TOTAL UTILITIES 501,882
TOTAL COMMON STOCKS 3,344,248
(Cost $2,945,607)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NONCONVERTIBLE BONDS - 10.1%
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S)
AEROSPACE & DEFENSE - 0.1%
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. 6.45% 8/15/02 Baa2 $ 4,450 4,297
BASIC INDUSTRIES - 0.1%
CHEMICALS & PLASTICS - 0.1%
Equistar Chemicals - 5,000 4,856
LP/Equistar Funding Corp.
8.75% 2/15/09
PAPER & FOREST PRODUCTS - 0.0%
Fort James Corp. 6.625% Baa2 910 867
9/15/04
TOTAL BASIC INDUSTRIES 5,723
CONSTRUCTION & REAL ESTATE -
0.7%
REAL ESTATE - 0.1%
Duke Realty LP 7.3% 6/30/03 Baa1 5,000 4,879
REAL ESTATE INVESTMENT TRUSTS
- - 0.6%
CenterPoint Properties Trust Baa2 2,600 2,387
6.75% 4/1/05
Equity Office Properties Trust:
6.5% 1/15/04 Baa1 6,000 5,700
6.625% 2/15/05 Baa1 2,500 2,347
6.75% 2/15/08 Baa1 4,590 4,191
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- - CONTINUED
Equity Office Properties
Trust: - continued
7.25% 2/15/18 Baa1 $ 15,000 $ 13,319
ProLogis Trust 6.7% 4/15/04 Baa1 1,550 1,451
Spieker Properties, Inc. Baa2 9,700 8,951
7.125% 7/1/09
38,346
TOTAL CONSTRUCTION & REAL 43,225
ESTATE
ENERGY - 0.2%
OIL & GAS - 0.2%
Anadarko Petroleum Corp. 7.2% Baa1 6,970 6,298
3/15/29
Apache Corp.:
7.625% 7/1/19 Baa1 1,535 1,457
7.7% 3/15/26 Baa1 1,500 1,452
Apache Finance Property Ltd. Baa1 2,600 2,372
6.5% 12/15/07
Conoco, Inc. 5.9% 4/15/04 A3 2,300 2,167
YPF Sociedad Anonima:
7.75% 8/27/07 B1 595 563
8% 2/15/04 B1 1,190 1,164
15,473
FINANCE - 3.4%
BANKS - 1.4%
ABN-Amro Bank NV, Chicago A1 6,750 6,649
6.625% 10/31/01
BanPonce Financial Corp. A3 770 761
6.75% 8/9/01
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 5,930 5,905
5.95% 7/15/01 A1 11,700 11,447
Capital One Bank 6.375% Baa2 5,300 5,072
2/15/03
FleetBoston Financial Corp. A3 5,000 4,848
7.375% 12/1/09
HSBC Finance Nederland BV A2 750 739
7.4% 4/15/03 (c)
Korea Development Bank:
6.625% 11/21/03 Baa2 4,045 3,840
7.375% 9/17/04 Baa2 1,295 1,248
yankee 6.5% 11/15/02 Baa2 595 570
MBNA Corp.:
6.34% 6/2/03 Baa2 1,800 1,710
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
BANKS - CONTINUED
MBNA Corp.: - continued
6.875% 11/15/02 Baa2 $ 8,350 $ 8,146
NationsBank NA 5.92% 6/8/01 Aa2 6,500 6,347
Providian National Bank:
6.25% 5/7/01 Baa3 2,345 2,300
6.75% 3/15/02 Baa3 905 880
Sanwa Finance Aruba AEC 8.35% Baa1 14,100 13,967
7/15/09
Union Planters National Bank A3 4,000 4,017
6.81% 8/20/01
Zions Bancorp 8.625% 10/15/02 A3 6,000 6,113
84,559
CREDIT & OTHER FINANCE - 1.7%
Associates Corp. of North
America:
6% 4/15/03 Aa3 5,550 5,324
6% 7/15/05 Aa3 20,000 18,580
AT&T Capital Corp. 7.5% A1 5,585 5,615
11/15/00
BanPonce Trust I 8.327% 2/1/27 A3 2,825 2,557
CIT Group, Inc. 5.5% 2/15/04 A1 2,000 1,855
ERP Operating LP:
6.55% 11/15/01 A3 2,000 1,956
7.1% 6/23/04 A3 4,000 3,869
Finova Capital Corp. 6.12% Baa1 5,000 4,835
5/28/02
First Security Capital I A3 3,490 3,268
8.41% 12/15/26
Ford Motor Credit Co. 6.2% A1 20,000 19,812
3/12/01
Newcourt Credit Group, Inc. A1 8,265 7,972
6.875% 2/16/05
Popular North America, Inc. A3 3,000 2,957
7.375% 9/15/01
Spieker Properties LP 6.8% Baa2 2,050 1,949
5/1/04
Sprint Capital Corp.:
5.875% 5/1/04 Baa1 8,670 8,150
6.875% 11/15/28 Baa1 6,030 5,331
The Money Store, Inc. 7.3% A2 3,850 3,809
12/1/02
Trizec Finance Ltd. yankee Baa3 2,270 2,355
10.875% 10/15/05
TXU Eastern Funding 6.75% Baa1 2,350 2,140
5/15/09
102,334
INSURANCE - 0.2%
Executive Risk Capital Trust Baa3 10,000 9,980
8.675% 2/1/27
SAVINGS & LOANS - 0.1%
Long Island Savings Bank FSB Baa3 3,750 3,699
6.2% 4/2/01
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.0%
Amvescap PLC yankee 6.375% A3 $ 3,600 $ 3,424
5/15/03
TOTAL FINANCE 203,996
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.4%
Tyco International Group SA:
6.875% 9/5/02 (c) Baa1 15,000 14,704
yankee 6.125% 6/15/01 Baa1 8,750 8,578
23,282
MEDIA & LEISURE - 1.3%
BROADCASTING - 0.9%
Clear Channel Communications,
Inc.:
6.875% 6/15/18 Baa3 10,000 8,932
7.25% 10/15/27 Baa3 2,000 1,835
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa2 3,835 3,924
9% 9/1/08 Baa2 4,040 4,307
Cox Communications, Inc. Baa2 2,795 2,789
7.75% 8/15/06
Nielsen Media Research, Inc. Baa2 3,495 3,372
7.6% 6/15/09
TCI Communications, Inc.:
8.25% 1/15/03 A2 4,120 4,220
9.8% 2/1/12 A2 6,290 7,231
TCI Communications Financing A3 4,100 4,531
III 9.65% 3/31/27
Time Warner, Inc. 6.85% Baa3 10,000 9,753
1/15/26
USA Networks, Inc./USANi LLC Baa3 3,760 3,562
6.75% 11/15/05
54,456
PUBLISHING - 0.4%
News America Holdings, Inc.:
8% 10/17/16 Baa3 13,000 12,737
8.5% 2/15/05 Baa3 1,855 1,906
News America, Inc. 6.625% Baa3 950 876
1/9/08
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Time Warner Entertainment Co.
LP:
8.375% 3/15/23 Baa2 $ 770 $ 788
8.375% 7/15/33 Baa2 6,500 6,597
22,904
TOTAL MEDIA & LEISURE 77,360
NONDURABLES - 0.3%
BEVERAGES - 0.1%
Seagram JE & Sons, Inc. Baa3 6,905 6,520
6.625% 12/15/05
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 5,000 4,717
TOBACCO - 0.1%
RJ Reynolds Tobacco Holdings, Baa2 5,100 4,747
Inc. 7.375% 5/15/03
TOTAL NONDURABLES 15,984
RETAIL & WHOLESALE - 0.4%
DRUG STORES - 0.1%
Rite Aid Corp.:
6% 12/15/00 (c) B1 1,445 1,214
6.5% 12/15/05 (c) B1 8,215 5,422
7.125% 1/15/07 B1 2,465 1,602
8,238
GENERAL MERCHANDISE STORES -
0.2%
Dayton Hudson Corp. 6.4% A3 1,000 970
2/15/03
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa1 6,000 5,733
8.5% 6/15/03 Baa1 4,000 4,093
10,796
GROCERY STORES - 0.1%
Kroger Co. 6% 7/1/00 Baa3 6,070 6,031
TOTAL RETAIL & WHOLESALE 25,065
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT
- - 0.5%
Comdisco, Inc.:
5.95% 4/30/02 Baa1 $ 6,000 $ 5,738
6.375% 11/30/01 Baa1 12,000 11,722
9.3% 6/27/00 Baa2 3,750 3,787
9.45% 6/8/00 Baa2 6,000 6,063
27,310
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.2%
Continental Airlines, Inc.
pass thru trust certificates:
7.434% 3/15/06 Baa1 1,615 1,563
7.73% 9/15/12 Baa1 1,050 1,022
Delta Air Lines, Inc.:
equipment trust certificate Baa1 734 726
8.54% 1/2/07
9.875% 5/15/00 Baa3 2,000 2,015
9.875% 4/30/08 Baa1 4,617 4,773
10,099
RAILROADS - 0.4%
Burlington Northern Santa Fe
Corp.:
6.53% 7/15/37 Baa2 12,000 11,408
6.875% 12/1/27 Baa2 5,000 4,379
Norfolk Southern Corp. 7.05% Baa1 8,820 8,585
5/1/37
24,372
TOTAL TRANSPORTATION 34,471
UTILITIES - 2.1%
CELLULAR - 0.3%
Cable & Wireless Baa1 15,425 15,023
Communications PLC 6.375%
3/6/03
ELECTRIC UTILITY - 0.8%
Avon Energy Partners Holdings:
6.46% 3/4/08 (c) Baa2 6,800 6,083
7.05% 12/11/07 (c) Baa2 20,000 18,334
DR Investments UK PLC yankee A2 7,500 7,389
7.1% 5/15/02 (c)
NONCONVERTIBLE BONDS -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Israel Electric Corp. Ltd.:
7.75% 12/15/27 (c) A3 $ 10,795 $ 9,629
yankee 7.25% 12/15/06 (c) A3 3,000 2,803
Texas Utilities Co. 6.375% Baa3 5,705 5,144
1/1/08
49,382
GAS - 0.2%
CMS Panhandle Holding Co.:
6.125% 3/15/04 Baa3 3,500 3,292
7% 7/15/29 Baa3 2,650 2,354
Southwest Gas Corp. 9.75% Baa2 8,700 9,002
6/15/02
14,648
TELEPHONE SERVICES - 0.8%
MCI WorldCom, Inc.:
6.4% 8/15/05 A3 6,490 6,164
8.875% 1/15/06 A3 9,592 10,031
Telecomunicaciones de Puerto Baa2 5,020 4,684
Rico, Inc. 6.65% 5/15/06
Teleglobe Canada, Inc.:
7.2% 7/20/09 Baa1 10,070 9,400
7.7% 7/20/29 Baa1 15,497 14,154
44,433
TOTAL UTILITIES 123,486
TOTAL NONCONVERTIBLE BONDS 599,672
(Cost $634,764)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 10.9%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 1.0%
Fannie Mae:
5.25% 1/15/09 Aaa 1,850 1,599
6.5% 4/29/09 Aaa 29,000 26,875
Federal Agricultural Mortgage
Corp.:
7.01% 2/10/05 Aaa 1,530 1,510
7.04% 8/10/05 Aaa 2,400 2,369
Financing Corp. - coupon Aaa 4,574 3,438
STRIPS 0% 3/26/04
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Freddie Mac:
6.25% 7/15/04 Aaa $ 10,930 $ 10,520
6.875% 1/15/05 Aaa 5,000 4,931
Government Trust Certificates
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency):
Class 1-C, 9.25% 11/15/01 Aaa 3,708 3,787
Class T-3, 9.625% 5/15/02 Aaa 878 900
Private Export Funding Corp. Aaa 1,085 1,074
secured 6.86% 4/30/04
TOTAL U.S. GOVERNMENT AGENCY 57,003
OBLIGATIONS
U.S. TREASURY OBLIGATIONS -
9.9%
U.S. Treasury Bonds:
6.375% 8/15/27 Aaa 39,100 37,994
6.875% 8/15/25 Aaa 9,500 9,789
8% 11/15/21 Aaa 50,900 58,535
8.75% 5/15/17 Aaa 7,665 9,224
8.875% 8/15/17 Aaa 36,620 44,596
9.875% 11/15/15 Aaa 28,960 37,639
14% 11/15/11 Aaa 13,720 18,953
U.S. Treasury Notes:
4% 10/31/00 Aaa 90,600 89,113
6.5% 5/31/02 Aaa 77,450 77,160
6.625% 6/30/01 Aaa 7,580 7,584
7% 7/15/06 Aaa 161,470 163,362
7.5% 11/15/01 Aaa 8,510 8,627
U.S. Treasury Notes - coupon Aaa 54,800 24,890
STRIPS 0% 11/15/11
TOTAL U.S. TREASURY 587,466
OBLIGATIONS
TOTAL U.S. GOVERNMENT AND 644,469
GOVERNMENT AGENCY OBLIGATIONS
(Cost $660,510)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 12.5%
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FANNIE MAE - 9.6%
5.5% 11/1/08 to 3/1/14 Aaa $ 14,034 $ 13,023
6% 1/1/12 to 1/1/29 Aaa 55,401 49,994
6.5% 7/1/08 to 8/1/29 Aaa 275,890 256,241
7% 12/1/08 to 9/1/29 Aaa 92,185 87,984
7.5% 6/1/07 to 1/1/30 Aaa 100,095 97,726
8% 9/1/17 to 10/1/29 Aaa 23,084 23,036
8% 2/1/30 (e) Aaa 39,400 39,289
TOTAL FANNIE MAE 567,293
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 2.9%
6.5% 3/15/26 to 4/15/29 Aaa 68,271 63,087
7% 10/15/27 to 12/15/28 Aaa 82,469 78,456
7.5% 1/15/26 to 9/15/29 Aaa 24,845 24,235
8% 1/15/17 to 8/15/25 Aaa 835 836
9% 11/15/14 to 1/15/23 Aaa 396 413
9.5% 6/15/09 to 3/15/23 Aaa 1,592 1,684
TOTAL GOVERNMENT NATIONAL 168,711
MORTGAGE ASSOCIATION
TOTAL U.S. GOVERNMENT AGENCY 736,004
- - MORTGAGE SECURITIES
(Cost $774,878)
ASSET-BACKED SECURITIES - 0.8%
American Express Credit A1 4,200 3,959
Account Master Trust 6.1%
12/15/06
Capita Equipment Receivables Baa2 4,680 4,499
Trust 6.48% 10/15/06
Contimortgage Home Equity Aaa 3,774 3,757
Loan Trust 6.26% 7/15/12
Discover Card Master Trust I A2 5,000 4,818
5.85% 11/16/04
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa2 3,850 3,758
6.4% 12/15/02 Baa2 2,360 2,301
6.87% 11/15/04 A2 4,100 4,029
Key Auto Finance Trust:
6.3% 10/15/03 A2 2,201 2,184
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Key Auto Finance Trust: -
continued
6.65% 10/15/03 Baa3 $ 646 $ 644
Premier Auto Trust 5.59% Aaa 15,000 14,428
2/9/04
TOTAL ASSET-BACKED SECURITIES 44,377
(Cost $45,736)
COMMERCIAL MORTGAGE
SECURITIES - 1.1%
CS First Boston Mortgage
Securities Corp.:
Series 1997-C2 Class D, 7.27% Baa2 5,790 5,285
1/17/35
Series 1998-FL1:
Class D, 6.3275% 12/10/00 A2 6,100 6,071
(c)(d)
Class E, 6.6725% 1/10/13 Baa2 12,180 12,032
(c)(d)
Equitable Life Assurance
Society of the United States
Series 174:
Class B1, 7.33% 5/15/06 (c) Aa2 4,000 3,886
Class C-1, 7.52% 5/15/06 (c) A2 4,000 3,879
GS Mortgage Securities Corp. Baa3 5,000 4,197
II Series 1998-GLII Class E,
7.1905% 4/13/31 (c)(d)
Nomura Asset Securities Corp. Baa2 20,000 17,594
Series 1998-D6 Class A-4,
7.5973% 3/17/28 (d)
Thirteen Affiliates of Aaa 8,000 7,415
General Growth Properties,
Inc. sequential pay Series 1
Class A2, 6.602% 12/15/10 (c)
Wells Fargo Capital Markets Aaa 2,590 2,520
Apartment Financing Trust
Series APT Class 1, 6.56%
12/29/05 (c)
TOTAL COMMERCIAL MORTGAGE 62,879
SECURITIES
(Cost $67,299)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - (G) 0.1%
Korean Republic yankee:
8.75% 4/15/03 Baa2 1,900 1,937
8.875% 4/15/08 Baa2 2,946 3,042
Quebec Province yankee:
7.125% 2/9/24 A2 680 631
7.5% 7/15/23 A2 2,880 2,802
TOTAL FOREIGN GOVERNMENT AND 8,412
GOVERNMENT AGENCY OBLIGATIONS
(Cost $9,024)
SUPRANATIONAL OBLIGATIONS -
0.0%
MOODY'S RATINGS (UNAUDITED) (F) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Inter-American Development Aaa $ 3,000 $ 2,816
Bank yankee 6.29% 7/16/27
(Cost $2,981)
CASH EQUIVALENTS - 9.3%
SHARES
Central Cash Collateral Fund, 21,916,900 21,917
5.56% (b)
Taxable Central Cash Fund, 526,638,696 526,639
5.45% (b)
TOTAL CASH EQUIVALENTS 548,556
(Cost $548,556)
TOTAL INVESTMENT PORTFOLIO - 5,991,433
101.4%
(Cost $5,689,355)
NET OTHER ASSETS - (1.4)% (81,073)
NET ASSETS - 100% $ 5,910,360
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) 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 $106,317,000 or 1.8% of net assets.
(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(e) Security purchased on a delayed delivery or when-issued basis.
(f) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(g) 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 27.1% AAA, AA, A 26.8%
Baa 7.6% BBB 6.5%
Ba 0.0% BB 0.2%
B 0.2% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.1%.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate
cost of investment securities for income
tax purposes was $5,714,010,000. Net unrealized appreciation
aggregated $277,423,000, of which $503,561,000 related to appreciated
investment securities and $226,138,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) JANUARY
31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 5,991,433
value (cost $5,689,355) -
See accompanying schedule
Receivable for investments 16,457
sold
Receivable for fund shares 7,170
sold
Dividends receivable 2,780
Interest receivable 25,032
Other receivables 530
TOTAL ASSETS 6,043,402
LIABILITIES
Payable for investments $ 51,754
purchased Regular delivery
Delayed delivery 39,612
Payable for fund shares 16,921
redeemed
Accrued management fee 2,134
Other payables and accrued 704
expenses
Collateral on securities 21,917
loaned, at value
TOTAL LIABILITIES 133,042
NET ASSETS $ 5,910,360
Net Assets consist of:
Paid in capital $ 5,553,525
Undistributed net investment 17,834
income
Accumulated undistributed net 36,914
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 302,087
(depreciation) on investments
NET ASSETS, for 393,900 $ 5,910,360
shares outstanding
NET ASSET VALUE, offering $15.00
price and redemption price
per share ($5,910,360
(divided by) 393,900 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JANUARY 31,
2000 (UNAUDITED)
INVESTMENT INCOME $ 21,909
Dividends
Interest 84,927
Security lending 35
TOTAL INCOME 106,871
EXPENSES
Management fee $ 12,786
Transfer agent fees 6,471
Accounting and security 452
lending fees
Non-interested trustees' 12
compensation
Custodian fees and expenses 78
Registration fees 53
Audit 32
Legal 24
Reports to shareholders 135
Miscellaneous 11
Total expenses before 20,054
reductions
Expense reductions (1,121) 18,933
NET INVESTMENT INCOME 87,938
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 120,515
Foreign currency transactions (6) 120,509
Change in net unrealized (317,283)
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) (196,774)
NET INCREASE (DECREASE) IN $ (108,836)
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, 1999
2000 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 87,938 $ 143,436
income
Net realized gain (loss) 120,509 683,387
Change in net unrealized (317,283) 15,318
appreciation (depreciation)
NET INCREASE (DECREASE) IN (108,836) 842,141
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (92,433) (128,130)
From net investment income
From net realized gain (691,340) (378,957)
TOTAL DISTRIBUTIONS (783,773) (507,087)
Share transactions Net 982,508 1,527,019
proceeds from sales of shares
Reinvestment of distributions 767,892 495,851
Cost of shares redeemed (888,733) (1,379,305)
NET INCREASE (DECREASE) IN 861,667 643,565
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (30,942) 978,619
IN NET ASSETS
NET ASSETS
Beginning of period 5,941,302 4,962,683
End of period (including $ 5,910,360 $ 5,941,302
undistributed net investment
income of $17,834 and
$22,329, respectively)
OTHER INFORMATION
Shares
Sold 62,809 91,041
Issued in reinvestment of 49,268 33,987
distributions
Redeemed (57,554) (83,449)
Net increase (decrease) 54,523 41,579
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 17.51 $ 16.66 $ 16.49 $ 12.90 $ 13.20 $ 12.76
period
Income from Invest- ment
Operations
Net investment income .23 D .44 D .48 D .51 D .57 .62
Net realized and unrealized (.51) 2.09 1.67 3.73 (.27) .27
gain (loss)
Total from investment (.28) 2.53 2.15 4.24 .30 .89
operations
Less Distributions
From net investment income (.25) (.40) (.52) (.65) (.60) (.45)
From net realized gain (1.98) (1.28) (1.46) - - -
Total distributions (2.23) (1.68) (1.98) (.65) (.60) (.45)
Net asset value, end of period $ 15.00 $ 17.51 $ 16.66 $ 16.49 $ 12.90 $ 13.20
TOTAL RETURN B, C (1.87)% 17.48% 14.54% 33.82% 2.25% 7.19%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,910 $ 5,941 $ 4,963 $ 4,173 $ 4,022 $ 5,070
(in millions)
Ratio of expenses to average .67% A .68% .70% .75% .82% .91%
net assets
Ratio of expenses to average .63% A, E .65% E .67% E .74% E .79% E .90% E
net assets after expense
reductions
Ratio of net invest- ment 2.94% A 2.67% 2.97% 3.58% 4.12% 5.33%
income to average net
assets
Portfolio turnover rate 166% A 157% 135% 70% 247% 269%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000 (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. Foreign equity securities are valued based on
quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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 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, paydown gains/losses on certain
securities, 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 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, Federal Agency,
and other obligations found satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 after the customary settlement period for that security. 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 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.
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, 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 $4,707,778,000 and $4,641,423,000, respectively, of which
U.S. government and government agency obligations aggregated
$1,009,257,000 and $734,188,000, 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 .2167% 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 .43% 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 $293,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount 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. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experi
ence delays and costs in recovering the securities loaned or in
gaining access to the collateral. At period end, the value of the
securities loaned amounted to $21,591,000. The fund received cash
collateral of $21,917,000 which was invested in cash equivalents.
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 $878,000 under this arrangement.
In addition, through arrangements with the fund's custodian and
transfer agent, 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 $4,000 and $239,000, respectively, under these arrangements.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Investments
Money Management, Inc. (FIMM)
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
William O. McCoy *
Marvin L. Mann *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
* INDEPENDENT TRUSTEES
BAL-SANN-0300 95604
1.471161.102
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
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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)
Fidelity Automated Service
Telephone (FASTSM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
FIDELITY(REGISTERED TRADEMARK)
PURITAN(REGISTERED TRADEMARK)
FUND
SEMIANNUAL REPORT
JANUARY 31, 2000
(2_FIDELITY_LOGOS)(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 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 46 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 50 Notes to the financial
statements.
REPORT OF INDEPENDENT 55 The auditors' opinion
ACCOUNTANTS
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 1-800-544-6666 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While no major Y2K glitches disrupted the financial markets to start
the new year, inflation worries re-emerged to hinder stock performance
throughout January. The S&P 500(Registered trademark) and Dow Jones
Industrial Average each fell approximately 5%, while the
technology-oriented NASDAQ Index dropped more than 3% for the month.
In bond markets, the potential for further rate hikes as a pre-emptive
move against inflation continued to be an obstacle to fixed-income
performance.
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 1-800-544-6666, 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, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PURITAN -1.81% -0.26% 101.65% 248.52%
Fidelity Balanced Income -2.90% 1.02% 104.55% 229.03%
Composite
LB Aggregate Bond 0.66% -1.85% 41.84% 111.74%
S&P 500 5.59% 10.35% 225.05% 442.52%
Balanced Funds Average 2.11% 4.09% 104.82% 214.01%
</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 Income Composite Index - a hypothetical
combination of unmanaged indices combining the total returns of the
Russell 3000 Value Index and the Lehman Brothers Aggregate Bond Index
using a weighting of 60% and 40%, respectively. 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 473 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, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY PURITAN -0.26% 15.06% 13.30%
Fidelity Balanced Income 1.02% 15.39% 12.65%
Composite
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
Puritan 60/40 RS 3000V/LB Aggr.
S&P 500 LB Aggregate Bond
00004 F0164
SP001 LB001
1990/01/31 10000.00 10000.00
10000.00 10000.00
1990/02/28 10106.71 10163.78
10129.00 10032.00
1990/03/31 10121.26 10238.02
10397.42 10039.02
1990/04/30 9873.64 9962.29
10137.48 9946.66
1990/05/31 10423.04 10563.35
11125.89 10241.08
1990/06/30 10367.25 10496.36
11050.23 10405.97
1990/07/31 10273.00 10487.41
11014.87 10549.57
1990/08/31 9652.53 9865.99
10019.13 10408.20
1990/09/30 9204.33 9601.42
9531.20 10494.59
1990/10/31 9044.67 9556.03
9490.21 10627.87
1990/11/30 9555.58 10033.37
10103.28 10856.37
1990/12/31 9778.97 10250.51
10385.16 11025.73
1991/01/31 10217.20 10590.30
10837.95 11162.45
1991/02/28 10809.61 11062.25
11612.87 11257.33
1991/03/31 10881.43 11209.66
11893.90 11335.01
1991/04/30 10972.04 11307.95
11922.44 11457.43
1991/05/31 11507.47 11590.78
12437.49 11523.88
1991/06/30 11108.20 11293.84
11867.86 11518.12
1991/07/31 11492.69 11633.24
12420.90 11678.22
1991/08/31 11693.29 11866.24
12715.27 11930.47
1991/09/30 11703.11 11914.27
12502.93 12172.66
1991/10/31 11872.72 12083.06
12670.47 12307.77
1991/11/30 11465.66 11760.55
12159.85 12421.00
1991/12/31 12170.56 12482.85
13550.93 12789.91
1992/01/31 12273.84 12466.64
13298.89 12615.97
1992/02/29 12618.13 12694.40
13471.77 12697.97
1992/03/31 12556.46 12557.53
13209.07 12626.86
1992/04/30 12966.57 12887.46
13597.42 12717.77
1992/05/31 13114.91 13035.09
13664.05 12958.14
1992/06/30 13044.26 13044.09
13460.45 13136.96
1992/07/31 13441.68 13452.22
14010.98 13404.96
1992/08/31 13309.21 13266.61
13723.76 13540.35
1992/09/30 13471.49 13443.13
13885.70 13701.48
1992/10/31 13369.78 13393.19
13934.30 13519.25
1992/11/30 13730.38 13676.60
14409.46 13521.95
1992/12/31 14048.16 13970.89
14586.70 13736.95
1993/01/31 14448.45 14338.27
14709.22 14000.70
1993/02/28 14743.90 14718.96
14909.27 14245.71
1993/03/31 15326.90 15009.97
15223.86 14305.54
1993/04/30 15616.09 14928.35
14855.44 14405.68
1993/05/31 15828.16 15124.39
15253.56 14424.41
1993/06/30 15935.26 15424.51
15297.80 14685.49
1993/07/31 16169.17 15568.10
15236.61 14769.20
1993/08/31 16636.99 16016.80
15814.08 15027.66
1993/09/30 16522.48 16068.90
15692.31 15068.23
1993/10/31 16952.04 16106.93
16017.14 15123.99
1993/11/30 16679.63 15848.36
15864.97 14995.43
1993/12/31 17061.08 16072.56
16056.94 15076.41
1994/01/31 17819.35 16522.20
16602.88 15279.94
1994/02/28 17624.36 16097.63
16152.94 15014.07
1994/03/31 16968.37 15572.21
15448.67 14643.22
1994/04/30 17154.23 15692.91
15646.41 14526.08
1994/05/31 17263.56 15788.88
15903.02 14524.62
1994/06/30 17129.94 15546.26
15513.39 14492.67
1994/07/31 17559.84 15947.78
16022.23 14781.07
1994/08/31 18077.93 16240.91
16679.14 14798.81
1994/09/30 17688.14 15844.90
16270.50 14581.27
1994/10/31 17895.56 15938.94
16636.59 14568.15
1994/11/30 17330.92 15538.59
16030.68 14536.10
1994/12/31 17365.49 15706.75
16268.42 14636.39
1995/01/31 17283.41 16085.77
16690.26 14926.19
1995/02/28 17811.06 16618.07
17340.68 15281.44
1995/03/31 18224.43 16860.17
17852.40 15374.66
1995/04/30 18590.81 17272.33
18378.16 15589.90
1995/05/31 18992.65 17954.78
19112.73 16193.23
1995/06/30 19205.97 18174.83
19556.72 16311.44
1995/07/31 19848.15 18540.25
20205.22 16275.55
1995/08/31 19943.29 18804.50
20255.94 16472.49
1995/09/30 20229.03 19261.21
21110.74 16632.27
1995/10/31 19903.54 19212.08
21035.37 16848.49
1995/11/30 20614.81 19898.94
21958.82 17101.22
1995/12/31 21092.20 20317.20
22381.75 17340.64
1996/01/31 21389.80 20721.88
23143.63 17455.08
1996/02/29 21662.60 20681.09
23358.17 17151.37
1996/03/31 22023.21 20838.65
23583.11 17031.31
1996/04/30 22035.70 20867.42
23930.72 16935.93
1996/05/31 22173.03 21022.63
24547.89 16902.06
1996/06/30 22273.59 21130.32
24641.42 17128.55
1996/07/31 21845.25 20653.27
23552.76 17174.79
1996/08/31 22046.82 21012.83
24049.49 17145.60
1996/09/30 22921.24 21643.46
25403.00 17443.93
1996/10/31 23477.58 22300.81
26103.61 17831.19
1996/11/30 24659.81 23397.88
28076.78 18136.10
1996/12/31 24288.60 23196.14
27520.58 17967.43
1997/01/31 25119.82 23851.47
29240.07 18023.13
1997/02/28 25500.21 24077.97
29469.31 18068.19
1997/03/31 24647.12 23464.99
28258.42 17867.63
1997/04/30 25656.31 24158.38
29945.44 18135.65
1997/05/31 26693.94 25094.08
31768.52 18307.94
1997/06/30 27687.63 25871.20
33191.75 18525.80
1997/07/31 29192.39 27267.31
35832.82 19026.00
1997/08/31 27902.60 26672.50
33825.47 18864.28
1997/09/30 29025.99 27807.26
35678.09 19143.47
1997/10/31 28431.80 27503.55
34486.44 19421.05
1997/11/30 29115.11 28228.76
36082.82 19510.38
1997/12/31 29716.97 28844.99
36702.36 19707.44
1998/01/31 29977.64 28741.04
37108.29 19959.69
1998/02/28 31143.01 29881.19
39784.53 19943.73
1998/03/31 32114.85 30982.49
41821.90 20011.54
1998/04/30 32300.30 31168.14
42242.63 20115.60
1998/05/31 32253.94 30972.59
41516.48 20306.69
1998/06/30 32935.70 31283.60
43202.88 20478.96
1998/07/31 32857.80 30877.31
42742.77 20522.42
1998/08/31 29632.78 28309.20
36563.02 20856.45
1998/09/30 30740.85 29547.75
38905.24 21344.74
1998/10/31 32249.92 30787.92
42069.80 21232.12
1998/11/30 33504.65 31689.31
44619.65 21352.37
1998/12/31 34648.37 32370.65
47190.63 21416.58
1999/01/31 34941.85 32571.32
49164.14 21569.55
1999/02/28 34423.94 31987.19
47636.12 21192.95
1999/03/31 35128.16 32414.97
49542.04 21310.54
1999/04/30 36381.50 34269.68
51460.81 21378.09
1999/05/31 35284.83 33982.91
50245.82 21189.96
1999/06/30 36286.20 34542.02
53034.46 21122.29
1999/07/31 35496.23 33885.24
51378.72 21033.58
1999/08/31 34952.02 33125.49
51124.40 21022.89
1999/09/30 34309.28 32606.27
49723.08 21266.85
1999/10/31 35009.84 33670.34
52869.56 21345.31
1999/11/30 35083.59 33529.00
53944.39 21343.82
1999/12/31 35638.71 33595.70
57121.72 21240.91
2000/01/31 34852.15 32903.07
54251.92 21171.42
IMATRL PRASUN SHR__CHT 20000131 20000228 110245 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Puritan Fund on January 31, 1990. As the chart
shows, by January 31, 2000, the value of the investment would have
grown to $34,852 - a 248.52% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500SM 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
500 Index would have grown to $54,252 - a 442.52% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,174 - a 111.74% increase. You can also look at how
the Fidelity Balanced Income Composite Index did over the same period.
The composite index combines the total returns of the Russell 3000
Value Index and the Lehman Brothers Aggregate Bond Index, and assumes
monthly rebalancing of the mix. With dividends and interest, if any,
reinvested, the same $10,000 would have grown to $32,903 - a 229.03%
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
Technology stocks and interest
rates. The former continued to rally
during the six months that ended
January 31, 2000, ensuring that
overall stock market performance
was up. The latter, meanwhile, held
back returns in most non-technology
sectors, and conspired to make it a
difficult period for bond investors.
Despite the fact that the Federal
Reserve Board raised interest
rates once in August and again
in November, equity investors
continued to gobble up technology
stocks, particularly those with an
Internet theme. To illustrate the
sector's dominance, the
technology-oriented NASDAQ Index
returned an eye-popping 49.52%
return during the six-month period.
The Standard & Poor's 500 Index -
a more expansive measure of stock
performance - returned 5.59%.
While tech stocks were spreading
their magic throughout the equity
market, interest rates were busy
suppressing bond performance.
The Lehman Brothers Aggregate
Bond Index - a broad measure of
the U.S. taxable investment-grade
bond market - returned 0.66%
during the six-month period.
Yield-spread sectors such as
corporate and mortgage-backed
bonds were clearly favored over
Treasuries during this stretch, as yield
spreads for each narrowed due to
weaker-than-expected supply for
corporates and declining
prepayments for mortgages.
(photograph of Bettina Doulton)(photograph of Steve Petersen)
NOTE TO SHAREHOLDERS: The following is an interview with Bettina
Doulton, who managed Fidelity Puritan Fund during the period covered
by this report, with additional comments from Steve Petersen, who
became manager of the fund on February 1, 2000.
Q. HOW DID THE FUND PERFORM, BETTINA?
B.D. For the six-month period that ended January 31, 2000, the fund
returned -1.81%. Meanwhile, the Standard & Poor's 500 Index and the
Lehman Brothers Aggregate Bond Index returned 5.59% and 0.66%,
respectively. During the same period, the fund underperformed the
2.11% return of the balanced funds average as tracked by Lipper Inc.
For the 12-month period ending January 31, 2000, the fund returned
- -0.26%. Returns for the S&P 500 and Lehman Brothers indexes during the
same period were 10.35% and -1.85%, respectively, while the Lipper
average closed out the 12-month period up 4.09%. Because of the fund's
mix of stocks and bonds, we also look at how the fund did against the
Fidelity Balanced Income Composite Index, a hypothetical combination
of unmanaged indexes combining the total returns of the Russell 3000
Value Index and the Lehman Brothers Aggregate Bond Index using a
weighting of 60% and 40%, respectively. This index returned -2.90% and
1.02% for the six-month and 12-month periods, respectively.
Q. HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT OF THE PAST SIX
MONTHS?
B.D. It was an extraordinarily volatile and divergent period, which I
believe is a function of how the information age is dramatically
changing the economy. Technology companies that have embraced
intellectual capital and rapid change characterize the new economy.
These companies are the makers and providers of the servers, software,
communication networks and telecommunication equipment that are
fueling Internet use and e-commerce. Investors clearly believe that
these companies have attractive prospects for earnings and revenue
growth for the next several years. Consequently, investors have been
willing to pay almost any price for this growth. On the other hand,
the old economy is represented by the aging, goods-producing sectors.
These companies lack the cost and productivity advantages gained from
an Internet and e-commerce strategy. In the old economy competition is
fierce, the ability to raise prices is practically non-existent, unit
growth rates are slowing, price-to-earnings ratios are declining and,
in many cases, profit margins also are decreasing.
Q. WHY DID THE FUND'S RETURN TRAIL THE BALANCED FUNDS AVERAGE OVER THE
PAST SIX MONTHS?
B.D. Similar to what I communicated in the fund's annual report to
shareholders last July, the primary reason for the fund's
underperformance relative to its peers continued to be portfolio
construction. Given the tremendous surge of the technology sector and
the telecommunications subcomponent of the utilities sector over the
last half of 1999 - which were the only two groups that performed
exceptionally well - this fund had little chance against its more
growth-oriented peers. Puritan's equity subportfolio is
dividend-oriented, so naturally we typically bypass the low-dividend
yielding, high price-to-earnings growth stocks, which include the many
dot.com and wireless companies that lit up the market in 1999.
Q. GIVEN THAT LIMITATION, WHAT STRATEGIES DID YOU PURSUE TO HELP LIFT
THE FUND'S RETURNS?
B.D. Overweighting the media and leisure sector and strong stock
selection within that group proved greatly beneficial to the fund's
performance. At the end of the period, the fund's media and leisure
weighting was approximately twice that of the S&P 500 index. Viacom,
CBS and McGraw-Hill were particularly strong performers in the
category. Good stock picks and a slight overweighting in the basic
industry sector also helped, as improving global economic health
pushed commodity-based companies higher. Within this group, Alcoa,
which benefited from higher aluminum prices, was one of the fund's
best individual contributors to performance.
Q. WHAT OTHER STOCKS PERFORMED WELL?
B.D. Although the finance sector overall was dragged down in an
environment of rising interest rates, American Express continued to be
a stellar performer. Its transition into the world of e-commerce was
tremendously successful, as was its recent launch of the "Blue card."
In general, finance companies that depend upon transaction fees and
capital markets for their revenues fared better than lending
institutions during the second half of 1999. Similarly, the advent of
the Internet along with adoption of successful Web strategies all
helped Viacom, CBS and McGraw-Hill, three media and leisure holdings I
mentioned earlier. Each benefited from increased advertising
expenditures by dot.com companies and traditional bricks and mortar
companies that were attempting to protect their businesses from being
cannibalized by their online competitors.
Q. WHAT STOCKS HAVEN'T LIVED UP TO YOUR EXPECTATIONS?
B.D. Fannie Mae and Freddie Mac, which provide housing-related
financial services, were disappointments. Concerns about growth rates,
pricing wars between the two companies and rising mortgage rates drove
their stock prices down throughout the period. Another finance
holding, Associates First Capital, also was negatively affected by
rising interest rates and missed earnings estimates. Xerox was one of
the largest detractors to fund performance; earnings disappointments
and a more competitive environment caused its stock price to plummet.
This holding was no longer in the fund at the end of the period.
Q. HOW DID THE FUND'S BOND SUBPORTFOLIO FARE?
B.D. This time, portfolio construction was a positive for the fund.
Relative to its peers and the Lehman Brothers Aggregate Bond Index,
the fund was overweighted in corporates and mortgages - two of the
best domestic bond offerings during the second half of 1999.
Conversely, the fund underweighted government securities compared to
its peers and the Lehman index. Treasuries had an exceptionally poor
third and fourth quarter given the Federal Reserve Board's aggressive
monetary actions.
Q. TURNING TO YOU, STEVE, WHAT'S YOUR OUTLOOK FOR THE NEXT FEW MONTHS?
S.P. For the past couple of years, the market has narrowed to the
point where technology is about the only driver of market performance.
The good news is that with technology stocks having done so well for
such a long period of time, most other stocks look pretty cheap, so I
now have the opportunity to enhance the quality of the fund's
portfolio by adding more large, high-quality stocks. Over time, these
good companies - household names that happen to be in the wrong end of
the market - should benefit the fund.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: income and capital
growth consistent with
reasonable risk
FUND NUMBER: 004
TRADING SYMBOL: FPURX
START DATE: April 16, 1947
SIZE: as of January 31,
2000, more than $22.9
billion
MANAGER: Steve Petersen,
since February 2000;
manager, Fidelity
Equity-Income Fund, since
1993; manager, Fidelity
Balanced Fund, 1996-
1997; manager, various
institutional accounts, since
1987; joined Fidelity in
1980
STEVE PETERSEN ON HIS
MANAGEMENT STYLE:
"At this point, I don't think that
shareholders should anticipate any
major changes in the way the fund is
managed. Up to this point, the fund
has been managed with a value
bias, though Bettina had slightly
more of an emphasis on
conservative growth stocks. So, in
general, there should not be a great
deal of difference going forward.
The fund will still follow the same
guidelines and goals. In terms of
asset allocation, the industries
and sectors represented in the
fund's portfolio should also
remain similar.
"One difference is that I tend to hold
a slightly higher number of
securities in the funds I manage than
Bettina, but not by a significant
amount. As for the fund's
fixed-income holdings, they will also
continue to be focused on
intermediate-term,
investment-grade securities.
"The only noticeable change in the
near term will probably be the
addition of some high-quality stocks
of `household name' companies that
look cheap now. I'll continue to focus
on adding value on the equity side,
while trying to match the
performance of the fund's
benchmark on the fixed-income
side."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF JANUARY
31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Exxon Mobil Corp. 3.7 2.7
Chase Manhattan Corp. 3.4 2.6
General Electric Co. 2.6 2.2
American Express Co. 2.6 2.3
Fannie Mae 2.4 2.4
14.7 12.2
TOP FIVE BOND ISSUERS AS OF
JANUARY 31, 2000
(WITH MATURITIES GREATER THAN % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
ONE YEAR) MONTHS AGO
Fannie Mae 8.8 7.9
U.S. Treasury Obligations 6.8 3.4
Government National Mortgage 2.1 2.1
Association
CS First Boston Mortgage 0.4 0.5
Securities Corp.
News America Holdings, Inc. 0.4 0.2
18.5 14.1
TOP FIVE MARKET SECTORS AS OF
JANUARY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
FINANCE 18.4 19.3
TECHNOLOGY 10.3 6.8
ENERGY 9.7 8.7
UTILITIES 8.9 9.4
MEDIA & LEISURE 8.6 7.8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF JANUARY 31, 2000 * AS OF JULY 31, 1999 **
Stocks 64.4% Stocks 63.7%
Bonds 34.1% Bonds 31.3%
Convertible Securities 1.6% Convertible Securities 0.8%
Short-Term Investments and Short-Term Investments and
Net Other Assets (0.1)%A Net Other Assets 4.2%
* FOREIGN INVESTMENTS 7.3% ** FOREIGN INVESTMENTS 7.6%
Row: 1, Col: 1, Value: 64.40000000000001 Row: 1, Col: 1, Value: 63.7
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 31.3
Row: 1, Col: 4, Value: 34.1 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.6 Row: 1, Col: 5, Value: 0.8
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 4.2
</TABLE>
A SHORT-TERM INVESTMENTS AND NET OTHER ASSETS ARE NOT INCLUDED IN THE
PIE CHART.
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS JANUARY 31, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 63.4%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 2.3%
AEROSPACE & DEFENSE - 1.7%
Boeing Co. 2,559,400 $ 113,413
Honeywell International, Inc. 750,000 36,000
Rockwell International Corp. 400,000 19,775
Textron, Inc. 2,753,500 164,350
United Technologies Corp. 1,220,400 64,605
398,143
SHIP BUILDING & REPAIR - 0.6%
General Dynamics Corp. 2,750,000 129,594
TOTAL AEROSPACE & DEFENSE 527,737
BASIC INDUSTRIES - 2.2%
CHEMICALS & PLASTICS - 1.0%
Dow Chemical Co. 402,600 46,903
Engelhard Corp. 1,280,300 20,405
Great Lakes Chemical Corp. 600,000 19,875
Praxair, Inc. 3,505,100 142,176
229,359
IRON & STEEL - 0.1%
AK Steel Holding Corp. 875,000 8,859
Nucor Corp. 400,000 19,900
28,759
METALS & MINING - 1.0%
Alcoa, Inc. 3,280,000 228,575
PACKAGING & CONTAINERS - 0.0%
Owens-Illinois, Inc. (a) 200,000 3,663
PAPER & FOREST PRODUCTS - 0.1%
Smurfit-Stone Container Corp. 315,000 6,241
(a)
TOTAL BASIC INDUSTRIES 496,597
CONSTRUCTION & REAL ESTATE -
0.3%
BUILDING MATERIALS - 0.1%
Masco Corp. 1,719,200 34,277
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONSTRUCTION & REAL ESTATE -
CONTINUED
ENGINEERING - 0.2%
Fluor Corp. 927,500 $ 37,042
TOTAL CONSTRUCTION & REAL 71,319
ESTATE
DURABLES - 0.6%
CONSUMER DURABLES - 0.5%
Minnesota Mining & 934,800 87,521
Manufacturing Co.
Snap-On, Inc. 510,000 13,706
101,227
HOME FURNISHINGS - 0.1%
Newell Rubbermaid, Inc. 1,000,000 30,000
TOTAL DURABLES 131,227
ENERGY - 9.3%
ENERGY SERVICES - 1.4%
Baker Hughes, Inc. 2,238,400 55,121
Halliburton Co. 5,559,200 200,131
Schlumberger Ltd. 865,300 52,837
308,089
OIL & GAS - 7.9%
Atlantic Richfield Co. 1,411,700 108,701
BP Amoco PLC 18,927,024 169,555
BP Amoco PLC sponsored ADR 5,912,438 317,794
Burlington Resources, Inc. 791,600 25,381
Conoco, Inc. Class B 2,201,823 51,880
Exxon Mobil Corp. 10,156,262 848,048
Royal Dutch Petroleum Co. (NY 1,066,400 58,719
Shares)
Total Fina SA:
Class B 655,800 81,647
sponsored ADR 1,975,400 122,969
USX - Marathon Group 1,173,300 30,139
1,814,833
TOTAL ENERGY 2,122,922
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - 15.0%
BANKS - 4.4%
Bank of America Corp. 700,000 $ 33,906
Bank of New York Co., Inc. 413,700 16,807
Bank One Corp. 1,000,000 29,813
Chase Manhattan Corp. 9,707,600 780,855
Comerica, Inc. 800,000 35,350
FleetBoston Financial Corp. 600,000 18,863
Mellon Financial Corp. 1,700,600 58,352
Wells Fargo & Co. 775,000 31,000
1,004,946
CREDIT & OTHER FINANCE - 4.3%
American Express Co. 3,635,127 599,114
Arcadia Financial Ltd. 361 0
warrants 3/15/07 (a)
Associates First Capital 2,816,210 56,324
Corp. Class A
Citigroup, Inc. 5,297,928 304,300
Household International, Inc. 800,000 28,200
987,938
FEDERAL SPONSORED CREDIT - 4.3%
Fannie Mae 8,999,850 539,429
Freddie Mac 8,845,100 443,913
983,342
INSURANCE - 1.5%
ACE Ltd. 777,400 13,750
American International Group, 1,728,825 180,014
Inc.
Everest Reinsurance Holdings, 166,900 4,204
Inc.
Hartford Financial Services 2,817,800 107,429
Group, Inc.
The Chubb Corp. 195,100 10,974
UnumProvident Corp. 500,000 13,375
329,746
SAVINGS & LOANS - 0.0%
TCF Financial Corp. 300,000 6,881
SECURITIES INDUSTRY - 0.5%
ECM Corp. LP (g) 6,318 556
Morgan Stanley Dean Witter & 1,785,200 118,270
Co.
118,826
TOTAL FINANCE 3,431,679
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 6.9%
DRUGS & PHARMACEUTICALS - 5.6%
Bristol-Myers Squibb Co. 4,485,700 $ 296,056
Eli Lilly & Co. 5,262,700 351,943
Merck & Co., Inc. 3,806,100 299,968
Schering-Plough Corp. 4,563,600 200,798
Warner-Lambert Co. 1,485,300 141,011
1,289,776
MEDICAL EQUIPMENT & SUPPLIES
- - 1.3%
Abbott Laboratories 4,570,400 149,109
Baxter International, Inc. 696,000 44,457
Cardinal Health, Inc. 397,800 19,020
Johnson & Johnson 852,500 73,368
285,954
TOTAL HEALTH 1,575,730
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.9%
ELECTRICAL EQUIPMENT - 2.6%
General Electric Co. 4,511,200 601,681
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.3%
Caterpillar, Inc. 1,314,800 55,797
Deere & Co. 2,528,500 110,464
Ingersoll-Rand Co. 1,674,200 78,792
ITT Industries, Inc. 244,100 7,720
Parker-Hannifin Corp. 1,052,600 45,525
The Stanley Works 60,800 1,528
299,826
TOTAL INDUSTRIAL MACHINERY & 901,507
EQUIPMENT
MEDIA & LEISURE - 5.0%
BROADCASTING - 1.8%
Benedek Communications Corp. 51,900 104
warrants 7/1/07 (a)
CBS Corp. (a) 3,410,200 198,857
CS Wireless Systems, Inc. 911 0
(a)(g)
MediaOne Group, Inc. (a) 419,100 33,318
NTL, Inc. warrants 10/14/08 16,463 823
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Time Warner, Inc. 2,121,502 $ 169,588
UIH Australia/Pacific, Inc. 26,110 783
warrants 5/15/06 (a)
403,473
ENTERTAINMENT - 1.7%
Alliance Gaming Corp. (a)(k) 3,043 10
Fox Entertainment Group, Inc. 617,400 14,509
Class A (a)
News Corp. Ltd. sponsored:
ADR 1,541,200 73,881
ADR (preferred ltd. vtg.) 831,200 33,975
Viacom, Inc. Class B 3,891,100 215,470
(non-vtg.) (a)
Walt Disney Co. 1,476,300 53,608
391,453
LODGING & GAMING - 0.0%
Motels of America, Inc. (a) 3,000 50
PUBLISHING - 0.8%
McGraw-Hill Companies, Inc. 2,938,000 164,712
Reader's Digest Association, 400,000 15,100
Inc. Class A (non-vtg.)
179,812
RESTAURANTS - 0.7%
McDonald's Corp. 4,418,200 164,302
TOTAL MEDIA & LEISURE 1,139,090
NONDURABLES - 2.2%
BEVERAGES - 0.6%
Anheuser-Busch Companies, 52,610 3,551
Inc.
Brown-Forman Corp. Class B 599,600 33,540
Seagram Co. Ltd. 1,616,500 92,828
129,919
FOODS - 0.1%
Flowers Industries, Inc. 775,800 9,455
Nabisco Group Holdings Corp. 1,545,600 13,331
Nabisco Holdings Corp. Class A 278,800 8,416
31,202
HOUSEHOLD PRODUCTS - 1.2%
Avon Products, Inc. 1,888,900 60,091
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Clorox Co. 761,200 $ 36,347
Dial Corp. 279,500 4,489
Gillette Co. 200,000 7,525
Procter & Gamble Co. 1,019,500 102,842
Unilever NV (NY Shares) 772,565 35,731
Unilever PLC 3,545,982 22,827
269,852
TOBACCO - 0.3%
Philip Morris Companies, Inc. 3,558,240 74,501
TOTAL NONDURABLES 505,474
RETAIL & WHOLESALE - 0.9%
APPAREL STORES - 0.1%
Mothers Work, Inc. (k) 2,416 24
The Limited, Inc. 500,000 15,344
TJX Companies, Inc. 1,000,000 16,313
31,681
GENERAL MERCHANDISE STORES -
0.8%
Ames Department Stores, Inc. 108,200 2,259
(a)
Target Corp. 1,827,000 120,696
Wal-Mart Stores, Inc. 1,172,100 64,172
187,127
TOTAL RETAIL & WHOLESALE 218,808
SERVICES - 0.0%
EDUCATIONAL SERVICES - 0.0%
SkillSoft Corp. 7,500 105
SERVICES - 0.0%
Viad Corp. 500,300 13,164
TOTAL SERVICES 13,269
TECHNOLOGY - 9.3%
COMMUNICATIONS EQUIPMENT - 1.2%
Cisco Systems, Inc. (a) 1,500,000 164,250
Lucent Technologies, Inc. 1,242,000 68,621
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Telefonaktiebolaget LM 600,000 $ 44,738
Ericsson sponsored ADR
Turnstone Systems, Inc. 4,300 125
277,734
COMPUTER SERVICES & SOFTWARE
- - 1.4%
Automatic Data Processing, 1,741,600 82,617
Inc.
Computer Sciences Corp. (a) 499,500 45,892
Microsoft Corp. (a) 1,400,000 137,025
Unisys Corp. (a) 1,453,300 46,324
311,858
COMPUTERS & OFFICE EQUIPMENT
- - 3.7%
Compaq Computer Corp. 5,091,700 139,385
EMC Corp. (a) 2,178,600 232,021
Hewlett-Packard Co. 1,206,900 130,647
International Business 682,500 76,568
Machines Corp.
Pitney Bowes, Inc. 5,473,980 268,225
846,846
ELECTRONIC INSTRUMENTS - 0.0%
Sequenom, Inc. 7,500 195
ELECTRONICS - 3.0%
Insilco Corp. warrants 5,660 0
8/15/07 (a)
Intel Corp. 500,000 49,469
Intersil Holding Corp. 5,510 1,378
warrants 8/15/09 (a)(g)
Motorola, Inc. 1,131,200 154,692
Quantum Effect Devices, Inc. 5,500 88
Texas Instruments, Inc. 2,507,400 270,486
Tyco International Ltd. 5,191,524 221,938
698,051
TOTAL TECHNOLOGY 2,134,684
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.0%
Southwest Airlines Co. 151,800 2,419
RAILROADS - 0.5%
Burlington Northern Santa Fe 2,952,500 71,045
Corp.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TRANSPORTATION - CONTINUED
RAILROADS - CONTINUED
CSX Corp. 1,141,100 $ 33,377
Union Pacific Corp. 107,600 4,304
108,726
TOTAL TRANSPORTATION 111,145
UTILITIES - 5.0%
CELLULAR - 0.4%
ALLTEL Corp. 1,227,700 81,949
Loral Orion Network Systems,
Inc.:
warrants 1/15/07 (CV ratio 41,555 332
.47) (a)
warrants 1/15/07 (CV ratio 8,090 81
.6) (a)
McCaw International Ltd. 40,960 102
warrants 4/16/07 (a)(g)
Orbital Imaging Corp. 630 13
warrants 3/1/05 (a)(g)
82,477
ELECTRIC UTILITY - 0.4%
CMS Energy Corp. 1,393,200 41,796
DPL, Inc. 160,800 3,085
Entergy Corp. 1,840,700 45,902
PG&E Corp. 8,170 179
90,962
TELEPHONE SERVICES - 4.2%
AT&T Corp. 6,410,150 338,135
BCE, Inc. 61,500 6,266
Bell Atlantic Corp. 345,200 21,381
BellSouth Corp. 2,751,770 129,505
KMC Telecom Holdings, Inc. 5,620 14
warrants 4/15/08 (a)(g)
MCI WorldCom, Inc. (a) 1,853,100 85,127
Optel Communications Corp. 1,706,343 4,479
warrants 12/30/04 (a)(k)
Pathnet, Inc. warrants 12,390 124
4/15/08 (a)(g)
SBC Communications, Inc. 7,699,087 332,023
Sprint Corp. - FON Group 880,600 56,964
974,018
TOTAL UTILITIES 1,147,457
TOTAL COMMON STOCKS 14,528,645
(Cost $10,826,826)
PREFERRED STOCKS - 1.8%
SHARES VALUE (NOTE 1) (000S)
CONVERTIBLE PREFERRED STOCKS
- - 0.8%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Host Marriott Financial Trust 459,900 $ 15,263
$3.375 QUIPS (g)
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
ELECTRICAL EQUIPMENT - 0.1%
Loral Space & Communications 275,000 14,713
Ltd. Series C, $3.00 (g)
MEDIA & LEISURE - 0.6%
BROADCASTING - 0.6%
Cox Communications, Inc. 338,000 34,899
$6.858 PRIZES
MediaOne Group, Inc. 853,100 100,879
(Vodafone AirTouch PLC)
$3.63 PIES
135,778
ENTERTAINMENT - 0.0%
Premier Parks, Inc. $4.05 PIES 200,000 10,800
TOTAL MEDIA & LEISURE 146,578
UTILITIES - 0.0%
ELECTRIC UTILITY - 0.0%
Alliant Energy Resources, 72,900 5,194
Inc. $4.91 (g)
TOTAL CONVERTIBLE PREFERRED 181,748
STOCKS
NONCONVERTIBLE PREFERRED
STOCKS - 1.0%
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
R&B Falcon Corp. 13.875% 9,391 9,438
FINANCE - 0.0%
INSURANCE - 0.0%
American Annuity Group 6,030 5,114
Capital Trust II 8.875%
HEALTH - 0.0%
MEDICAL FACILITIES MANAGEMENT
- - 0.0%
Fresenius Medical Care 9,690 8,713
Capital Trust II 7.875%
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
Adelphia Communications Corp. 38,030 4,069
$13.00
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Citadel Broadcasting Co. 41,897 $ 4,672
Series B, 13.25% pay-in-kind
CSC Holdings, Inc.:
11.125% pay-in-kind 254,063 27,502
Series H, 11.75% pay-in-kind 139,540 15,245
Granite Broadcasting Corp. 7,239 7,384
12.75% pay-in-kind
58,872
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE
- - 0.0%
Concentric Network Corp. 5,523 5,716
13.5% pay-in-kind
COMPUTERS & OFFICE EQUIPMENT
- - 0.0%
Ampex Corp. 8% non-cumulative 723 1,128
TOTAL TECHNOLOGY 6,844
UTILITIES - 0.6%
CELLULAR - 0.3%
Nextel Communications, Inc.:
11.125% pay-in-kind 32,528 31,796
Series D, 13% pay-in-kind 28,561 29,418
61,214
ELECTRIC UTILITY - 0.0%
Entergy Gulf States, Inc. 29,829 2,897
Series A, adj. rate
TELEPHONE SERVICES - 0.3%
e.spire Communications, Inc.:
$127.50 pay-in-kind 9,400 2,914
14.75% pay-in-kind 2,895 897
ICG Holdings, Inc.:
14% pay-in-kind 3 3
14.25% pay-in-kind 18,241 16,599
Intermedia Communications, 14,637 14,564
Inc. 13.5% pay-in-kind
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
NEXTLINK Communications, Inc. 652,423 $ 33,274
14% pay-in-kind
WinStar Communications, Inc. 5,509 6,060
14.25% (a)
74,311
TOTAL UTILITIES 138,422
TOTAL NONCONVERTIBLE 227,403
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 409,151
(Cost $376,385)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 14.2%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 0.8%
MEDIA & LEISURE - 0.6%
BROADCASTING - 0.3%
EchoStar Communications Corp. - $ 30,000 32,325
4.875% 1/1/07 (g)
Liberty Media Corp. 4% Baa3 17,982 24,152
11/15/29 (g)
56,477
PUBLISHING - 0.3%
News America Holdings, Inc. Baa3 78,390 75,940
liquid yield option notes 0%
3/11/13
TOTAL MEDIA & LEISURE 132,417
TECHNOLOGY - 0.1%
COMPUTERS & OFFICE EQUIPMENT
- - 0.1%
EMC Corp. 3.25% 3/15/02 Ba2 4,000 37,595
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - 0.1%
CELLULAR - 0.1%
Nextel Communications, Inc. B1 $ 19,070 $ 18,164
5.25% 1/15/10 (g)
TOTAL CONVERTIBLE BONDS 188,176
NONCONVERTIBLE BONDS - 13.4%
AEROSPACE & DEFENSE - 0.2%
DEFENSE ELECTRONICS - 0.2%
Raytheon Co.:
5.95% 3/15/01 Baa2 24,250 23,794
6.3% 8/15/00 Baa2 5,000 4,975
6.45% 8/15/02 Baa2 11,360 10,968
39,737
SHIP BUILDING & REPAIR - 0.0%
Newport News Shipbuilding, B1 3,680 3,625
Inc. 9.25% 12/1/06
TOTAL AEROSPACE & DEFENSE 43,362
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.3%
Avecia Group PLC 11% 7/1/09 B2 4,510 4,623
Huntsman Corp.:
9.5% 7/1/07 (g) B2 5,960 5,617
9.5% 7/1/07 (g) B2 22,170 20,895
Huntsman ICI Chemicals LLC B2 6,970 7,040
10.125% 7/1/09 (g)
Lyondell Chemical Co.:
9.625% 5/1/07 Ba3 6,550 6,468
9.875% 5/1/07 Ba3 8,360 8,256
10.875% 5/1/09 B2 10,830 10,749
Monsanto Co. 6% 12/1/05 (g) A2 3,000 2,763
66,411
IRON & STEEL - 0.0%
Republic Tech International B3 5,930 2,906
LLC/RTI Capital Corp. 13.75%
7/15/09 unit (g)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 0.1%
Kaiser Aluminum & Chemical
Corp.:
9.875% 2/15/02 B1 $ 1,430 $ 1,384
12.75% 2/1/03 B3 4,510 4,465
Metals USA, Inc. 8.625% B2 4,280 3,852
2/15/08
9,701
PACKAGING & CONTAINERS - 0.1%
Gaylord Container Corp. Caa1 11,085 10,032
9.375% 6/15/07
Packaging Corp. of America B3 10,860 10,860
9.625% 4/1/09
20,892
PAPER & FOREST PRODUCTS - 0.1%
APP Finance II Mauritius Ltd. B3 4,045 2,427
12% 3/15/04
Container Corp. of America B2 1,020 1,034
gtd. 9.75% 4/1/03
Fort James Corp. 6.625% Baa2 3,010 2,869
9/15/04
Millar Western Forest B3 11,820 11,643
Products Ltd. 9.875% 5/15/08
Repap New Brunswick, Inc. Caa1 4,960 4,538
yankee 10.625% 4/15/05
Stone Container Corp.:
10.75% 10/1/02 B1 5,340 5,500
12.58% 8/1/16 (i) B2 810 855
28,866
TOTAL BASIC INDUSTRIES 128,776
CONSTRUCTION & REAL ESTATE -
0.3%
CONSTRUCTION - 0.0%
Del Webb Corp. 10.25% 2/15/10 B2 3,810 3,277
Great Lakes Dredge & Dock B3 7,800 8,112
Corp. 11.25% 8/15/08
11,389
REAL ESTATE - 0.1%
Duke Realty LP 7.3% 6/30/03 Baa1 10,000 9,757
LNR Property Corp. 9.375% B1 13,585 12,277
3/15/08
22,034
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
CenterPoint Properties Trust Baa2 $ 8,720 $ 8,004
6.75% 4/1/05
Equity Office Properties Trust:
6.625% 2/15/05 Baa1 10,300 9,672
6.75% 2/15/08 Baa1 17,690 16,151
7.25% 2/15/18 Baa1 6,005 5,332
ProLogis Trust 6.7% 4/15/04 Baa1 4,865 4,555
43,714
TOTAL CONSTRUCTION & REAL 77,137
ESTATE
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES -
0.0%
Tenneco, Inc. 11.625% B2 7,170 7,313
10/15/09 (g)
TEXTILES & APPAREL - 0.0%
Worldtex, Inc. 9.625% 12/15/07 B1 1,800 1,431
TOTAL DURABLES 8,744
ENERGY - 0.3%
COAL - 0.0%
P&L Coal Holdings Corp. B2 8,740 8,205
9.625% 5/15/08
ENERGY SERVICES - 0.0%
RBF Finance Co. 11.375% Ba3 2,460 2,595
3/15/09
OIL & GAS - 0.3%
Anadarko Petroleum Corp. 7.2% Baa1 23,125 20,895
3/15/29
Apache Corp.:
7.625% 7/1/19 Baa1 6,435 6,108
7.7% 3/15/26 Baa1 4,785 4,631
Apache Finance Property Ltd. Baa1 5,010 4,570
6.5% 12/15/07
Belden & Blake Corp. 9.875% Caa3 2,280 1,072
6/15/07
Chesapeake Energy Corp.:
7.875% 3/15/04 B3 1,160 1,027
8.5% 3/15/12 B3 1,120 896
9.625% 5/1/05 B3 5,896 5,513
Conoco, Inc. 5.9% 4/15/04 A3 7,300 6,877
Great Lakes Carbon Corp. B3 5,975 5,587
10.25% 5/15/08 pay-in-kind
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Plains Resources, Inc.:
Series B 10.25% 3/15/06 B2 $ 3,980 $ 3,861
Series D 10.25% 3/15/06 B2 1,905 1,848
Seven Seas Petroleum, Inc. Caa1 1,510 453
12.5% 5/15/05
YPF Sociedad Anonima:
7.75% 8/27/07 B1 1,900 1,797
8% 2/15/04 B1 3,800 3,718
68,853
TOTAL ENERGY 79,653
FINANCE - 3.3%
BANKS - 1.7%
ABN-Amro Bank NV, Chicago A1 28,500 28,073
6.625% 10/31/01
BankBoston Corp. 6.625% 2/1/04 A3 9,640 9,291
BanPonce Financial Corp. A3 18,240 18,037
6.75% 8/9/01
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 19,950 19,865
5.95% 7/15/01 A1 40,800 39,917
Capital One Bank 6.375% Baa2 20,000 19,141
2/15/03
Capital One Financial Corp. Baa3 20,300 18,665
7.125% 8/1/08
FleetBoston Financial Corp. A3 2,700 2,618
7.375% 12/1/09
HSBC Finance Nederland BV A2 3,000 2,957
7.4% 4/15/03 (g)
Kansallis-Osake-Pankki (NY A2 5,285 5,529
Branch) yankee 10% 5/1/02
Korea Development Bank:
6.625% 11/21/03 Baa2 14,825 14,073
7.375% 9/17/04 Baa2 3,890 3,749
yankee 6.5% 11/15/02 Baa2 1,990 1,908
MBNA Corp.:
6.34% 6/2/03 Baa2 6,475 6,151
6.875% 11/15/02 Baa2 29,550 28,827
Midlantic Corp. 9.2% 8/1/01 A3 11,550 11,791
National Westminster Bank PLC Aa3 9,775 9,400
7.375% 10/1/09
NationsBank NA 5.92% 6/8/01 Aa2 18,500 18,064
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Provident Bank 6.125% 12/15/00 A3 $ 27,500 $ 27,325
Providian National Bank:
6.25% 5/7/01 Baa3 20,195 19,809
6.75% 3/15/02 Baa3 7,805 7,593
Sanwa Finance Aruba AEC 8.35% Baa1 45,800 45,367
7/15/09
Summit Bancorp 8.625% 12/10/02 BBB+ 6,750 6,893
Union Planters National Bank A3 13,000 13,054
6.81% 8/20/01
378,097
CREDIT & OTHER FINANCE - 1.4%
Ahmanson Capital Trust I A3 6,500 6,208
8.36% 12/1/26 (g)
Ameriserve Finance B2 4,300 2,580
Trust/Ameriserve Capital
Corp. 12% 9/15/06 (g)
AMRESCO, Inc.:
9.875% 3/15/05 Caa3 7,640 5,042
10% 3/15/04 Caa3 1,230 726
Associates Corp. of North
America:
6% 4/15/03 Aa3 9,550 9,161
6% 7/15/05 Aa3 45,500 42,270
AT&T Capital Corp.:
6.25% 5/15/01 A1 40,260 39,774
7.5% 11/15/00 A1 13,530 13,602
CIT Group, Inc. 5.5% 2/15/04 A1 4,850 4,498
ERP Operating LP:
6.55% 11/15/01 A3 7,000 6,844
7.1% 6/23/04 A3 10,300 9,963
Finova Capital Corp. 6.27% Baa1 2,080 2,073
9/29/00
First Security Capital I A3 16,730 15,665
8.41% 12/15/26
Ford Motor Credit Co. 6.5% A1 24,230 23,805
2/28/02
GS Escrow Corp. 7.125% 8/1/05 Ba1 19,025 16,833
Imperial Credit Capital Trust B2 3,600 2,736
I 10.25% 6/14/02
Imperial Credit Industries B3 9,577 7,183
9.875% 1/15/07
Macsaver Financial Services,
Inc.:
7.4% 2/15/02 Ba2 2,110 1,224
7.6% 8/1/07 Ba2 3,032 1,516
7.875% 8/1/03 Ba2 5,170 2,585
Newcourt Credit Group, Inc. A1 20,080 19,368
6.875% 2/16/05
Popular North America, Inc. A3 10,000 9,858
7.375% 9/15/01
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
PX Escrow Corp. 0% 2/1/06 (e) B3 $ 2,550 $ 1,148
Spieker Properties LP 6.8% Baa2 22,460 21,348
5/1/04
Sprint Capital Corp.:
5.875% 5/1/04 Baa1 27,585 25,930
6.875% 11/15/28 Baa1 13,300 11,759
The Money Store, Inc. 7.3% A2 13,900 13,752
12/1/02
Trizec Finance Ltd. yankee Baa3 8,968 9,304
10.875% 10/15/05
TXU Eastern Funding 6.75% Baa1 5,720 5,208
5/15/09
331,963
SAVINGS & LOANS - 0.1%
Long Island Savings Bank FSB:
6.2% 4/2/01 Baa3 14,750 14,548
7% 6/13/02 Baa3 14,850 14,644
29,192
SECURITIES INDUSTRY - 0.1%
Amvescap PLC yankee 6.375% A3 13,050 12,411
5/15/03
ECM Corp. LP 14% 6/10/02 (g) - 36 35
12,446
TOTAL FINANCE 751,698
HEALTH - 0.1%
DRUGS & PHARMACEUTICALS - 0.0%
Global Health Sciences, Inc. Caa1 5,760 2,592
11% 5/1/08
MEDICAL FACILITIES MANAGEMENT
- - 0.1%
Fountain View, Inc. 11.25% Caa1 6,190 4,704
4/15/08
Harborside Healthcare Corp. B3 6,200 1,984
0% 8/1/08 (e)
Mariner Post-Acute Network, B3 9,440 94
Inc. 9.5% 11/1/07 (d)
Oxford Health Plans, Inc. 11% Caa1 10,285 9,822
5/15/05
Tenet Healthcare Corp. 8.125% Ba3 7,770 7,187
12/1/08
Unilab Corp. 12.75% 10/1/09 B3 5,840 5,957
(g)
29,748
TOTAL HEALTH 32,340
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
ELECTRICAL EQUIPMENT - 0.0%
Motors & Gears, Inc. 10.75% B3 $ 6,130 $ 6,069
11/15/06
Telex Communications, Inc. B2 5,330 3,358
10.5% 5/1/07
9,427
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.4%
Thermadyne Holdings Corp. 0% Caa1 11,150 4,906
6/1/08 (e)
Thermadyne Manufacturing LLC B3 7,810 6,482
9.875% 6/1/08
Tokheim Corp. 11.375% 8/1/08 B3 3,730 1,940
Tyco International Group SA:
6.875% 9/5/02 (g) Baa1 35,000 34,309
yankee 6.125% 6/15/01 Baa1 38,000 37,253
84,890
POLLUTION CONTROL - 0.3%
Allied Waste North America, B2 38,490 33,486
Inc. 10% 8/1/09
Envirosource, Inc. 9.75% Caa3 4,840 3,146
6/15/03
WMX Technologies, Inc.:
6.25% 10/15/00 Ba1 11,150 10,977
7.1% 8/1/26 Ba1 10,860 10,192
WMX Technologies, Inc. 7.7% Ba1 10,000 9,681
10/1/02
67,482
TOTAL INDUSTRIAL MACHINERY & 161,799
EQUIPMENT
MEDIA & LEISURE - 2.1%
BROADCASTING - 1.6%
Adelphia Communications Corp.:
7.75% 1/15/09 B1 7,930 6,840
9.875% 3/1/07 B1 4,460 4,399
Ascent Entertainment Group, B3 13,310 9,983
Inc. 0% 12/15/04 (e)
Century Communications Corp. B1 790 741
8.875% 1/15/07
Charter Communications
Holdings LLC/Charter
Communications Holdings
Capital Corp.:
0% 4/1/11 (e) B2 6,150 3,598
8.625% 4/1/09 B2 13,110 11,996
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Clear Channel Communications, Baa3 $ 5,420 $ 4,973
Inc. 7.25% 10/15/27
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa2 13,230 13,536
9% 9/1/08 Baa2 18,140 19,339
Cox Communications, Inc. Baa2 9,320 9,300
7.75% 8/15/06
Diamond Cable Communications
PLC:
0% 2/15/07 (e) B3 8,480 6,720
yankee 0% 12/15/05 (e) B3 2,630 2,505
Earthwatch, Inc. 0% 7/15/07 - 11,190 7,833
unit (e)(g)
EchoStar DBS Corp. 9.375% B2 12,030 11,789
2/1/09
International Cabletel, Inc. B3 20,440 18,958
0% 2/1/06 (e)
LIN Holdings Corp. 0% 3/1/08 B3 6,991 4,474
(e)
Nielsen Media Research, Inc. Baa2 11,355 10,954
7.6% 6/15/09
NTL Communications Corp. B3 8,890 9,335
11.5% 10/1/08
NTL, Inc. 0% 4/1/08 (e) B3 2,115 1,406
Olympus Communications B1 10,275 10,429
LP/Olympus Capital Corp.
10.625% 11/15/06
Satelites Mexicanos SA de CV:
9.75% 6/30/04 (g)(i) B1 9,397 8,786
10.125% 11/1/04 B3 15,780 11,362
TCI Communications, Inc.:
8.25% 1/15/03 A2 23,130 23,693
9.8% 2/1/12 A2 20,180 23,199
TCI Communications Financing A3 13,120 14,498
III 9.65% 3/31/27
Telewest PLC 0% 10/1/07 (e) B1 20,720 19,425
Time Warner, Inc.:
6.85% 1/15/26 Baa3 19,000 18,531
8.18% 8/15/07 Baa3 5,425 5,503
UIH Australia/Pacific, Inc.:
Series B 0% 5/15/06 (e) B2 24,670 21,340
Series D 0% 5/15/06 (e) B2 4,020 3,477
United International B3 27,390 17,940
Holdings, Inc. 0% 2/15/08 (e)
United Pan-Europe
Communications NV:
0% 2/1/10 (e)(g) B2 10,525 5,578
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
United Pan-Europe
Communications NV: - continued
10.875% 8/1/09 B2 $ 8,860 $ 8,639
11.25% 2/1/10 (g) B2 3,565 3,583
USA Networks, Inc./USANi LLC Baa3 8,340 7,900
6.75% 11/15/05
362,562
ENTERTAINMENT - 0.2%
AMC Entertainment, Inc.:
9.5% 3/15/09 B3 3,920 3,136
9.5% 2/1/11 B3 550 440
Cinemark USA, Inc. 9.625% B2 1,970 1,675
8/1/08
Hollywood Entertainment Corp. B3 1,620 1,450
10.625% 8/15/04
Paramount Communications, Baa3 3,325 3,307
Inc. 7.5% 1/15/02
Premier Parks, Inc. 0% 4/1/08 B3 10,300 6,798
(e)
Regal Cinemas, Inc.:
8.875% 12/15/10 Caa1 1,800 1,134
9.5% 6/1/08 Caa1 11,860 8,124
Viacom, Inc. 6.75% 1/15/03 Baa3 21,600 21,061
47,125
LEISURE DURABLES & TOYS - 0.0%
Marvel Enterprises, Inc. 12% - 8,410 7,653
6/15/09
LODGING & GAMING - 0.1%
Horseshoe Gaming LLC 8.625% B2 30 28
5/15/09
KSL Recreation Group, Inc. B3 9,390 9,132
10.25% 5/1/07
Signature Resorts, Inc.:
9.25% 5/15/06 B2 8,500 5,610
9.75% 10/1/07 B3 13,680 6,156
20,926
PUBLISHING - 0.1%
News America Holdings, Inc. Baa3 6,180 6,351
8.5% 2/15/05
News America, Inc. 6.625% Baa3 4,425 4,082
1/9/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Time Warner Entertainment Co.
LP:
7.25% 9/1/08 Baa2 $ 6,575 $ 6,323
8.375% 3/15/23 Baa2 3,481 3,564
20,320
RESTAURANTS - 0.1%
AFC Enterprises, Inc. 10.25% B3 5,275 5,209
5/15/07
CKE Restaurants, Inc. 9.125% B2 6,030 4,643
5/1/09
NE Restaurant, Inc. 10.75% B3 2,160 1,895
7/15/08
11,747
TOTAL MEDIA & LEISURE 470,333
NONDURABLES - 0.4%
BEVERAGES - 0.1%
Seagram JE & Sons, Inc. Baa3 20,110 18,990
6.625% 12/15/05
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 22,725 21,439
International Home Foods, B2 1,670 1,687
Inc. 10.375% 11/1/06
23,126
HOUSEHOLD PRODUCTS - 0.0%
AKI Holding Corp. 0% 7/1/09 Caa1 1,930 897
(e)
TOBACCO - 0.2%
Philip Morris Companies, Inc. A2 27,190 25,716
7% 7/15/05
RJ Reynolds Tobacco Holdings, Baa2 16,800 15,636
Inc. 7.375% 5/15/03
41,352
TOTAL NONDURABLES 84,365
RETAIL & WHOLESALE - 0.6%
APPAREL STORES - 0.1%
Mothers Work, Inc. 12.625% B3 6,090 6,090
8/1/05
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Specialty Retailers, Inc.:
8.5% 7/15/05 B2 $ 12,790 $ 3,965
9% 7/15/07 Caa2 6,720 1,008
11,063
DRUG STORES - 0.1%
Rite Aid Corp.:
6% 12/15/00 (g) B1 4,645 3,902
6.5% 12/15/05 (g) B1 24,320 16,051
7.125% 1/15/07 B1 7,925 5,151
25,104
GENERAL MERCHANDISE STORES -
0.3%
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa1 11,500 10,988
8.5% 6/15/03 Baa1 60,285 61,686
72,674
GROCERY STORES - 0.1%
Ameriserve Food Distribution, B3 5,280 1,531
Inc. 8.875% 10/15/06
Jitney-Jungle Stores of
America, Inc.:
10.375% 9/15/07 (d) C 1,450 18
12% 3/1/06 (d) Caa3 1,780 347
Kroger Co. 6% 7/1/00 Baa3 21,310 21,172
Pathmark Stores, Inc. 9.625% Caa3 2,750 2,035
5/1/03
25,103
TOTAL RETAIL & WHOLESALE 133,944
SERVICES - 0.2%
LEASING & RENTAL - 0.0%
Rent-A-Center, Inc. 11% B2 6,920 7,024
8/15/08
PRINTING - 0.1%
Sullivan Graphics, Inc. Caa1 10,940 11,268
12.75% 8/1/05
World Color Press, Inc. 7.75% Baa3 3,990 3,741
2/15/09
15,009
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
SERVICES - CONTINUED
SERVICES - 0.1%
AP Holdings, Inc. 0% 3/15/08 Caa2 $ 1,380 $ 511
(e)
Apcoa, Inc. 9.25% 3/15/08 Caa1 9,285 6,407
Medaphis Corp. 9.5% 2/15/05 Caa1 10,385 7,996
SITEL Corp. 9.25% 3/15/06 B3 1,240 1,110
16,024
TOTAL SERVICES 38,057
TECHNOLOGY - 0.9%
COMPUTER SERVICES & SOFTWARE
- - 0.2%
Concentric Network Corp. B- 4,690 5,042
12.75% 12/15/07
Covad Communications Group,
Inc.:
0% 3/15/08 (e) B3 10,584 6,774
12% 2/15/10 (g) B3 5,340 5,367
12.5% 2/15/09 B3 6,280 6,468
DecisionOne Corp. 9.75% B3 4,920 18
8/1/07 (d)
Exodus Communications, Inc. B- 9,510 9,700
10.75% 12/15/09 (g)
PSINet, Inc.:
10.5% 12/1/06 (g) B3 3,550 3,559
11% 8/1/09 B3 6,270 6,411
11.5% 11/1/08 B3 1,740 1,818
Verio, Inc.:
10.625% 11/15/09 (g) B3 3,520 3,626
11.25% 12/1/08 B3 1,250 1,313
50,096
COMPUTERS & OFFICE EQUIPMENT
- - 0.4%
Comdisco, Inc.:
5.95% 4/30/02 Baa1 19,000 18,170
6.375% 11/30/01 Baa1 24,500 23,933
7.25% 9/1/02 Baa1 37,350 36,820
9.25% 7/6/00 Baa2 7,625 7,715
9.28% 6/5/00 Baa1 2,000 2,019
9.3% 6/27/00 Baa2 2,000 2,020
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
Comdisco, Inc.: - continued
9.5% 1/28/02 Baa2 $ 2,580 $ 2,657
Globix Corp. 12.5% 2/1/10 (g) - 7,120 7,191
100,525
ELECTRONIC INSTRUMENTS - 0.1%
Telecommunications Techniques B3 15,230 13,897
Co. LLC 9.75% 5/15/08
ELECTRONICS - 0.2%
ChipPAC International Ltd. B3 3,820 3,935
12.75% 8/1/09 (g)
Communications Instruments, B3 2,790 2,316
Inc. 10% 9/15/04
Fairchild Semiconductor Corp. B3 6,370 6,338
10.375% 10/1/07
Hadco Corp. 9.5% 6/15/08 B2 7,680 7,296
Insilco Corp. 12% 8/15/07 B3 5,660 5,490
Intersil Corp. 13.25% 8/15/09 B3 5,510 6,171
(g)
Micron Technology, Inc. 6.5% B3 9,000 7,290
9/30/05 (k)
SCG Holding B2 7,170 7,600
Corp./Semiconductor
Components Industries LLC
12% 8/1/09 (g)
Viasystems, Inc. 9.75% 6/1/07 B3 675 510
46,946
TOTAL TECHNOLOGY 211,464
TRANSPORTATION - 0.5%
AIR TRANSPORTATION - 0.1%
Atlas Air, Inc. 8.77% 1/2/11 Ba2 8,728 8,400
Continental Airlines, Inc.
pass thru trust certificates:
7.434% 3/15/06 Baa1 5,265 5,094
7.73% 9/15/12 Baa1 3,425 3,332
Kitty Hawk, Inc. 9.95% B1 7,070 6,717
11/15/04
23,543
RAILROADS - 0.4%
Burlington Northern Santa Fe
Corp.:
6.53% 7/15/37 Baa2 20,000 19,014
6.875% 12/1/27 Baa2 12,000 10,509
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
TRANSPORTATION - CONTINUED
RAILROADS - CONTINUED
Burlington Northern Santa Fe
Corp.: - continued
7.29% 6/1/36 Baa2 $ 22,430 $ 21,248
Norfolk Southern Corp. 7.05% Baa1 39,550 38,497
5/1/37
89,268
SHIPPING - 0.0%
Holt Group, Inc. 9.75% 1/15/06 Caa1 2,345 1,466
TOTAL TRANSPORTATION 114,277
UTILITIES - 3.2%
CELLULAR - 0.8%
Cable & Wireless Baa1 54,965 53,532
Communications PLC 6.375%
3/6/03
Cellnet Data Systems, Inc.:
0% 10/1/07 (e) - 25,140 2,891
15% 2/7/00 (k) - 1,143 1,143
McCaw International Ltd. 0% Caa1 40,870 30,039
4/15/07 (e)
Metrocall, Inc.:
10.375% 10/1/07 B3 4,640 2,668
11% 9/15/08 B3 2,360 1,369
Millicom International Caa1 26,640 23,177
Cellular SA 0% 6/1/06 (e)
Nextel Communications, Inc. B1 11,250 10,828
9.375% 11/15/09 (g)
Nextel International, Inc. 0% Caa1 22,310 13,832
4/15/08 (e)
Orbital Imaging Corp.:
11.625% 3/1/05 CCC+ 1,890 1,238
11.625% 3/1/05 CCC+ 2,570 1,683
Orion Network Systems, Inc. B2 8,015 4,168
0% 1/15/07 (e)
PageMart Nationwide, Inc. 0% B3 12,395 11,651
2/1/05 (e)
PageMart Wireless, Inc. 0% Caa2 11,720 4,688
2/1/08 (e)
Telesystem International
Wireless, Inc.:
0% 6/30/07 (e) Caa1 11,050 7,293
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Telesystem International
Wireless, Inc.: - continued
0% 11/1/07 (e) Caa1 $ 12,540 $ 7,085
Voicestream Wireless B2 9,160 9,389
Corp./Voicestream Wireless
Holding Co. 10.375% 11/15/09
(g)
186,674
ELECTRIC UTILITY - 0.6%
Avon Energy Partners Holdings:
6.46% 3/4/08 (g) Baa2 25,500 22,812
6.73% 12/11/02 (g) Baa2 17,000 16,588
7.05% 12/11/07 (g) Baa2 18,000 16,500
DR Investments UK PLC yankee A2 32,000 31,526
7.1% 5/15/02 (g)
Israel Electric Corp. Ltd.:
7.75% 12/15/27 (g) A3 42,405 37,825
yankee 7.25% 12/15/06 (g) A3 9,250 8,642
Texas Utilities Co. 6.375% Baa3 13,890 12,524
1/1/08
146,417
GAS - 0.3%
CMS Panhandle Holding Co.:
6.125% 3/15/04 Baa3 11,950 11,239
7% 7/15/29 Baa3 9,050 8,040
Kern River Funding Corp. A3 20,000 19,740
6.72% 9/30/01 (g)
Southwest Gas Corp. 9.75% Baa2 20,650 21,366
6/15/02
60,385
TELEPHONE SERVICES - 1.5%
Allegiance Telecom, Inc. 0% B3 4,315 3,096
2/15/08 (e)
e.spire Communications, Inc. - 8,120 3,329
0% 7/1/08 (e)
Focal Communications Corp. B3 3,215 3,303
11.875% 1/15/10 (g)
GST Network Funding, Inc. 0% - 7,190 4,026
5/1/08 (e)
GST Equipment Funding, Inc. - 3,200 3,184
13.25% 5/1/07
GST Telecommunications, Inc. - 9,605 9,221
12.75% 11/15/07
GST USA, Inc. 0% 12/15/05 (e) - 8,185 6,323
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
Hyperion Telecommunications,
Inc.:
0% 4/15/03 (e) B3 $ 710 $ 632
12% 11/1/07 Caa1 2,135 2,210
ICG Holdings, Inc.:
0% 9/15/05 (e) B3 8,550 7,845
0% 5/1/06 (e) B3 3,560 2,857
ICG Services, Inc.:
0% 2/15/08 (e) B3 27,170 15,283
0% 5/1/08 (e) B3 2,010 1,095
KMC Telecom Holdings, Inc.:
0% 2/15/08 (e) Caa2 11,340 6,294
13.5% 5/15/09 Caa2 6,350 6,366
Logix Communications - 9,910 6,937
Enterprises, Inc. 12.25%
6/15/08
MCI WorldCom, Inc.:
6.4% 8/15/05 A3 9,695 9,208
8.875% 1/15/06 A3 28,746 30,062
Metromedia Fiber Network, B2 8,260 8,239
Inc. 10% 11/15/08
NEXTLINK Communications, Inc.:
0% 12/1/09 (e)(g) B2 1,770 996
10.75% 11/15/08 B3 230 231
10.75% 6/1/09 B2 7,260 7,314
Optel Communications Corp. - 9,938 9,317
15% 12/30/04 (k)
Pathnet, Inc. 12.25% 4/15/08 - 12,390 8,054
Rhythms NetConnections, Inc.:
0% 5/15/08 (e) B3 15,160 8,186
12.75% 4/15/09 B3 5,270 5,007
Telecomunicaciones de Puerto Baa2 16,450 15,349
Rico, Inc. 6.65% 5/15/06
Teleglobe Canada, Inc.:
7.2% 7/20/09 Baa1 32,523 30,360
7.7% 7/20/29 Baa1 33,319 30,431
Teligent, Inc.:
0% 3/1/08 (e) Caa1 11,550 6,699
11.5% 12/1/07 Caa1 3,890 3,744
WinStar Communications, Inc.:
0% 10/15/05 (e) Caa1 12,060 10,975
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
WinStar Communications, Inc.:
- - continued
0% 10/15/05 (e) Caa1 $ 19,150 $ 30,640
0% 3/15/08 (e) CCC 11,200 11,200
10% 3/15/08 CCC 11,235 10,449
15% 3/1/07 CCC 2,830 4,019
WinStar Equipment Corp. 12.5% B3 5,300 5,618
3/15/04
WinStar Equipment II Corp. CCC+ 2,350 2,468
12.5% 3/15/04
330,567
TOTAL UTILITIES 724,043
TOTAL NONCONVERTIBLE BONDS 3,059,992
TOTAL CORPORATE BONDS 3,248,168
(Cost $3,407,523)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 8.4%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 1.1%
Fannie Mae:
6.5% 8/15/04 Aaa 13,510 13,138
6.5% 4/29/09 Aaa 154,990 143,632
Federal Agricultural Mortgage
Corp.:
7.01% 8/10/03 Aaa 1,040 1,032
7.01% 8/10/04 Aaa 1,340 1,326
7.04% 8/10/05 Aaa 5,100 5,034
Freddie Mac 6.25% 7/15/04 Aaa 1,340 1,290
Government Loan Trusts Aaa 8,516 8,773
(assets of Trust guaranteed
by U.S. Government through
Agency for International
Development) 8.5% 4/1/06
Government Trust Certificates
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency):
Class 1-C, 9.25% 11/15/01 Aaa 12,059 12,317
Class 2-E, 9.4% 5/15/02 Aaa 7,393 7,567
Class T-3, 9.625% 5/15/02 Aaa 7,238 7,418
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Israel Export Trust Aaa $ 2,944 $ 2,934
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994-1, 6.88% 1/26/03
Overseas Private Investment - 28,696 27,858
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 2,111 2,090
7.9% 3/31/00 Aaa 12,750 12,786
247,195
U.S. TREASURY OBLIGATIONS -
7.3%
U.S. Treasury Bonds:
6.375% 8/15/27 Aaa 83,700 81,333
6.875% 8/15/25 Aaa 89,760 92,495
8% 11/15/21 Aaa 286,600 329,590
8.75% 5/15/17 Aaa 750 903
8.875% 8/15/17 Aaa 113,965 138,788
9.875% 11/15/15 Aaa 160,550 208,665
11.625% 11/15/04 Aaa 48,000 57,315
12% 5/15/05 Aaa 63,000 77,283
12.375% 5/15/04 Aaa 15,756 18,954
14% 11/15/11 Aaa 18,400 25,418
U.S. Treasury Notes:
4% 10/31/00 Aaa 106,500 104,752
6.5% 5/31/02 Aaa 135,400 134,892
6.625% 6/30/01 Aaa 12,950 12,956
7% 7/15/06 Aaa 281,700 285,002
U.S. Treasury Notes - coupon Aaa 221,100 100,421
STRIPS 0% 11/15/11
1,668,767
TOTAL U.S. GOVERNMENT AND 1,915,962
GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,982,848)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 10.2%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FANNIE MAE - 8.1%
5.5% 10/1/08 to 5/1/14 Aaa $ 185,529 $ 170,871
6% 10/1/08 to 1/1/29 Aaa 338,632 309,077
6.5% 12/1/06 to 8/1/29 Aaa 946,524 879,131
7% 5/1/23 to 10/1/29 Aaa 133,463 127,313
7.5% 8/1/07 to 10/1/29 Aaa 154,133 150,478
7.5% 1/1/28 (h) Aaa 6,765 6,600
8% 8/1/26 to 10/1/29 Aaa 56,265 56,131
8% 2/1/30 (h) Aaa 140,000 139,606
8.5% 1/1/09 to 7/1/21 Aaa 49 50
10% 8/1/17 Aaa 42 44
1,839,301
FREDDIE MAC - 0.0%
8% 10/1/16 to 4/1/20 Aaa 1,962 1,956
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 2.1%
6% 9/15/08 to 12/15/10 Aaa 19,674 18,615
6.5% 6/15/02 to 5/15/29 Aaa 197,535 182,766
7% 10/15/17 to 12/15/28 Aaa 78,665 74,866
7.5% 8/15/21 to 9/15/29 Aaa 142,937 139,895
8% 4/15/00 to 10/15/25 Aaa 49,967 50,193
8.5% 11/15/05 to 11/15/22 Aaa 3,395 3,475
9% 3/15/10 to 5/15/22 Aaa 645 673
9.5% 7/15/09 to 3/15/23 Aaa 5,671 5,999
10% 11/15/09 to 1/15/26 Aaa 6,899 7,384
11% 3/15/10 to 7/20/20 Aaa 2,155 2,348
486,214
TOTAL U.S. GOVERNMENT AGENCY 2,327,471
- - MORTGAGE SECURITIES
(Cost $2,443,315)
ASSET-BACKED SECURITIES - 0.7%
Airplanes pass through trust Ba2 5,041 4,134
10.875% 3/15/19
American Express Credit A1 14,200 13,387
Account Master Trust 6.1%
12/15/06
Arcadia Automobile Aaa 11,809 11,800
Receivables Trust 6.5%
6/17/02
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Chase Manhattan Grantor Trust:
6.61% 9/15/02 Aaa $ 5,614 $ 5,602
6.76% 9/15/02 A3 1,470 1,463
Chevy Chase Auto Receivables
Trust:
5.9% 7/15/03 Aaa 6,841 6,781
6.6% 12/15/02 Aaa 2,199 2,195
Contimortgage Home Equity Aaa 8,555 8,515
Loan Trust 6.26% 7/15/12
Discover Card Master Trust I A2 12,421 11,969
5.85% 11/16/04
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa2 14,100 13,763
6.4% 12/15/02 Baa2 8,660 8,444
6.87% 11/15/04 A2 13,200 12,971
Key Auto Finance Trust:
6.3% 10/15/03 A2 8,609 8,542
6.65% 10/15/03 Baa3 2,524 2,516
Premier Auto Trust 5.59% Aaa 42,000 40,399
2/9/04
TOTAL ASSET-BACKED SECURITIES 152,481
(Cost $157,151)
COMMERCIAL MORTGAGE
SECURITIES - 1.2%
ACP Mortgage LP Series 1, BBB 1,999 1,875
Class E 6.9716% 2/28/28
(g)(i)
Berkeley Federal Bank & Trust - 6,080 4,239
FSB Series 1994 Class 1B
7.3514% 8/1/24 (g)(i)
CBM Funding Corp. Series BBB 12,500 11,912
1996-1B Class C, 7.86% 2/1/08
CS First Boston Mortgage
Securities Corp.:
Series 1995-WF1 Class A-2, AAA 20,523 20,157
6.648% 12/21/27
Series 1997-C2 Class D, 7.27% Baa2 22,200 20,264
1/17/35
Series 1998-FL1:
Class D, 6.3275% 12/10/00 A2 20,100 20,006
(g)(i)
Class E, 6.6725% 1/10/13 Baa2 42,880 42,357
(g)(i)
Danmall Finance, Inc. Series - 2,461 2,497
1 Class D, 13.12% 10/21/24
Equitable Life Assurance A2 6,000 5,818
Society of the United States
Series 174 Class C-1, 7.52%
5/15/06 (g)
COMMERCIAL MORTGAGE
SECURITIES - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
First Chicago/Lennar Trust I
Series 1997-CHL1:
Class D, 8.1256% 4/13/39 (i) - $ 3,500 $ 2,792
Class E, 8.1256% 4/1/39 (i) - 2,900 2,041
General Motors Acceptance Ba3 3,500 2,715
Corp. Commercial Mortgage
Securities, Inc. Series
1996-C1 Class F, 7.86%
10/15/28 (g)
GS Mortgage Securities Corp. Baa3 20,000 16,790
II Series 1998-GLII Class E,
7.1905% 4/13/31 (g)(i)
LB Multifamily Mortgage Trust Caa1 2,554 2,043
Series 1991-4 Class A1,
7.2615% 4/25/21 (i)
Morgan Stanley Capital I, - 3,596 3,596
Inc. Series 1996-MBL1 Class
E, 8.2844% 5/25/21 (g)(i)
Nomura Asset Securities Corp. Baa2 55,000 48,383
Series 1998-D6 Class A-4,
7.5973% 3/17/28 (i)
Nomura Depositor Trust:
floater Series 1998-ST1A - 2,200 2,002
Class B2, 10.0313% 1/15/03
(g)(i)
Series 1998-ST1A Class B1A, - 3,500 3,215
8.5313% 1/15/03 (g)(i)
Penn Mutual Life Insurance - 6,500 4,048
Co. (The)/Penn Insurance &
Annuity Co. Series 1996-PML
Class K, 7.9% 11/15/26 (g)
Resolution Trust Corp.:
Series 1991-M2 Class A3, Baa3 1,027 832
6.9066% 9/25/20 (i)
Series 1995-C2 Class D, 7% Baa2 3,448 3,377
5/25/27
Structured Asset Securities
Corp.:
Series 1992-M1 Class C, 7.05% B2 2,200 2,042
11/25/02
Series 1995-C1:
Class E, 7.375% 9/25/24 (g) BB 7,896 6,905
Class F, 7.375% 9/25/24 (g) - 3,000 2,300
Series 1996 CFL Class E, BBB 11,188 10,905
7.75% 2/25/28
Series 1996-CFL Class G, B+ 3,500 2,894
7.75% 2/25/28 (g)
Thirteen Affiliates of Aaa 32,000 29,661
General Growth Properties,
Inc. sequential pay Series 1
Class A2, 6.602% 12/15/10 (g)
TOTAL COMMERCIAL MORTGAGE 275,666
SECURITIES
(Cost $288,512)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS (J) - 0.2%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Korean Republic yankee:
8.75% 4/15/03 Baa2 $ 7,025 $ 7,161
8.875% 4/15/08 Baa2 10,630 10,976
Province of Manitoba yankee Aa3 5,000 4,930
6.75% 3/1/03
Province of Quebec yankee A2 16,750 16,188
6.86% 4/15/26 (f)
Quebec Province yankee:
7.125% 2/9/24 A2 2,560 2,376
7.5% 7/15/23 A2 10,060 9,787
TOTAL FOREIGN GOVERNMENT AND 51,418
GOVERNMENT AGENCY OBLIGATIONS
(Cost $53,908)
SUPRANATIONAL OBLIGATIONS -
0.0%
Inter-American Development Aaa 10,850 10,185
Bank yankee 6.29% 7/16/27
(Cost $10,782)
CASH EQUIVALENTS - 0.6%
SHARES
Taxable Central Cash Fund, 145,951,968 145,952
5.45% (c) (Cost $145,952)
TOTAL INVESTMENT PORTFOLIO - 23,065,099
100.7%
(Cost $19,693,202)
NET OTHER ASSETS - (0.7)% (151,752)
NET ASSETS - 100% $ 22,913,347
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
PRIZES - Participating Redeemable
Indexed Zero-Premium
Exchangeable Securities
QUIPS - Quarterly Income Preferred
Securities
LEGEND
(a) Non-income producing
(b) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(c) The rate quoted is the annualized seven-day yield of the fund at
period end.
(d) Non-income producing - issuer filed for protection under the
Federal Bankruptcy Code or is in default of interest payment.
(e) 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.
(f) 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.
(g) 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 $630,030,000 or 2.7% of net assets.
(h) Security purchased on a delayed delivery or when-issued basis.
(i) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(j) 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.
(k) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
Alliance Gaming Corp. 7/28/98 $ 0
Cellnet Data Systems, Inc. 11/10/99 - 1/4/00 $ 1,143
15% 2/7/00
Micron Technology, Inc. 3/3/99 $ 6,965
6.5% 9/30/05
Mothers Work, Inc. 6/18/98 $ 21
Optel Communications Corp. 12/31/97 $ 506
warrants 12/30/04
Optel Communications Corp. 12/31/97 - 12/30/99 $ 9,432
15% 12/30/04
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 22.1% AAA, AA, A 21.4%
Baa 6.4% BBB 6.0%
Ba 0.6% BB 0.7%
B 3.3% B 3.5%
Caa 1.1% CCC 0.7%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.7%. FMR has
determined that unrated debt securities that are lower quality account
for 0.6% of the total value of investment in securities.
INCOME TAX INFORMATION
At January 31, 2000, the aggregate
cost of investment securities for income
tax purposes was $19,749,070,000.
Net unrealized appreciation aggre-
gated $3,316,029,000, of which $4,339,736,000 related to appreciated
investment securities and $1,023,707,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) JANUARY 31, 2000
ASSETS
Investment in securities, at $ 23,065,099
value (cost $19,693,202) -
See accompanying schedule
Cash 1,947
Receivable for investments 180,875
sold
Receivable for fund shares 13,927
sold
Dividends receivable 14,963
Interest receivable 105,080
Other receivables 1,094
TOTAL ASSETS 23,382,985
LIABILITIES
Payable for investments $ 197,178
purchased Regular delivery
Delayed delivery 147,421
Payable for fund shares 112,110
redeemed
Accrued management fee 8,357
Other payables and accrued 4,572
expenses
TOTAL LIABILITIES 469,638
NET ASSETS $ 22,913,347
Net Assets consist of:
Paid in capital $ 19,492,468
Undistributed net investment 62,189
income
Accumulated undistributed net (13,219)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 3,371,909
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS, for 1,231,377 $ 22,913,347
shares outstanding
NET ASSET VALUE, offering $18.61
price and redemption price
per share ($22,913,347
(divided by) 1,231,377
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED JANUARY 31, 2000
INVESTMENT INCOME $ 121,729
Dividends
Interest 333,129
Security lending 8
TOTAL INCOME 454,866
EXPENSES
Management fee $ 52,879
Transfer agent fees 24,735
Accounting and security 629
lending fees
Non-interested trustees' 45
compensation
Custodian fees and expenses 301
Registration fees 546
Audit 115
Legal 98
Reports to shareholders 480
Miscellaneous 52
Total expenses before 79,880
reductions
Expense reductions (1,862) 78,018
NET INVESTMENT INCOME 376,848
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 244,541
Foreign currency transactions (116) 244,425
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (1,064,234)
Assets and liabilities in (51) (1,064,285)
foreign currencies
NET GAIN (LOSS) (819,860)
NET INCREASE (DECREASE) IN $ (443,012)
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, 1999
2000
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 376,848 $ 816,171
income
Net realized gain (loss) 244,425 1,291,729
Change in net unrealized (1,064,285) (189,272)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (443,012) 1,918,628
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (382,062) (848,159)
From net investment income
From net realized gain (1,227,325) (1,843,513)
TOTAL DISTRIBUTIONS (1,609,387) (2,691,672)
Share transactions Net 1,825,449 4,290,936
proceeds from sales of shares
Reinvestment of distributions 1,536,777 2,565,257
Cost of shares redeemed (4,136,006) (5,283,873)
NET INCREASE (DECREASE) IN (773,780) 1,572,320
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) (2,826,179) 799,276
IN NET ASSETS
NET ASSETS
Beginning of period 25,739,526 24,940,250
End of period (including $ 22,913,347 $ 25,739,526
undistributed net investment
income of $62,189 and
$67,403, respectively)
OTHER INFORMATION
Shares
Sold 96,690 215,648
Issued in reinvestment of 79,873 140,924
distributions
Redeemed (218,351) (265,773)
Net increase (decrease) (41,788) 90,799
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED JANUARY 31, YEARS ENDED JULY 31,
2000 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 20.22 $ 21.09 $ 20.37 $ 17.34 $ 16.69 $ 15.93
of period
Income from Invest- ment
Operations
Net investment income .29 D .64 D .69 D .66 D .64 .42
Net realized and unrealized (.63) .73 1.68 4.57 1.00 1.53
gain (loss)
Total from investment (.34) 1.37 2.37 5.23 1.64 1.95
operations
Less Distributions
From net investment income (.30) (.68) (.69) (.66) (.55) (.44)
From net realized gain (.97) (1.56) (.96) (1.54) (.44) (.75)
Total distributions (1.27) (2.24) (1.65) (2.20) (.99) (1.19)
Net asset value, end of $ 18.61 $ 20.22 $ 21.09 $ 20.37 $ 17.34 $ 16.69
period
TOTAL RETURN B, C (1.81)% 8.03% 12.56% 33.63% 10.06% 13.03%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 22,913 $ 25,740 $ 24,940 $ 22,327 $ 16,699 $ 14,387
(in millions)
Ratio of expenses to average .64% A .64% .64% .67% .74% .77%
net assets
Ratio of expenses to average .63% A, E .63% E .63% E .66% E .72% E .77%
net assets after expense
reductions
Ratio of net invest- ment 3.04% A 3.23% 3.40% 3.69% 3.44% 3.50%
income to average net
assets
Portfolio turnover rate 72% A 80% 84% 80% 139% 76%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS
OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
D 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 2000
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, 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. Foreign equity securities are valued based on
quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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.
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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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
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.
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, foreign currency transactions, market discount,
partnerships, non-taxable dividends, and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
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.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
and other obligations found satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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 after the customary settlement period for that security. 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 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 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.
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, restricted securities (excluding 144A
issues) amounted to $22,263,000 or 0.1% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $8,634,219,000 and $9,597,505,000, respectively, of which
U.S. government and government agency obligations aggregated
$2,674,190,000 and $1,897,993,000, 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 .2167% 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 .43% 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 .20% 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 $303,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount 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. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end there were no loans
outstanding.
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 $1,190,000 under this arrangement.
In addition, through arrangements with the fund's custodian and
transfer agent, 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 $16,000 and $656,000, 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, 2000, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated, in
conformity with accounting principles generally accepted in the United
States. 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
auditing standards generally accepted in the United States 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, 2000, by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 13, 2000
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Money Management, Inc. (FIMM)
Fidelity Investments Japan Ltd.
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
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
* INDEPENDENT TRUSTEES
BAL-SANN-0300 95619
1.700677.102
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
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