SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-13420)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 15 [X]
and
REGISTRATION STATEMENT (No. 811-5150)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [X]
Fidelity Yen Performance Portfolio, L.P.
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( x ) on ( February 28, 1997 ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on February 20, 1997.
FIDELITY FOREIGN CURRENCY FUNDS:
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest
3 a .............................. Financial Highlights
b .............................. *
c, d .............................. Performance
4 a i............................. Charter
ii........................... The Funds at a Glance; Investment Principles and
Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. Cover Page; The Funds at a Glance; Charter;
Doing Business with Fidelity
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Cover Page; Charter
f .............................. Expenses
g i............................. Charter
g ii........................... *
5A .............................. Performance
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. Charter
c .............................. Transaction Details; Exchange Restrictions
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Cover Page; Charter
b .............................. Expenses; How to Buy Shares; Transaction Details
c .............................. Sales Charge Waivers
d .............................. How to Buy Shares
e .............................. *
f .............................. *
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
FIDELITY FOREIGN CURRENCY FUNDS:
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Funds
13 a - c ............................ Investment Policies and Limitations
d ............................ Portfolio Transactions
14 a - c ............................ Managing General Partners and Officers
15 a - c ............................ Managing General Partners and Officers
16 a i ............................ FMR; Portfolio Transactions
ii ............................ Managing General Partners and Officers
iii ............................ Management Contracts
b ............................ Management Contracts
c, d ............................ Contracts with FMR Affiliates
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Funds
i ............................ Contracts with FMR Affiliates
17 a - c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Funds
b ............................ *
19 a ............................ Additional Purchase and Redemption Information
b ............................ Additional Purchase and Redemption Information;
Valuation
c ............................ *
20 ............................ Distributions and Taxes
21 a, b ............................ Contracts with FMR Affiliates
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
FIDELITY
FOREIGN CURRENCY
FUNDS
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
each fund's most recent financial report and portfolio listing, or a copy
of the Statement of Additional Information (SAI) dated February 28, 1997.
The SAI has been filed with the Securities and Exchange Commission (SEC)
and is available along with other related materials on the SEC's
Internet Web site (http://www.sec.gov). The SAI is incorporated herein
by reference (legally forms a part of the prospectus). For a free copy of
either document, call Fidelity at 1-800-544-8888.
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.
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
CUR-pro-0297
Each of these funds seeks to approximate the performance of its reference
currency relative to the U.S. dollar while earning a reasonable level of
income.
FIDELITY YEN
PERFORMANCE PORTFOLIO, L.P.
(fund number 499)
FIDELITY STERLING
PERFORMANCE PORTFOLIO, L.P.
(fund number 498)
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
(fund number 497)
PROSPECTUS
FEBRUARY 28, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales
charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE WAIVERS
APPENDIX Summary of
Partnership Agreements.
KEY FACTS
THE FUNDS AT A GLANCE
STRATEGY: Invests in high-quality money market securities either
denominated in the foreign currency, or denominated in U.S. dollars but
coupled with investment techniques to perform as though they were
denominated in the foreign currency.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the management
arm of Fidelity Investments, which was established in 1946 and is now
America's largest mutual fund manager.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
YEN FUND
GOAL: Approximate the performance of the Japanese Yen relative to the U.S.
dollar while earning a reasonable level of income.
SIZE: As of December 31, 1996, the fund had over $ 2 million in
assets.
STERLING FUND
GOAL: Approximate the performance of the British Pound Sterling relative to
the U.S. dollar while earning a reasonable level of income.
SIZE: As of December 31, 1996, the fund had over $ 1 million in
assets.
DEUTSCHE MARK FUND
GOAL: Approximate the performance of the German Deutsche Mark relative to
the U.S. dollar while earning a reasonable level of income.
SIZE: As of December 31, 1996, the fund had over $ 6 million in
assets.
WHO MAY WANT TO INVEST
These non-diversified funds are designed for those who want to invest a
portion of their assets in one or more of three foreign currency markets. A
fund may be appropriate for investors who:
(small solid bullet) believe the reference foreign currency will appreciate
relative to the U.S. dollar;
(small solid bullet) want to protect against a decline in the purchasing
power of the U.S. dollar relative to that of the foreign currency; or
(small solid bullet) want to diversify their investments beyond
dollar-denominated securities.
Investors should understand that each fund's share price will change daily
and that income earned by a fund will not be distributed to shareholders as
dividends. Instead, it will be included in the fund's share price.
The value of the funds' investments and the income they generate will vary
from day to day, and generally reflect interest rates, market conditions,
and other economic and political news both here and abroad. Each fund's
performance will also significantly depend on currency values, foreign
economies, and other factors related to foreign investments. When you sell
your shares, they may be worth more or less than what you paid for them. By
themselves, the funds do not constitute a balanced investment plan.
Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result,
changes in the market value of a single issuer could cause greater
fluctuations in share value than would occur in a more diversified fund.
Under current federal tax law, certain "publicly traded partnerships"
are treated as corporations. The funds currently are covered by a 10-year
transition rule that preserves their tax status as partnerships, but the
rule will expire on December 31, 1997. Because of the termination of their
status as partnerships, the funds may be liquidated or their operations may
be modified significantly on or before December 31, 1997.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy,
sell, or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below $2,500.
See page and - for an explanation of how and when these charges apply.
Maximum sales charge on purchases 0.40
(as a % of offering price) %
Maximum sales charge on reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee $12.0
(for accounts under $2,500) 0
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. It also incurs other expenses for
services such as maintaining shareholder records and furnishing shareholder
statements and financial reports. A fund's expenses are factored into its
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following figures are based on historical expenses, and are calculated
as a percentage of average net assets.
YEN FUND
Management fee (after reimbursement) 0.00
%
12b-1 fee None
Other expenses (after reimbursement) 1.50
%
Total fund operating expenses 1.50
%
STERLING FUND
Management fee (after reimbursement) 0.00
%
12b-1 fee None
Other expenses (after reimbursement) 1.50
%
Total fund operating expenses 1.50
%
DEUTSCHE MARK FUND
Management fee (after reimbursement) 0.00
%
12b-1 fee None
Other expenses (after reimbursement) 1.50
%
Total fund operating expenses 1.50
%
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
After 1 year $ 19
After 3 years $ 51
After 5 years $ 86
After 10 years $ 18
3
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FMR has voluntarily agreed to temporarily limit each fund's operating
expenses to 1.50% of its average net assets. If these agreements were not
in effect, and there were no state expense limitations, the management fee,
other expenses, and total operating expenses would have been .50%,
4.74%, and 5.24%, respectively for the Yen Fund; .50%, 10.52% and
11.02% for Sterling Fund; and .50%, 1.93%, and 2.43% for
Deutsche Mark Fund. Expenses eligible for reimbursement do not include
interest, taxes, brokerage commissions, or extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for the Yen Fund, the Sterling
Fund, and the Deutsche Mark Fund have been audited by Coopers & Lybrand
L.L.P., independent accountants. The funds' financial highlights, financial
statements, and report of the auditor are included in the funds' Annual
Report, and are incorporated by reference into (are legally part of) the
funds' SAI. Contact Fidelity for a free copy of the Annual Report or
t he SAI.
YEN FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended 1996 1995 1994 1993 1992 1991 1990 1989E
December 31
Net asset value, $ 16.32 $ 16.93 $ 15.03 $ 13.29 $ 12.97 $ 11.28 $ 10.06 $ 10.00
beginning of
period
Income from
Investment
Operations
Net investment .63C .82C .47C .24C .28C .48 .60 .09C
income
Net realized and (2.54) (1.43) 1.43 1.50 .04 1.21 .62 (.03)
unrealized
gain (loss)
Total from (1.91) (.61) 1.90 1.74 .32 1.69 1.22 .06
investment
operations
Net asset value, $ 14.41 $ 16.32 $ 16.93 $ 15.03 $ 13.29 $ 12.97 $ 11.28 $ 10.06
end of period
Total returnA,B (11.70) (3.60) 12.64% 13.09% 2.47% 14.98% 12.13% .60%
% %
Net assets, end of $ 2,468 $ 2,893 $ 3,505 $ 2,253 $ 3,801 $ 4,796 $ 4,415 $ 572
period (000
omitted)
Ratio of expenses 1.50%D 1.50%D 1.50%D 1.50%D 1.50%D 1.50%D 1.50%D 1.50%D
to average net ,F
assets
Ratio of net 4.09% 4.38% 2.86% 1.56% 2.13% 4.43% 6.34% 8.35%F
investment income
to average net
assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
E FOR THE PERIOD NOVEMBER 16, 1989 (COMMENCEMENT OF SALE OF SHARES) TO
DECEMBER 31, 1989.
F ANNUALIZED
STERLING FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended December 1996 1995 1994 1993 1992 1991 1990 1989F
31
Net asset value, $ 15.37 $ 14.79 $ 13.46 $ 13.16 $ 14.97 $ 14.09 $ 10.32 $ 10.00
beginning of period
Income from
Investment Operations
Net investment .62C .68C .38C .22C .34C .55C .94 .09C
income
Net realized and 1.74 (.10)E .95 .08 (2.15) .33 2.83 .23
unrealized
gain (loss)
Total from 2.36 .58 1.33 .30 (1.81) .88 3.77 .32
investment operations
Net asset value, end $ 17.73 $ 15.37 $ 14.79 $ 13.46 $ 13.16 $ 14.97 $ 14.09 $ 10.32
of period
Total returnA,B 15.35 3.92% 9.88% 2.28% (12.09) 6.25% 36.53 3.20%
% % %
Net assets, end of $ 1,511 $ 1,021 $ 3,343 $ 3,684 $ 1,715 $ 10,85 $ 3,301 $ 366
period 7
(000 omitted)
Ratio of expenses to 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%
average D D D D D D D D,G
net assets
Ratio of net 3.92% 4.44% 2.69% 1.61% 2.27% 4.08% 6.77% 7.76%
investment income to G
average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
F FOR THE PERIOD NOVEMBER 16, 1989 (COMMENCEMENT OF SALE OF SHARES) TO
DECEMBER 31, 1989.
G ANNUALIZED
DEUTSCHE MARK FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended 1996 1995 1994 1993 1992 1991 1990 1989 E
December 31
Net asset value, $ 18.12 $ 16.33 $ 14.03 $ 14.20 $ 14.05 $ 13.27 $ 10.94 $ 10.00
beginning of
period
Income from
Investment
Operations
Net investment .71C .78C .43 C .23 C .34 C .55 C .61 .09 C
income
Net realized and (1.60) 1.01 1.87 (.40) (.19) .23 1.72 .85
unrealized
gain (loss)
Total from (.89) 1.79 2.30 (.17) .15 .78 2.33 .94
investment
operations
Net asset value, $ 17.23 $ 18.12 $ 16.33 $ 14.03 $ 14.20 $ 14.05 $ 13.27 $ 10.94
end
of period
Total returnA,B (4.91) 10.96% 16.39% (1.20) 1.07% 5.88% 21.30% 9.40%
% %
Net assets, end of $ 6,011 $ 11,53 $ 8,517 $ 5,777 $ 9,007 $ 24,07 $ 12,11 $ 6,230
period (000 1 0 5
omitted)
Ratio of expenses 1.50% D 1.50%D 1.50%D 1.50%D 1.29%D 1.50%D 1.50%D 1.50%D
to average net ,F
assets
Ratio of net 4.04% 4.31% 2.81% 1.62% 2.38% 4.38% 6.62% 8.07%F
investment income
to average net
assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARE OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
E FOR THE PERIOD NOVEMBER 16, 1989 (COMMENCEMENT OF SALE OF SHARES) TO
DECEMBER 31, 1989.
F ANNUALIZED
PERFORMANCE
Each fund's performance can be measured as TOTAL RETURN. The total returns
that follow are based on historical fund results and do not reflect the
effect of taxes.
Each fund's fiscal year runs from January 1 through December 31. The tables
below show each fund's performance over past fiscal years compared to
different measures, including a comparative index. The charts on page
present calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past Past Life
December 31, 1996 1 5 of
year years fundA
Yen Fund (11.70) 2.13 % 5.26 %
%
Yen Fund (12.06) 2.05 % 5.20 %
(load adj.B) %
Yen (10.82) 1.49 % 3.06 %
%
Sterling Fund 15.35 3.44 % 8.36 %
%
Sterling Fund 14.89 3.36 % 8.30 %
(load adj.B) %
Sterling 10.45 (1.71) 1.14 %
% %
Deutsche Mark Fund (4.91) 4.16 % 7.93 %
%
Deutsche Mark (5.29) 4.08 % 7.87 %
(load adj.B) %
Deutsche Mark (6.71) (0.33) 2.50 %
% %
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past Past Life
December 31, 1996 1 5 of
year years fundA
Yen Fund (11.70) 11.10 44.10
% % %
Yen Fund (12.06) 10.66 43.52
(load adj.B) % % %
Yen (10.82) 7.67 24.00
% % %
Sterling Fund 15.35 18.44 77.30
% % %
Sterling Fund 14.89 17.96 76.59
(load adj.B) % % %
Sterling 10.45 (8.27) 8.43 %
% %
Deutsche Mark Fund (4.91) 22.63 72.30
% % %
Deutsche Mark (5.29) 22.14 71.61
(load adj.B) % % %
Deutsche Mark (6.71) (1.62) 19.29
% % %
A FROM November 16, 1989 (COMMENCEMENT OF OPERATIONS)
B LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF a .40% sales charge.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1990 1991 1992 1993 1994 1995 1996
YEN FUND 12.13 % 14.98 % 2.47% 13.09 % 12.64 %
-3.60 %
-11.70 %
Yen 6.28 % 8.46 % -0.01 % 11.64 % 12.11 %
-3.53 % -10
.82 %
Consumer Price Index 6.11 % 3.06 % 2.90% 2.75 %
2.67 % 2.54 % 3.32
%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 12.13
Row: 5, Col: 1, Value: 14.98
Row: 6, Col: 1, Value: 2.47
Row: 7, Col: 1, Value: 13.09
Row: 8, Col: 1, Value: 12.64
Row: 9, Col: 1, Value: -3.6
Row: 10, Col: 1, Value: -11.7
(LARGE SOLID BOX) Yen Fund
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1990 1991 1992 1993 1994 1995 1996
STERLING FUND 36.53 % 6.25 % -12.09 % 2.28 %
9.88 % 3.92 % 15.
35 %
Sterling 19.97 % -3.42 % --19.11 % -2.22 %
6.05 % -0.99
% 10.45 %
Consumer Price Index 6.11 % 3.06 % 2.90 % 2.75 %
2.67 % 2.54 % 3.32
%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 36.53
Row: 5, Col: 1, Value: 6.25
Row: 6, Col: 1, Value: -12.09
Row: 7, Col: 1, Value: 2.28
Row: 8, Col: 1, Value: 9.880000000000001
Row: 9, Col: 1, Value: 3.92
Row: 10, Col: 1, Value: 15.35
(LARGE SOLID BOX) Sterling
Fund
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1990 1991 1992 1993 1994 1995 1996
DEUTSCHE MARK FUND 21.30 % 5.88 % 1.07 % -1.20 %
16.39 % 10.96 %
-4.91 %
Deutsche Mark 13.36 % -1.66 % -6.42 % -6.77 %
12.18 % 7.75
% -6.71 %
Consumer Price Index 6.11 % 3.06 % 2.90 % 2.75 %
2.67 % 2.54 % 3.32
%
Percentage (%)
Row: 1, Col: 1, Value: 0.0
Row: 2, Col: 1, Value: 0.0
Row: 3, Col: 1, Value: 0.0
Row: 4, Col: 1, Value: 21.3
Row: 5, Col: 1, Value: 5.88
Row: 6, Col: 1, Value: 1.07
Row: 7, Col: 1, Value: -1.2
Row: 8, Col: 1, Value: 16.39
Row: 9, Col: 1, Value: 10.96
Row: 10, Col: 1, Value: -4.91
(LARGE SOLID BOX) Deutsche
Mark Fund
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. However,
because of the types of investments each fund makes based on its investment
strategy, the funds do not quote yields.
Unlike each fund's returns, the total returns of each comparative index do
not include the effect of any brokerage commissions, transaction fees, or
other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholder's money
and invests it toward a specific goal. Each fund is a non-diversified fund
organized as a limited partnership in the state of Delaware on April
13, 1987. There is a remote possibility that one fund might become liable
for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY MANAGING GENERAL PARTNERS, who are responsible for
protecting the interests of investors (known as Limited Partners). The
Managing General Partners are experienced executives who meet throughout
the year to oversee the funds' activities, review contractual arrangements
with companies that provide services to the funds, and review the funds'
performance. The majority of Managing General Partners are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove Managing General Partners, change
fundamental policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and handles
their business affairs. FMR also serves as a Non-Managing General Partner.
Jacques Perold is Vice President and manager of Deutsche Mark, Sterling and
Yen portfolios, which he has managed since October 1995. Previously, Mr.
Perold was vice president of structured trading from 1994 to 1995, and
director of equity trading research and development, from 1992 to 1994. Mr.
Perold joined Fidelity in 1986.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Company, Inc. (FSC) performs transfer
agent servicing functions for each fund.
FMR Corp. is the ultimate parent company of FMR. Members of the Edward C.
Johnson 3d family are the predominant owners of a class of shares of common
stock representing approximately 49% of the voting power of FMR Corp. Under
the Investment Company Act of 1940 (the 1940 Act), control of a company is
presumed where one individual or group of individuals owns more than 25% of
the voting stock of that company; therefore, the Johnson family may be
deemed under the 1940 Act to form a controlling group with respect to FMR
Corp.
FMR may use its broker-dealer affiliates and other firms that sell fund
shares to carry out a fund's transactions, provided that the fund receives
brokerage services and commission rates comparable to those other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
Each fund seeks a reasonable level of current income while maintaining
stability of principal in terms of its reference currency. Each fund
invests in high-quality money market securities that are either denominated
in the foreign currency, or denominated in U.S. dollars but coupled with
investment techniques to perform as though they were denominated in the
foreign currency. If successful, the performance of a fund would track the
performance of its foreign currency relative to the U.S. dollar. At the
same time, it would earn current income at the money market rates
prevailing in its currency, minus costs and expenses. However, any income
earned by a fund will be included in the fund's share price, and will not
be distributed to investors as dividends or capital gains.
FMR often uses investment techniques that, together with U.S.
dollar-denominated securities, duplicate the performance of the foreign
currency. These are called "synthetic" positions in the foreign currency.
For example, a forward currency exchange contract is an agreement to
exchange a specified amount of one currency for a specified amount of
another currency at a future date. Futures, options, swap agreements, and
indexed securities can be used for similar purposes. These techniques rely
on the creditworthiness of the counterparty in the transaction, and could
lose their effectiveness at tracking a foreign currency if the counterparty
defaults.
FMR currently expects that most, if not all, of the funds' investments will
be in synthetic positions, because the market for high-quality money market
securities denominated in U.S. dollars is larger and more liquid than the
markets denominated in other currencies. Also, although synthetic positions
involve costs to the funds, these costs are typically lower than direct
investments in securities denominated in foreign currencies.
Each fund's performance depends heavily on its currency exchange rate,
which is generally determined by supply and demand in the foreign exchange
markets. Governments, their central banks, and political and economic
developments can also impact currency exchange rates.
In addition to the factors discussed above, each fund's share price changes
daily and is based on changes in interest rates and on the quality and
maturity of its investments. In general, bond prices rise when interest
rates fall, and vice versa. This effect is usually more pronounced for
longer-term securities. Therefore, each fund maintains a dollar-weighted
average maturity of 120 days or less, and does not invest in instruments
that mature in more than one year. FMR may use various investment
techniques to hedge a portion of the funds' risks, but there is no
guarantee that these strategies will work as intended. When you sell your
shares of the funds, they may be worth more or less than what you paid for
them.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in a fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings and recent investment strategies are detailed in each fund's
financial reports, which are sent to shareholders twice a year. For a free
SAI or financial report, call 1-800-544-8888.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by
the U.S. Government, corporations, financial institutions, and other
entities. These securities may carry fixed, variable, or floating interest
rates.
RESTRICTIONS: Each fund does not currently intend to invest in any security
not rated in the two highest rating categories by any nationally recognized
rating service, or in any unrated security judged by FMR to be of
equivalent quality.
U.S. GOVERNMENT SECURITIES are high-quality debt instruments issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. Government. Not all U.S. Government securities are backed by the full
faith and credit of the United States. For example, U.S. Government
securities such as those issued by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. Other U.S. Government
securities such as those issued by the Federal Farm Credit Banks Funding
Corporation are supported only by the credit of the entity that issued
them.
FOREIGN CURRENCIES may involve additional risks. These include currency
fluctuations, risks relating to political or economic conditions in the
foreign country, and the potentially less stringent investor protection and
disclosure standards of foreign markets. In addition to the political and
economic factors that can affect foreign securities, a governmental issuer
may be unwilling to repay principal and interest when due, and may require
that the conditions for payment be renegotiated. These factors could make
foreign investments more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, or other factors that affect security
values. These techniques may involve derivative transactions such as buying
and selling options and futures contracts, entering into currency exchange
contracts or swap agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with a
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of a fund and may involve a small investment of
cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
RESTRICTIONS: A fund may not use these techniques unless the
creditworthiness of the counterparty meets the fund's requirements.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S.
repurchase agreements, and may be denominated in foreign currencies. They
also may involve greater risk of loss if the counterparty defaults. Some
counterparties in these transactions may be less creditworthy than those in
U.S. markets.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Managing General Partners, to be
illiquid, which means that they may be difficult to sell promptly at an
acceptable price. The sale of some illiquid securities and some other
securities may be subject to legal restrictions. Difficulty in selling
securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income while maintaining a stable $1.00 share price. A
major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTIONS: Each fund does not currently intend to invest in a money
market fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. A fund that
is not diversified may be more sensitive to changes in the market value of
a single issuer or industry.
RESTRICTIONS: Each fund is considered non-diversified. A fund may not
invest more than 25% of its total assets in any issuer. This limitation
does not apply to U.S. or foreign government securities or to
securities of other investment companies. A fund also may not invest more
than 25% of its total assets in any one industry. These limitations do not
apply to U.S. Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If a fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities. A fund may also lend money to other funds advised by
FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Each fund seeks stability of principal in terms of its reference currency
and, consistent with that objective, seeks to earn a reasonable level of
current income.
Each fund may not invest more than 25% of its total assets in any one
industry.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. Each fund also pays OTHER EXPENSES, which are explained
on page .
FMR may, from time to time, agree to reimburse the funds for management
fees and other expenses above a specified limit. FMR retains the ability to
be repaid by a fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a management fee at the annual rate of .50% of the fund's average net
assets.
After reimbursement, the Yen, Sterling and Deutsche Mark Funds paid no
management fees for the fiscal year ended December 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of the funds' annual
operating costs, the funds have other expenses as well.
The funds contract with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing each fund's investments, and handling securities loans. In the
fiscal year ended December 1996, the Yen, Sterling, and Deutsche Mark Funds
paid FSC fees equal to 2.64% , 5.70%, and 1.16% respectively, of average
net assets.
The funds also pay other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of Managing General
Partners who are not affiliated with Fidelity.
FMR has voluntarily agreed to limit each fund's total operating expenses to
an annual rate of 1.50% of average net assets.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, FBSI. Fidelity is also a leader
in providing tax-sheltered retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee for
this service. If you invest through FBSI, another financial institution, or
an investment professional, read their program materials for any special
provisions, additional service features or fees that may apply to your
investment in the fund. Certain features of the fund, such as the minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR EACH FUND: the
offering price and the net asset value (NAV). If you qualify for a sales
charge waiver as described on page , your share price will be the NAV. If
you pay a sales charge as described below, your share price will be the
offering price. When you buy shares at the offering price, Fidelity deducts
the appropriate sales charge and invests the rest at the NAV. The sales
charge you pay depends upon the amount you invest
Sales charge (as a
Amount % of offering price)
Less than $25,000 0.40%
$25,000 to $100,000 0.30%
More than $100,000 0.20%
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Mail in an application to establish the account, along
with instructions to use the proceeds from a redemption from your existing
account to purchase shares in the Foreign Currency fund of your choice.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $5,000
TO ADD TO AN ACCOUNT $1,000
MINIMUM BALANCE $ 2,000
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
UNDERSTANDING
SHARE PRICE
Let's say you invest $5,000 at
an offering price of $10. Of
the $10 offering price, .40%
($.04) is the sales charge,
and 99.60% ($9.96)
represents the NAV. The
value of your initial
investment will be $4,980
(500 shares worth $9.96
each), and you will have paid
a sales charge of $20.
(checkmark)
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
$5,000 Investment
.40% sales charge = $20
Value of Investment = $4,980
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Wire to:
set up your account Bankers Trust
and to arrange a wire Company,
transaction.A Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
A FOR MORE INFORMATION ON PURCHASING SHARES, PLEASE REFER TO "TRANSACTION
DETAILS" BEGINNING ON PAGE .
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the table
that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check request:
$100,000.
(small solid bullet) For Money Line transfers to
your bank account; minimum:
$10; maximum: $100,000.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Trust names appear on the
account.
(small solid bullet) The trustee must sign the
letter indicating capacity as
Business or trustee. If the trustee's name
Organization is not in the account
registration, provide a copy of
the trust document certified
within the last 60 days.
(small solid bullet) At least one person
Executor, authorized by corporate
Administrator, resolution to act on the
Conservator, account must sign the letter.
Guardian (small solid bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more than
one account in the fund. Call 1-800-544-6666 if you need copies of
financial reports, prospectuses, or historical account information.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
AUTOMATED SERVICE
(checkmark)
TRANSACTION SERVICES
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The funds do not intend to distribute their income. Instead, each fund's
income will be reflected in its share price.
As with any investment, you should consider how your investment will be
taxed. Below are some of the funds' tax implications. Consult your tax
adviser for more information.
FEDERAL INCOME TAX. Each fund is organized for federal income tax purposes
as a partnership. Under current law, partnerships are not subject to
federal income tax.
As a Limited Partner of a fund, you are required to report your
proportionate share of the fund's income, gains, losses, deductions, and
credits when you file your federal tax return. You will be subject to tax
on your share of the fund's taxable income even though the funds do not
distribute their income. Your share of these items will be reported on your
Schedule K-1 federal tax form, which the funds will send you after the
close of the calendar year. Certain expenses associated with your
investment in the partnership, such as advisory fees, stock transfer fees,
and investment expenses may not be deductible by an individual, except to
the extent that miscellaneous itemized deductions (including such fees and
expenses) exceed 2% of your adjusted gross income.
You may realize a capital gain or loss when you redeem your partnership
shares, depending on your capital account in the partnership for tax
purposes and depending on whether you sell all or a part of your
partnership shares. The federal tax treatment will also depend on your
individual tax position. You may also be subject to state and local taxes,
depending on your particular circumstances and the laws of your home state
and locality. It is to your advantage to keep all statements you receive to
assist you in your personal recordkeeping.
The funds will continue to be treated as partnerships for tax purposes
through 1997, but may be taxed as corporations beginning in 1998. If the
funds are taxed as corporations, they may be able to qualify as "regulated
investment companies" like most other mutual funds. If they do not qualify,
however, the funds may be required to pay taxes on their income at
corporate rates, in addition to taxes that investors in the fund would pay
on income distributed to them as dividends. To avoid this, the funds may
significantly modify their investment policies or liquidate prior to
1998.
OTHER TAX INFORMATION. FMR currently expects that the funds will limit
their investments to securities that are not subject to foreign withholding
taxes. However, the funds may purchase securities that are subject to
foreign tax withholding if FMR believes that other investment
considerations outweigh the effects of withholding taxes. If so, your
proportionate share of any foreign taxes withheld would be allocated to you
by your fund, and generally should be allowed as a credit or deduction on
your individual income tax return. A portion of a fund's gross income may
be treated as unrelated business taxable income
for qualified pension plans, individual retirement accounts, charitable
organizations, or other tax-exempt investors, therefore the funds may not
be suitable for individual retirement accounts, qualified pension plans,
charitable organizations, or other tax-exempt investors.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV and offering price as
of the close of business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded, and are translated from the local currency
into U.S. dollars using current exchange rates. Short-term securities
with remaining maturities of sixty days or less for which quotations are
not readily available are valued on the basis of amortized cost. This
method minimizes the effect of changes in a security's market value. In
addition, if quotations are not readily available, or if the values
have been materially affected by events occurring after the closing of a
foreign market, assets may be valued by a method that the Managing General
Partners believes accurately reflects fair value.
THE OFFERING PRICE (price to buy one share) is the fund's NAV divided by
the sum of one minus the applicable sales charge percentage. The maximum
sales charge is .40% of the offering price, and it drops to as low as .20%
as investment size increases. The REDEMPTION PRICE (price to sell one
share) is the fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of your confirmation
statements immediately after you receive them. If you do not want the
ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on
page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
cancelled and you could be liable for any losses or fees a fund or its
transfer agent has incurred.
(small solid bullet) Your account will not be opened until your completed
application is on file, because your signature on the application is
required to establish your status as a Limited Partner.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day after
your phone call.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money Line
have been collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500 (including any amount paid
as a sales charge), subject to an annual maximum charge of $24.0 0
per shareholder. It is expected that accounts will be valued on the second
Friday in November of each year. Accounts opened after September 30 will
not be subject to the fee for that year. The fee, which is payable to the
transfer agent, is designed to offset in part the relatively higher costs
of servicing smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating Fidelity
accounts maintained by FSC or FBSI which are registered under the same
social security number or which list the same social security number for
the custodian of a Uniform Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30
days' notice to reestablish the minimum balance. If you do not increase
your balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV on the day
your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
Most Fidelity funds offer investors the privilege of exchanging shares of a
fund for shares of other Fidelity funds without losing credits for sales
charges previously paid. However, the Foreign Currency funds do not offer
an exchange privilege.
If you use money that came from selling shares of other Fidelity funds to
invest directly in the Foreign Currency funds, the sales charge still
applies. However, if your original shares of the other Fidelity funds
carried sales charge credits, you will retain the credits when you sell
those shares of the Foreign Currency funds and use the proceeds to invest
directly in other Fidelity funds. Call Fidelity for more information and a
prospectus for any Fidelity fund registered in your state.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE WAIVERS
A fund's sales charge will not apply:
1. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or full-time employee of FMR Corp.
or Fidelity International Limited or their direct or indirect
subsidiaries (a Fidelity Managing General Partner, Trustee, or employee).
2. If you are the spouse of a Fidelity Managing General Partner, Trustee or
employee.
3. If you are a Fidelity Managing General Partner, Trustee, or employee
acting as custodian for a minor child.
4. If you are a person acting as trustee of a trust for the sole benefit of
the minor child of a Fidelity Managing General Partner, Trustee, or
employee.
These waivers must be qualified through FDC in advance.
APPENDIX
SUMMARY OF PARTNERSHIP AGREEMENTS
The full text of the Partnership Agreement is set forth in the Statement of
Additional Information (each fund's Partnership Agreement is identical).
The following statements summarize and explain certain provisions of the
Partnership Agreements and are qualified in their entirety by the terms of
the Partnership Agreements. Each Partnership is organized under the
Delaware Revised Uniform Limited Partnership Act (the Delaware Act). Each
investor who becomes a Limited Partner of a fund will be deemed to have
agreed to all of the terms of the applicable Partnership Agreement.
VOTING RIGHTS OF PARTNERS. The Partners have rights required under the
Investment Company Act of 1940 (the 1940 Act), as amended, for voting
security holders. General Partners and Limited Partners have one vote for
each share held. Partners may vote in person or by proxy. Limited Partners
holding more than 10% of a fund's outstanding shares may require the
calling of a special meeting of the Partners. Only holders of shares who
have become Limited Partners by the record date for a meeting of Partners
will be entitled to vote at the meeting.
GENERAL PARTNERS. Each fund has two classes of Partners, General Partners
and Limited Partners. The General Partners consist of a number of
individual Managing General Partners, and one corporate Non-Managing
General Partner. Each fund's Managing General Partners has complete and
exclusive control over the management, conduct, and operation of the fund's
business. The Managing General Partners may amend the Partnership Agreement
at any time and may establish separate series of each fund's assets with
distinct investment policies and separate identification, partnership
shares, voting rights, and liabilities.
The General Partners have general liability to creditors for each fund's
obligations. However, the General Partners are not personally liable to any
Limited Partner, except by reason of their willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the
conduct of their office. Returns of Limited Partners' investments will be
made only for the assets of the applicable fund, and the General Partners
have no general liability for such returns. A General Partner is entitled
to indemnification from the fund against liabilities and expenses to which
he may be subject in their capacity as a General Partner provided that
their actions do not constitute willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of
their office. Indemnification is limited to the assets of the fund.
LIABILITY OF LIMITED PARTNERS. Generally, Limited Partners are not
personally liable for obligations of the funds unless they take part in the
control of the activities of the funds. Under the terms of the Partnership
Agreements, the Limited Partners as such do not have the right to take part
in the control of the funds' activities, but they may exercise the right to
vote on matters requiring approval under the 1940 Act and on certain other
matters.
The contribution of a Limited Partner (being the original purchase price
paid for shares and the purchase price of any shares subsequently purchased
due to reinvestment of distributions or otherwise) is subject to the risks
of the business of the fund and the claims of the fund's creditors.
ADMISSION OF LIMITED PARTNERS. A purchaser of shares is required to execute
an application agreeing to be bound by the Partnership Agreement and
granting Power of Attorney. Admission of a purchaser as a Limited Partner
requires the consent of the Managing General Partners and the addition of
the Limited Partner to the books and records of the fund. The Power Of
Attorney referred to above will be used to add the purchaser as a Limited
Partner and for certain other purposes, as set forth therein. The addition
of the Limited Partner to the books and records of a fund shall evidence
the consent of the Managing General Partners to the admission of such
purchaser. The Managing General Partners, while recognizing that they have
the right to withhold their consent, have stated that they intend to give
such consent as a matter of course. Whether or not an investor executes an
application, any person acquiring shares shall be deemed to have agreed to
the Partnership Agreement, and the further powers of attorney as set forth
in each Partnership Agreement.
PROHIBITION OF ASSIGNMENT OF SHARES. A Limited Partner does not have the
right, except with the prior consent of the Managing General Partners, to
voluntarily transfer or assign his shares to any other person other than to
secure a loan. However, an investor is entitled to redeem shares as
described in the section entitled "How to Sell Shares."
TERM OF EXISTENCE - DISSOLUTION. Each fund will continue until December 31,
2051, but a fund shall be dissolved before that date if and when: (1) the
fund disposes of all or substantially all of its assets; (2) Limited
Partners who are holders of a majority of the fund's outstanding voting
shares (of all series) vote to dissolve the fund; (3) the Managing General
Partners determine by majority vote to dissolve the fund; (4) a Managing
General Partner retires, dies, becomes bankrupt, becomes incapacitated,
resigns, or is removed, unless the remaining Managing General Partners
elect to continue the operations of the fund at a meeting within 90 days
of such event; or (5) the Non-Managing General Partner withdraws and no
successor Non-Managing General Partner is admitted by the Managing General
Partners unless the Managing General Partners elect to continue the
operations of the fund and at least one Managing General Partner assumes
the obligation (if applicable) of the Non-Managing General Partner to
maintain the share interest in the fund (not less than 0.2%) required by
the Agreement. Notwithstanding the foregoing, if a fund were to dissolve
because of the retirement, death, dissolution, bankruptcy, removal, or
other withdrawal of all General Partners, the fund will not be terminated
if, within 90 days following the date of withdrawal of the last remaining
General Partner, all Partners agree in writing to continue the operations
of the fund and to the appointment of one or more successor Managing
General Partners and a successor Non-Managing General Partner.
Distributions by the funds, whether upon redemption, dissolution, or
otherwise, will be in proportion to the numbers of shares held without
regard to the dollar amount contributed to the fund or the amount of any
profits of the fund received.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY FOREIGN CURRENCY FUNDS
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 28, 1997
This Statement of Additional Information (SAI) is not a prospectus
but should be read in conjunction with the funds' current Prospectus
(dated February 28, 1997). Please retain this document for future
reference s . The funds' Annual Report is a separate document
supplied with this SAI . To obtain a free additional copy of the
Prospectus or the Annual Report, please call Fidelity at
1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Affecting the Funds
Portfolio Transactions
Valuation
Performance
Additional Purchase and Redemption Information
Taxes
FMR
Managing General Partners and Officers
Management Contracts
Contracts with FMR Affiliates
Description of the Funds
Financial Statements
Appendix
Partnership Agreement
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
CUR-ptb-0297
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS FOR FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
(YEN FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute short sales;
(3) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that the fund may make initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets. Borrowings that exceed
33 1/3% of the fund's total assets by reason of a decline in net assets
will be reduced within three days to the extent necessary to comply with
the 33 1/3% limitation, and reverse repurchase agreements are considered
borrowings for the purposes of this limitation;
(5) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(6) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(7) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts or forward contracts); or
(9) make loans if, as a result, more than 33 1/3% of its total assets would
be lent to another party, except (a) by engaging in repurchase agreements
with respect to portfolio securities; or (b) through the purchase of a
portion of an issue of debt securities in accordance with its investment
objective, policies, and limitations.
Investment limitation (4) is construed in conformity with the 1940 Act,
and, accordingly, "three days" means three days exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT INVESTOR APPROVAL.
(i) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or by a foreign government that issues its reference currency, or any
agency, instrumentality, territory, possession or political subdivision of
any of the foregoing) if, as a result thereof, more than 25% of the fund's
total assets would be invested in the securities of that issuer.
(ii) The fund does not currently intend to sell securities short.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
( v ) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
( vi ) The fund does not currently intend to (a) write or purchase any
put or call option, including options on futures contracts, or (b) purchase
or sell futures contracts other than futures contracts relating to foreign
currencies.
INVESTMENT LIMITATIONS FOR FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
(STERLING FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute short sales;
(3) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that the fund may make initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets. Borrowings that exceed
33 1/3% of the fund's total assets by reason of a decline in net assets
will be reduced within three days to the extent necessary to comply with
the 33 1/3% limitation, and reverse repurchase agreements are considered
borrowings for the purposes of this limitation;
(5) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(6) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(7) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts or forward contracts); or
(9) make loans if, as a result, more than 33 1/3% of its total assets would
be lent to another party, except (a) by engaging in repurchase agreements
with respect to portfolio securities; or (b) through the purchase of a
portion of an issue of debt securities in accordance with its investment
objective, policies, and limitations.
Investment limitation (4) is construed in conformity with the 1940 Act,
and, accordingly, "three days" means three days exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT INVESTOR APPROVAL.
(i) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or by a foreign government that issues its reference currency, or any
agency, instrumentality, territory, possession or political subdivision of
any of the foregoing) if, as a result thereof, more than 25% of the fund's
total assets would be invested in the securities of that issuer.
(ii) The fund does not currently intend to sell securities short.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
( v ) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
( v i) The fund does not currently intend to (a) write or purchase any
put or call option, including options on futures contracts, or (b) purchase
or sell futures contracts other than futures contracts relating to foreign
currencies.
INVESTMENT LIMITATIONS FOR FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO,
L.P.
(DEUTSCHE MARK FUND)
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute short sales;
(3) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that the fund may make initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts;
(4) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets. Borrowings that exceed
33 1/3% of the fund's total assets by reason of a decline in net assets
will be reduced within three days to the extent necessary to comply with
the 33 1/3% limitation, and reverse repurchase agreements are considered
borrowings for the purposes of this limitation;
(5) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(6) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(7) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling marketable securities issued by companies or other entities or
investment vehicles that deal in real estate or interests therein, nor
shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(8) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts or forward contracts); or
(9) make loans if, as a result, more than 33 1/3% of its total assets would
be lent to another party, except (a) by engaging in repurchase agreements
with respect to portfolio securities; or (b) through the purchase of a
portion of an issue of debt securities in accordance with its investment
objective, policies, and limitations.
Investment limitation (4) is construed in conformity with the 1940 Act,
and, accordingly, "three days" means three days exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT INVESTOR APPROVAL.
(i) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government
or by a foreign government that issues its reference currency, or any
agency, instrumentality, territory, possession or political subdivision of
any of the foregoing) if, as a result thereof, more than 25% of the fund's
total assets would be invested in the securities of that issuer.
(ii) The fund does not currently intend to sell securities short.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (4)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
( v ) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
( vi ) The fund does not currently intend to (a) write or purchase any
put or call option, including options on futures contracts, or (b) purchase
or sell futures contracts other than futures contracts relating to foreign
currencies.
For the funds' limitations on futures and options transactions, see the
section entitled "Futures Contracts" on page .
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission (SEC), the Managing General Partners have
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
CLOSED-END INVESTMENT COMPANIES. Each fund may purchase the
shares of closed-end investment companies to facilitate investment in
certain countries. Shares of closed-end investment companies may trade at a
premium or a discount to their net asset value.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar.
Foreign investments involve a risk of local political, economic, or social
instability, military action or unrest, or adverse diplomatic developments,
and may be affected by actions of foreign governments adverse to the
interests of U.S. investors. Such actions may include the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
is no assurance that FMR will be able to anticipate these potential events
or counter their effects. These risks are magnified for investments in
developing countries, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that trade
a small number of securities.
Economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States. Foreign
markets may offer less protection to investors than U.S. markets. It is
anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may result in increased risk in the
event of a failed trade or the insolvency of a foreign broker-dealer, and
may involve substantial delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions and custodial
costs, are generally higher than for U.S. investors. In general, there is
less overall governmental supervision and regulation of securities
exchanges, brokers, and listed companies than in the United States. It may
also be difficult to enforce legal rights in foreign countries. Foreign
issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to
those applicable to U.S. issuers.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
American Depositary Receipts (ADR's) as well as other "hybrid" forms of
ADRs including European Depositary Receipts (EDRs) and Global Depositary
Receipts (GDRs), are certificates evidencing ownership of shares of a
foreign issuer. These certificates are issued by depository banks and
generally trade on an established market in the United States or elsewhere.
The underlying shares are held in trust by a custodian bank or similar
financial institution in the issuer's home country. The depository bank may
not have physical custody of the underlying securities at all times and may
charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are an alternative to directly
purchasing the underlying foreign securities in their national markets and
currencies. However, ADRs continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks
of the underlying issuer's country.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by entering
into forward contracts to purchase or sell foreign currencies). Although
foreign exchange dealers generally do not charge a fee for such
conversions, they do realize a profit based on the difference between the
prices at which they are buying and selling various currencies. Thus, a
dealer may offer to sell a foreign currency at one rate, while offering a
lesser rate of exchange should the counterparty desire to resell that
currency to the dealer. Forward contracts are customized transactions that
require a specific amount of a currency to be delivered at a specific
exchange rate on a specific date or range of dates in the future. Forward
contracts are generally traded in an interbank market directly between
currency traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the contract
before its maturity, or may hold the contract to maturity and complete the
contemplated currency exchange. A fund may use currency forward contracts
for any purpose consistent with its investment objective.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A fund
may also use swap agreements, indexed securities, and options and futures
contracts relating to foreign currencies for the same purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a fund
against an adverse change in foreign currency values between the date a
security is purchased or sold and the date on which payment is made or
received. Entering into a forward contract for the purchase or sale of the
amount of foreign currency involved in an underlying security transaction
for a fixed amount of U.S. dollars "locks in" the U.S. dollar price of the
security. Forward contracts to purchase or sell a foreign currency may also
be used by a fund in anticipation of future purchases or sales of
securities denominated in foreign currency, even if the specific
investments have not yet been selected by FMR.
A fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For example,
if a fund owned securities denominated in pounds sterling, it could enter
into a forward contract to sell pounds sterling in return for U.S. dollars
to hedge against possible declines in the pound's value. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes
in security values caused by other factors. A fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling. This type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a direct
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
A fund may enter into forward contracts to shift its investment exposure
from one currency into another. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another
foreign currency. This type of strategy, sometimes known as a
"cross-hedge," will tend to reduce or eliminate exposure to the currency
that is sold, and increase exposure to the currency that is purchased, much
as if a fund had sold a security denominated in one currency and purchased
an equivalent security denominated in another. Cross-hedges protect against
losses resulting from a decline in the hedged currency, but will cause a
fund to assume the risk of fluctuations in the value of the currency it
purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, a fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. A fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of currency management strategies will depend on FMR's skill
in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in currency
exchange rates and could result in losses to a fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged a fund by selling that currency in exchange for
dollars, a fund would not participate in the currency's appreciation. If
FMR hedges currency exposure through proxy hedges, a fund could realize
currency losses from both the hedge and the security position if the two
currencies do not move in tandem. Similarly, if FMR increases a fund's
exposure to a foreign currency and that currency's value declines, a fund
will realize a loss. There is no assurance that FMR's use of currency
management strategies will be advantageous to a fund or that it will hedge
at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed
U.S. dollar amounts, or in exchange for specified amounts of foreign
currency. Unlike typical U.S. repurchase agreements, foreign repurchase
agreements may not be fully collateralized at all times. The value of a
security purchased by a fund may be more or less than the price at which
the counterparty has agreed to repurchase the security. In the event of
default by the counterparty, the fund may suffer a loss if the value of the
security purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve higher
credit risks than repurchase agreements in U.S. markets, as well as risks
associated with currency fluctuations. In addition, as with other emerging
market investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers or
counterparties with lower credit ratings than typical U.S. repurchase
agreements.
FUTURES CONTRACTS. The funds may also execute transactions in foreign
currency by purchasing and selling futures contracts relating to foreign
currencies. Such currency futures contracts may be traded on U.S. and
foreign futures exchanges. Each fund has filed a notice of eligibility for
exclusion from the definition of the term "commodity pool operator" with
the Commodity Futures Trading Commission (CFTC) and the National Futures
Association, which regulate trading in the futures markets. The funds
intend to comply with Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the funds can commit assets to initial margin
deposits and option premiums.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Managing General Partners, FMR
determines the liquidity of a fund's investments and, through reports from
FMR, the Board monitors investments in illiquid instruments. In determining
the liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by a fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities, and over-the-counter options. Also, FMR may
determine some restricted securities, government-stripped fixed-rate
mortgage-backed securities, loans and other direct debt instruments,
emerging market securities, and swap agreements to be illiquid. However,
with respect to over-the-counter options a fund writes, all or a portion of
the value of the underlying instrument may be illiquid depending on the
assets held to cover the option and the nature and terms of any agreement
the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Managing General Partners. If through a change in values, net assets, or
other circumstances, a fund were in a position where more than 10% of its
net assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. Each fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
United States and abroad. At the same time, indexed securities are subject
to the credit risks associated with the issuer of the security, and their
values may decline substantially if the issuer's creditworthiness
deteriorates. Recent issuers of indexed securities have included banks,
corporations, and certain U.S. government agencies. Indexed securities may
be more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Interfund
loans and borrowings normally extend overnight, but can have a maximum
duration of seven days. Loans may be called on one day's notice. A fund
will lend through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the cost
of bank loans. A fund may have to borrow from a bank at a higher interest
rate if an interfund loan is called or not renewed. Any delay in repayment
to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Managing General
Partners must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which a fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease a fund's exposure to long- or
short-term interest rates (in the United States or abroad), foreign
currency values, mortgage securities, corporate borrowing rates, or other
factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names. A fund is
not limited to any particular form of swap agreement if FMR determines it
is consistent with the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a fund's investments and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from a fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. Each fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
SPECIAL CONSIDERATIONS AFFECTING THE FUNDS
The funds' net asset values will depend in part on the credit quality of
their investments. The funds try to minimize credit risk by relying on
FMR's credit analysis and limiting their investments to those that FMR
judges to be of high quality. The foreign currency market, however, offers
less protection against defaults in the forward trading of currencies than
is available when trading in currencies on an exchange. Because a forward
contract is not guaranteed by an exchange or clearinghouse, a default on
the contract would deprive a fund of unrealized profits or force it to
cover its commitments for purchase or resale, if any, at the current market
price.
FMR will keep abreast of the likelihood of the imposition by any foreign
government of exchange control restrictions that would affect the liquidity
of a fund's assets maintained with custodians in such countries, as well as
the degree of risk from political, social, and economic events and
developments to which such assets may be exposed. Even such close review
however, may not suffice to detect an unexpected event leading to the
imposition of exchange control restrictions and subsequent loss to
investors. No assurance can be given that FMR's appraisal of perceived
risks will always be correct or that exchange control restrictions or
activities of foreign governments or depositories that might materially
adversely affect the value of the funds' investments might not occur.
An increase in a country's inflation rate relative to other countries, or a
relative decrease in its short-term interest rates, will tend to cause its
currency to decline in value relative to other currencies. Rate of Gross
National Product (GNP) growth is broadly recognized as a barometer of
economic health; consequently, increases in the rate of GNP growth
generally suggest strength in the country's currency. Similarly, an
improving current account indicates positive trade conditions, which
generally accompany strengthening currency values. The above factors rarely
work in isolation from each other, however, and the future direction of
currency fluctuations cannot be predicted with certainty.
The U.S. government has from time to time in the past imposed restrictions,
through taxation and otherwise, on foreign investments by U.S. investors
such as the funds. If such restrictions should be reinstituted, it might
become necessary for one or more funds to invest all or substantially all
of their assets in U.S. securities. In such event, the Managing General
Partners would reevaluate the funds' investment objectives and policies.
JAPANESE MONEY MARKETS. The Bank of Japan is the central bank for Japan,
and is assisted in implementing monetary policy by the Ministry of Finance.
The Ministry of Finance controls the national budget, licenses all
financial institutions operating in the country, and acts as general
protector of the Japanese economy. The Bank of Japan controls monetary
policy under guidance of the Ministry of Finance to change reserve deposit
requirements and other monetary targets which relate to the public and
private sectors.
Financial institutions, domestic and foreign, which operate in Japan are
subject to licensing or approval by the Ministry of Finance, which has
detailed authority over the individual operations of each licensee.
Yen-denominated money market instruments include certificates of deposit
issued by Japanese banks or foreign banks' branches in Japan, Japanese
treasury bills, gensaki (repurchase agreements), and bankers' acceptances.
UNITED KINGDOM MONEY MARKETS. Overall supervision of the financial market
in London is exercised by Her Majesty's Treasury and the Bank of England,
which is the central bank for the United Kingdom. The Bank of England
supervises the market by establishing and structuring associations to
monitor market activities.
The Bank of England supervises credit standards in the money markets of the
United Kingdom by determining which obligations it will purchase and the
applicable discount rate. Paper and money market instruments of the highest
quality will be purchased by the Bank of England and discounted at its
prime rate. Paper or money market instruments of a lesser quality will be
purchased and discounted by the Bank at a higher rate. Paper or instruments
of inferior quality will not be purchased. In this manner, the Bank of
England monitors and supervises the creditworthiness of instruments traded
in the United Kingdom money market. The Sterling Fund may purchase money
market instruments which have been refused for discount by the Bank of
England if they are of high quality in FMR's judgment.
Sterling-denominated money market instruments include Sterling time
deposits and certificates of deposit, commercial paper, treasury bills or
other securities issued or guaranteed as to payments of principal and
interest by the government of the United Kingdom, negotiable bonds issued
by local authorities in the United Kingdom, and corporate debt obligations.
GERMAN MONEY MARKETS. Deutsche Mark-denominated investments are widely used
in international markets as a vehicle for foreign exchange trading. The
money market in Germany is highly regulated by the German central bank, the
Bundesbank. Because securities markets are less prominent in Germany than
in other countries, the Bundesbank and the Federal Supervisory Authority
(which licenses, supervises, and inspects all depository institutions in
Germany) have greater control over monetary policy than their counterparts
in other countries, such as the Federal Reserve System in the United
States. This may have a significant impact on the rate of interest earned
on Deutsche Mark-denominated securities.
Banks in Germany have an additional source of credit, known as the "Lombard
Credit Line," a 90-day short-term borrowing based on a percentage of
eligible collateral, which affects interest rates for money market
instruments in Germany. The availability of the Lombard Credit Line, in
addition to rediscount privileges at the Bundesbank, is a factor affecting
the cost of funds in the money market in Germany and the rate of return to
be received for the purchaser of money market instruments.
Available Deutsche Mark-denominated investments include time deposits,
certificates of deposit, trade acceptances, bankers' acceptances, German
treasury bills and acceptances, corporate debt securities, and repurchase
agreements.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to: the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). The
selection of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) based upon the quality
of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Managing General Partners
have authorized FBSI to execute portfolio transactions on national
securities exchanges in accordance with approved procedures and applicable
SEC rules.
Each fund's Managing General Partners periodically review FMR's performance
of its responsibilities in connection with the placement of portfolio
transactions on behalf of the funds and review the commissions paid by each
fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.
For the fiscal years ended December 31, 1996, 1995, 1994 the funds
paid no brokerage commissions.
During the fiscal year ended December 31, 1996, the funds paid no fees
to brokerage firms that provided research services.
From time to time the Managing General Partners will review whether the
recapture for the benefit of the funds of some portion of the brokerage
commissions or similar fees paid by the funds on portfolio transactions is
legally permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Managing General Partners
intend to continue to review whether recapture opportunities are available
and are legally permissible and, if so, to determine in the exercise of
their business judgment whether it would be advisable for each fund to seek
such recapture.
Although the Managing General Partners and officers of each fund are
substantially the same as those of other funds managed by FMR, investment
decisions for each fund are made independently from those of other funds
managed by FMR or accounts managed by FMR affiliates. It sometimes happens
that the same security is held in the portfolio of more than one of these
funds or accounts. Simultaneous transactions are inevitable when several
funds and accounts are managed by the same investment adviser, particularly
when the same security is suitable for the investment objective of more
than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Managing General Partners that the desirability of retaining
FMR as investment adviser to each fund outweighs any disadvantages that may
be said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Co. (FSC) normally determines each fund's NAV as of the
close of the NYSE (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of this time for the purpose of
computing each fund's NAV.
Fixed-income securities and convertible securities may also be valued on
the basis of information furnished by a pricing service that uses a
valuation matrix which incorporates both dealer-supplied valuations and
electronic data processing techniques. Use of pricing services has been
approved by the Board of Trustees. A number of pricing services are
available, and the fund may use various pricing services or discontinue the
use of any pricing service.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Fixed-income securities and other
assets for which market quotations are readily available may be valued at
market values determined by such securities' most recent bid prices (sales
prices if the principal market is an exchange) in the principal market in
which they normally are traded, as furnished by recognized dealers in such
securities or assets.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in
their local currency. FSC gathers all exchange rates daily at the close of
the NYSE using the last quoted price on the local currency and then
translates the value of foreign securities from their local currencies into
U.S. dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation of
NAV. If an extraordinary event that is expected to materially affect the
value of a portfolio security occurs after the close of an exchange on
which that security is traded, then that security will be valued as
determined in good faith by a committee appointed by the Managing General
Partners.
Short-term securities with remaining maturities of sixty days or less for
which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be valued in good
faith by a committee appointed by the Managing General Partners . The
procedures set forth above need not be used to determine the value of the
securities owned by a fund if, in the opinion of a committee appointed by
the Managing General Partners , some other method would more
accurately reflect the fair market value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's share price, yield, and
total return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than their
original cost.
YIELD. refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. However, the
rates on forward foreign currency contracts purchased by each fund include
an adjustment factor to reflect the differential between prevailing money
market rates of interest in the two currencies. When the funds establish
these synthetic positions, the effective economic rate of interest earned
will not be the same as the nominal rates earned on the dollar-denominated
instruments. As a result, the funds do not quote yields.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis and may be quoted with or without taking each
fund's .40% maximum sales charge into account. Excluding a fund's sales
charge from a total return calculation produces a higher total return
figure. Total returns and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified period. Moving Average Activity
Indicators combine adjusted closing NAVs from the last business day of each
week with moving averages for a specified period to produce indicators
showing when an NAV has crossed, stayed above, or stayed below its moving
average. On December 27, 1996, the 13-week and 39-week long-term moving
averages were $14.83 and $15.29, respectively, for the Yen Fund ,
16.87% and 16.04%, respectively, for the the Sterling Fund, and 17.30% and
17.39%, respectively for the Deutsche Mark Fund.
NET ASSET VALUE. Charts and graphs using a fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by a fund and
reflects all elements of its return. Unless otherwise indicated, a fund's
adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following tables show each fund's and total
returns for periods ended December 31, 1996. Total return figures
include the effect of a fund's maximum .40% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
One Five One Five
Year Years Life of Year Years Life of
Fund* Fund*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yen -12.06% 2.05% 5.20% -12.06% 10.66% 43.52%
Sterling 14.89% 3.36% 8.30% 14.89% 17.96% 76.59%
Deutsche
Mark -5.29% 4.08% 7.87% -5.29% 22.14% 71.61%
</TABLE>
* From November 16, 1989 (commencement of operations).
If FMR had not reimbursed certain fund expenses during these periods, each
fund's total return would have been lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The tables compare each fund's return to the
record of the Standard & Poor's 500 Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The CPI information is as
of the month end closest to the initial investment date for each fund. The
S&P 500 and DJIA comparisons are provided to show how each fund's total
return compared to the record of a broad unmanaged index of common stocks
and a narrower set of stocks of major industrial companies, respectively,
over the same period. Because each fund is designed to duplicate the
performance of foreign currencies against the U.S. dollar, common stocks
represent a different type of investment from the funds. Common stocks
generally offer greater growth potential than the funds, but generally
experience greater price volatility, which means greater potential for
loss. In addition, common stocks generally provide lower income than a
fixed-income investment such as the funds. The S&P 500 and DJIA returns are
based on the prices of unmanaged groups of stocks and, unlike each fund's
returns, do not include the effect of brokerage commissions or other costs
of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in each fund during the life of each fund, as applicable. The
fund made no dividend or capital gain distributions during the period. The
figures below reflect the fluctuating currency exchange rates and bond
prices of the specified periods of the specified periods and should not be
considered representative of the capital gain or loss that could be
realized from an investment in a fund today. Tax consequences of different
investments have not been factored into the figures on the following page.
During the period from November 16, 1989 (commencement of operations) to
December 31, 1996, a hypothetical investment in Yen fund would have grown
to $ 14,352 , including the effect of the fund's .40% sales charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P. INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1996 $ 14,352 $ 0 $ 0 $ 14,352 $ 26,762 $ 30,131 $ 12,597
1995 $ 16,255 $ 0 $ 0 $ 16,255 $ 21,764 $ 23,411 $ 12,192
1994 $ 16,862 $ 0 $ 0 $ 16,862 $ 15,820 $ 17,123 $ 11,890
1993 $ 14,970 $ 0 $ 0 $ 14,970 $ 15,614 $ 16,312 $ 11,581
1992 $ 13,237 $ 0 $ 0 $ 13,237 $ 14,184 $ 13,943 $ 11,271
1991 $ 12,918 $ 0 $ 0 $ 12,918 $ 13,177 $ 12,994 $ 10,953
1990 $ 11,235 $ 0 $ 0 $ 11,235 $ 10,099 $ 10,451 $ 10,627
1989* $ 10,020 $ 0 $ 0 $ 10,020 $ 10,424 $ 10,507 $ 10,016
</TABLE>
* From November 16, 1989 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Yen Fund on
November 16, 1989 assuming the .40% sales charge had been in effect, the
net amount invested in fund shares was $ 9,960 . The fund did not
distribute any dividends or capital gains during the period.
During the period from November 16, 1989 (commencement of operations) to
December 31, 1996, a hypothetical investment in Sterling fund would have
grown to $ 17,659 , including the effect of the fund's .40% sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P. INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 17,659 $ 0 $ 0 $ 17,659 $ 26,762 $ 30,131 $ 12,597
1995 $ 15,309 $ 0 $ 0 $ 15,309 $ 21,764 $ 23,411 $ 12,192
1994 $ 14,731 $ 0 $ 0 $ 14,731 $ 15,820 $ 17,123 $ 11,890
1993 $ 13,406 $ 0 $ 0 $ 13,406 $ 15,614 $ 16,312 $ 11,581
1992 $ 13,107 $ 0 $ 0 $ 13,107 $ 14,184 $ 13,943 $ 11,271
1991 $ 14,910 $ 0 $ 0 $ 14,910 $ 13,177 $ 12,994 $ 10,953
1990 $ 14,034 $ 0 $ 0 $ 14,034 $ 10,099 $ 10,451 $ 10,627
1989* $ 10,279 $ 0 $ 0 $ 10,279 $ 10,424 $ 10,507 $ 10,016
</TABLE>
* From November 16, 1989 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Sterling Fund
on November 16, 1989 assuming the .40% sales charge had been in effect, the
net amount invested in fund shares was $ 9,960 . The fund did not
distribute any dividends or capital gains during the period.
During the period from November 16, 1989 (commencement of operations) to
December 31, 1996, a hypothetical investment in Deutsche Mark fund would
have grown to $ 17,161 , including the effect of the fund's .40% sales
charge.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P. INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 17,161 $ 0 $ 0 $ 17,161 $ 26,762 $ 30,131 $ 12,597
1995 $ 18,048 $ 0 $ 0 $ 18,048 $ 21,764 $ 23,411 $ 12,192
1994 $ 16,265 $ 0 $ 0 $ 16,265 $ 15,820 $ 17,123 $ 11,890
1993 $ 13,974 $ 0 $ 0 $ 13,974 $ 15,614 $ 16,312 $ 11,581
1992 $ 14,143 $ 0 $ 0 $ 14,143 $ 14,184 $ 13,943 $ 11,271
1991 $ 13,994 $ 0 $ 0 $ 13,994 $ 13,177 $ 12,994 $ 10,953
1990 $ 13,217 $ 0 $ 0 $ 13,217 $ 10,099 $ 10,451 $ 10,627
1989* $ 10,896 $ 0 $ 0 $ 10,896 $ 10,424 $ 10,507 $ 10,016
</TABLE>
* From November 16, 1989 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Deutsche Mark
Fund on November 16, 1989 assuming the .40% sales charge had been in
effect, the net amount invested in fund shares was $ 9,960 . The fund
did not distribute any dividends or capital gains during the period.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, a fund's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns available from stock mutual
funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
As of December 31, 1996, FMR advised over $ 28 billion in tax-free
fund assets, $ 96 billion in money market fund assets, $ 303
billion in equity fund assets, $ 61 billion in international fund
assets, and $ 25 billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity funds
under management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United States,
making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the Investment Company Act of 1940 (the 1940
Act), FDC exercises its right to waive the fund's front-end sales charge or
in connection with the fund's merger with or acquisition of any investment
company or trust. In addition, FDC has chosen to waive the fund's sales
charge in certain instances because of efficiencies involved in those sales
of shares. The sales charge will not apply to shares purchased by (a) a
current or former Managing General Partner, Trustee, or officer of a
Fidelity fund, or a current or retired officer, director, or regular
employee of FMR Corp. or Fidelity International Limited (FIL) or
their direct or indirect subsidiaries (a Fidelity Managing General
Partner, Trustee, or employee); (b) the spouse of a Fidelity Managing
General Partner, Trustee, or employee; (c) a Fidelity Managing General
Partner, Trustee or employee acting as custodian for a minor child; or (d)
a person acting as trustee of a trust for the sole benefit of the minor
child of a Fidelity Managing General Partner, Trustee, or employee.
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1997: New Year's
Day, Presidents' Day (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Although
FMR expects the same holiday schedule to be observed in the future, the
NYSE may modify its holiday schedule at any time. In addition, the funds
will not process wire purchases and redemptions on days when the Federal
Reserve Wire System is closed.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the Securities and
Exchange Commission (SEC). To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, a fund's NAV may
be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of a fund's
portfolio securities may not occur on days when the fund is open for
business.
Because the funds invest in securities that are traded in other markets on
days the funds are not open for business, each fund's net asset value per
share may be significantly affected on days when investors do not have
access to the fund to purchase or redeem shares. In addition, investor
requests for purchase and redemption of shares of the funds are processed
only once a day, as of the time net asset value is calculated (generally
4:00 p.m. Eastern time), while currency exchange rates change constantly,
and may experience significant fluctuations outside the normal U.S.
business day. If a fund experiences substantial purchase or redemption
orders, and the fund's investments are not adjusted promptly to reflect the
resulting cash flows, the fund could in effect have more or less than 100%
of its assets invested on a temporary basis. This could have a greater
effect on the funds than on funds that invest in U.S. securities, since
trading in most U.S. securities effectively ceases after 4:00 p.m., and
U.S. securities are not as subject to significant changes in value
overnight as are foreign currencies. The Managing General Partners will
determine fair value of a security if a material event occurs which would
affect net asset value on days when the NYSE is closed or after the end of
trading on any business day.
If the Managing Partners determine that existing conditions make cash
payments undesirable, redemption payments may be made in whole or in part
in securities or other property, valued for this purpose as they are valued
in computing a fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
POWER OF ATTORNEY AND OTHER INFORMATION. You will be required to request
admission as a Limited Partner (investor) of the fund and to agree to the
Power of Attorney set forth in Section XIV of the Partnership Agreement and
to the terms of the Partnership Agreement as a part of your application at
the time of your initial purchase of shares of any fund. By doing so, you
agree to the terms of the Partnership Agreements and Powers of Attorney of
all three funds, whether or not you purchase shares of more than one fund,
and your signature on the application for any fund shall be conclusive
evidence of your agreement to their terms. You cannot be accepted as a
Limited Partner until a properly executed application has been received by
the funds. It will be used to add you, with the consent of the Managing
General Partners, to the Limited Partners of your chosen fund. Shares of
the funds may be assigned only to secure a loan or by operation of law.
Although an assignee may not become a Limited Partner until he has executed
and submitted an application, shares will be redeemed by the fund upon the
request of the registered holder at any time at net asset value.
TAXES
ALLOCATIONS. As a Limited Partner of a fund, you must report your
distributive share of the fund's income, gains and losses for the fund's
tax year ending within or with your most recent tax year. You will be
allocated your proportionate part of the income, gains, losses, deduction
and credits actually realized by your fund for each day you were a
shareholder. Your share of losses will be allowed as a deduction only to
the extent of your adjusted basis in the fund shares you own and only to
the extent you are "at risk" with respect to your investment in a fund.
Long-term capital gains realized by the funds will be reportable as
long-term capital gains for tax purposes, regardless of how long you have
held your shares. Since income is allocated only when realized, allocation
of a fund's income for tax purposes may differ from the allocation of such
income for financial purposes. For example, if you purchased shares of a
fund when it had net unrealized gains and such gains were later realized,
taxable income may be allocated to you even though the value of your shares
did not change. The funds believe that their allocations of income and loss
correspond to the shareholders' respective economic interests in the funds
and should therefore be given effect for federal income tax purposes.
However, if the Internal Revenue Service subsequently modifies those
allocations, amounts previously reported by shareholders in their returns
would be affected.
Each fund's taxable year ends on December 31.
ADJUSTED TAX BASIS; REDEMPTIONS. You may realize a capital gain or loss
when you redeem or assign your shares. The tax treatment will depend in
part on your adjusted tax basis in the fund shares you own. The adjusted
basis of your shares will be your purchase price (including any sales
charge you paid), increased by the amount of income and capital gain
allocated to you for tax purposes (as shown on your K-1 tax form), and
reduced, but not below zero, by (i) any capital or other loss allocated to
you, and (ii) the amount of any cash distributions you received in
redemption of shares or otherwise. If you receive a distribution in cash
and it exceeds your adjusted tax basis immediately prior to the
distribution, you generally will realize a capital gain equal to the
excess.
INCOME OF THE FUNDS. Each fund's income will include interest, long and
short-term capital gains, and foreign currency exchange gain or loss.
Forward contracts and investments in foreign currencies and foreign
currency-denominated instruments or securities (other than certain options
and futures contracts, as described below) will generate, in whole or in
part, ordinary income or loss. Unrealized gains or losses on positions in
(i) forward contracts that are traded in the interbank market and (ii) most
exchange-traded foreign currency options and futures contracts are
generally marked-to-market at the end of each year and treated for tax
purposes as realized in such year.
The funds are likely to enter into combinations of investment positions
that may the result in (i) losses on one position which may be deferred to
the extent of any unrecognized gain on another position or (ii) long-term
capital gains or short-term capital losses which may be recharacterized,
respectively, as short-term gains and long-term losses. Similar treatment
may apply to combinations consisting of portfolio transactions and
transactions entered into by partners for their own accounts. Prospective
investors should review with their own tax advisers the potential for such
interactions and their possible tax consequences in light of their
individual circumstances.
TAX STATUS OF THE FUNDS. FMR has been advised that under current Treasury
regulations and rulings, and judicial decisions, each fund will be
classified as a partnership for federal income tax purposes. Under current
Treasury regulations and rulings, and judicial decisions, for each fund:
(1) General Partners and Limited Partners should be treated as partners of
the fund for federal income tax purposes;
(2) The adjusted basis of a partner's interest in the fund should be
determined pursuant to section 705(a) of the Code and will be equal to the
aggregate adjusted basis of all shares of the fund held by the partner;
(3) In determining his or her federal income tax, each partner should take
into account separately his or her distributive share of all items of
partnership income, gain, loss, deduction or credit.
(4) To the extent not otherwise provided in section 736 or 751 of the Code,
no gain should be recognized to a partner on a distribution by the fund in
redemption of the partner's shares or otherwise, except to the extent that
any money distributed to the partner exceeds the adjusted basis of the
partner's partnership interest immediately prior to the distribution; and
(5) No gain or loss should be recognized by the fund on a distribution of
cash or other property to a partner.
The funds will continue to be treated as partnerships for tax purposes
through 1997, but may be taxed as corporations beginning in 1998. If the
funds are taxed as corporations, they may be able to qualify as "regulated
investment companies" like most other mutual funds. If they do not qualify,
however, the funds may be required to pay taxes on their income at
corporate rates, in addition to taxes that investors in the fund would pay
on income distributed to them as dividends. To avoid this, the funds may
significantly modify their investment policies or liquidate prior to 1998.
Under current federal tax laws, certain transactions in which the funds
might engage, such as engaging in reverse repurchase agreements, may be
deemed taxable as "unrelated business taxable income" (UBTI) for retirement
plans and other tax-exempt investors.
The tax discussions in this Statement of Additional Information are based
on current interpretations of existing federal tax laws. No assurance can
be given that legislative, judicial or administrative changes may not be
forthcoming that could modify such rulings or statements. Such changes
could be retroactive. The Partnership Agreement provides that the General
Partners shall not be liable to any holder of shares or to any Limited
Partner by reason of any change in federal or state income tax laws as they
apply to each fund and the limited partners, whether such change occurs
through legislative, judicial or administrative action, as long as the
General Partners have acted in good faith and in a manner reasonably
believed to be in the best interests of the Limited Partners.
The foregoing discussion of certain federal income tax consequences of an
investment in a fund is general in nature. Investors are urged to consult
their tax advisers for information regarding the federal, state and local
tax consequences of investment in the funds.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the Investment Company Act of 1940 (1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company.
Therefore, through their ownership of voting common stock and the execution
of the shareholders' voting agreement, members of the Johnson family may be
deemed, under the 1940 Act, to form a controlling group with respect to FMR
Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
MANAGING GENERAL PARTNERS AND OFFICERS
Each fund's Managing General Partners, Members of the Advisory Board, and
executive officers are listed below. Except as indicated, each individual
has held the office shown or other offices in the same company for the last
five years. All persons named as Managing General Partners and Members of
the Advisory Board also serve in similar capacities for other funds advised
by FMR. The business address of each Managing General Partner and officer
who is an "interested person" (as defined in the Investment Company Act of
1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Managing General
Partners and Members of the Advisory Board is Fidelity Investments, P.O.
Box 9235, Boston, Massachusetts 02205-9235. Those Managing General Partners
who are "interested persons" by virtue of their affiliation with either the
trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Managing General Partner and President, is
Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director
and Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.)
Inc., and Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Managing General Partner and Senior Vice President,
is President of FMR; and President and a Director of FMR Texas Inc.,
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX (64), Managing General Partner (1991), is a management
consultant (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production). Until March
1990, Mr. Cox was President and Chief Operating Officer of Union Pacific
Resources Company (exploration and production). He is a Director of
Sanifill Corporation (non-hazardous waste, 1993), CH2M Hill Companies
(engineering), Rio Grande, Inc. (oil and gas production), and Daniel
Industries (petroleum measurement equipment manufacturer). In addition, he
is a member of advisory boards of Texas A&M University and the University
of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Managing General Partner (1992). Prior to her
retirement in September 1991, Mrs. Davis was the Senior Vice President of
Corporate Affairs of Avon Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she is a member of the President's
Advisory Council of The University of Vermont School of Business
Administration.
E. BRADLEY JONES (69), Managing General Partner. Prior to his retirement in
1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation,
Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical
products), and he previously served as a Director of NACCO Industries, Inc.
(mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc.
(1985-1995). In addition, he serves as a Trustee of First Union Real Estate
Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (64), Managing General Partner, is Executive-in-Residence
(1995) at Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at Columbia
University Graduate School of Business. Prior to 1987, he was Chairman of
the Financial Accounting Standards Board. Mr. Kirk is a Director of General
Re Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (53), Managing General Partner, is Vice Chairman and
Director of FMR (1992). Prior to May 31, 1990, he was a Director of FMR and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering
and construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (62), Member of the Advisory Board (1996), is the Vice
President of Finance for the University of North Carolina (16-school
system, 1995). Prior to his retirement in December 1994, Mr. McCoy was Vice
Chairman of the Board of BellSouth Corporation (telecommunications, 1984)
and President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company (electric
utility, 1996) and the Kenan Transport Co. (1996). Previously, he was a
Director of First American Corporation (bank holding company, 1979-1996).
In addition, Mr. McCoy serves as a member of the Board of Visitors for the
University of North Carolina at Chapel Hill (1994) and for the Kenan-Flager
Business School (University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (67), Managing General Partner and Vice-Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group (strategic
advisory services). Prior to his retirement in July 1988, he was Chairman
and Chief Executive Officer of Leaseway Transportation Corp. (physical
distribution services). Mr. McDonough is a Director of Brush-Wellman Inc.
(metal refining), York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (hydraulic systems, building
systems, and metal products, 1992), CUNO, Inc. (liquid and gas filtration
products, 1996), and Associated Estates Realty Corporation (a real estate
investment trust, 1993). Mr. McDonough served as a Director of
ACME-Cleveland Corp. (metal working, telecommunications, and electronic
products) from 1987-1996.
MARVIN L. MANN (63), Managing General Partner (1993) is Chairman of the
Board, President, and Chief Executive Officer of Lexmark International,
Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart
(marketing services, 1991), a Trammell Crow Co. In addition, he serves as
the Campaign Vice Chairman of the Tri-State United Way (1993) and is a
member of the University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Managing General Partner, is President of The
Wales Group, Inc. (management and financial advisory services). Prior to
retiring in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First Atlanta
Corporation (bank holding company). He is currently a Director of BellSouth
Corporation (telecommunications), ConAgra, Inc. (agricultural products),
Fisher Business Systems, Inc. (computer software), Georgia Power Company
(electric utility), Gerber Alley & Associates, Inc. (computer software),
National Life Insurance Company of Vermont, American Software, Inc., and
AppleSouth, Inc. (restaurants, 1992).
FRED L. HENNING JR. (57), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
JACQUES PEROLD (38) is Vice President and manager of Deutsche Mark,
Sterling and Yen portfolios, which he has managed since October 1995.
Previously, Mr. Perold was vice president of structured trading from 1994
to 1995, and director of equity trading research and development, from 1992
to 1994. Mr. Perold joined Fidelity in 1986.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
*FIDELITY MANAGEMENT & RESEARCH COMPANY, Non-Managing Partner, is the
investment adviser of the funds and other investment companies.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his or
her services for the fiscal year ended December 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation
from from Sterling from Deutsche from the
Yen FundA FundA Mark Fund A Fund Complex*A
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 1 1 3 137,700
Phyllis Burke Davis 1 1 3 134,700
Richard J. Flynn*** 1 1 4 168,000
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 1 1 3 134,700
Donald J. Kirk 1 1 3 136,200
Peter S. Lynch ** 0 0 0 0
William O. McCoy**** 1 1 1 85,333
Gerald C. McDonough 1 1 3 136,200
Edward H. Malone*** 1 1 3 136,200
Marvin L. Mann 1 1 3 134,700
Thomas R. Williams 1 1 3 136,200
</TABLE>
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
****During the period from May 1, 1996 through the present, William O.
McCoy has served as a Member of the Advisory Board of Yen Fund, Sterling
Fund, and Deutsche Mark Fund.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of fees in accordance with the Plan will have a
negligible effect on the fund's assets, liabilities, and net income per
share, and will not obligate the funds to retain the services of any
Trustee or to pay any particular level of compensation to the Trustee. The
funds may invest in such designated securities under the Plan without
shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result a in material cost to the funds.
Under the Partnership Agreement, (1) FMR, the Non-Managing General Partner,
may not voluntarily resign without giving at least 180 days' written notice
(unless a successor is appointed or its obligations are otherwise assumed),
and (2) the General Partners as a group will, if required for tax purposes
in the opinion of counsel, (a) own at least 1% of the outstanding number of
shares of each fund, or, if total contributions to a fund exceed $50
million, 1% divided by the ratio of the total contributions to $50 million
(but in no case less than 0.2%) of the outstanding number of shares of the
fund, and (b) maintain a minimum capital account balance in each fund equal
to 1% of the total positive capital account balances of the fund or
$500,000, whichever is less. FMR has undertaken to own a sufficient number
of shares of each fund to satisfy the ownership requirements of the
preceding sentence (if applicable) at all times while it is serving as
Non-Managing General Partner. If a fund or the Limited Partners terminate
the rights, duties and obligations of FMR as the Non-Managing General
Partner or as investment adviser, FMR may redeem its shares upon 30 days'
written notice.
As of December 31, 1996, the Managing General Partners, members of the
Advisory Board, and officers of the fund owned, in the aggregate, less
than 1 % of each fund's total outstanding shares.
The following owned of record or beneficially 5% or more of the
outstanding shares of the funds: National Financial Services Corporation,
Boston, MA (5.86%) (Yen Portfolio); Nathaniel D. Kramer, Rye Brook, NY
(7.28%) (Yen Portfolio); Peter C. S. Wu, Austin, TX (5.84%) (Yen
Portfolio); National Financial Services Corporation, Boston, MA (11.73%)
(Sterling Portfolio); James F. Mitchell, Blackheath London SE 3 9th,
England (8.78%) (Sterling Portfolio); Earl & Company, Omaha, NE (6.84%)
(Sterling Portfolio); Richard S. Newman, Irvine, CA (8.55%) (Sterling
Portfolio); Faroudja Laborato, Sunnyvale, CA (6.49%) (Deutsche Mark
Portfolio).
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Managing General Partners,
directs the investments of each fund in accordance with its investment
objective, policies, and limitations. FMR also provides each fund with all
necessary office facilities and personnel for servicing each fund's
investments, compensates all officers of each fund and all Managing General
Partners who are "interested persons" of the funds or of FMR, and all
personnel of each fund or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Managing General Partners, provide the management and administrative
services necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters, and other persons dealing with each fund; preparing all
general shareholder communications and conducting shareholder relations;
maintaining each fund's records and the registration of each fund's shares
under federal and state laws; developing management and shareholder
services for each fund; and furnishing reports, evaluations, and analyses
on a variety of subjects to the Managing General Partners.
In addition to the management fee payable to FMR and the fees payable to
FSC, each fund pays all of its expenses, without limitation, that are not
assumed by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Managing General
Partners. Although each fund's current management contract provides that
each fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to shareholders,
each fund has entered into a revised transfer agent agreement with FSC,
pursuant to which FSC bears the costs of providing these services to
existing shareholders. Other expenses paid by each fund include interest,
taxes, brokerage commissions, and each fund's proportionate share of
insurance premiums and Investment Company Institute dues. Each fund is also
liable for such non-recurring expenses as may arise, including costs of any
litigation to which each fund may be a party, and any obligation it may
have to indemnify its officers and Managing General Partners with respect
to litigation.
FMR is each fund's manager pursuant to management contracts dated December
1, 1990 which were approved by shareholders on November 14, 1990.
For the services of FMR under the contracts, each fund pays a monthly
management fee at the annual rate of .50% of the average net assets of the
fund throughout the month. During the fiscal years ended December 31, 1996,
1995, and 1994, FMR voluntarily agreed to reimburse each fund, to the
extent that each fund's aggregate operating expenses were in excess of
1.50% of the fund's average net assets. Management fees and management fee
reimbursement amounts for each fund are shown in the following tables:
YEN FUND:
December 31 Management Fees Amount of
Before Reimbursement Reimbursement
1996 $13,406 $13,406
1995 $25,637 $25,637
1994 $16,021 $16,021
STERLING FUND:
December 31 Management Fees Amount of
Before Reimbursement Reimbursement
1996 $5,614 $5,614
1995 $9,471 9,471
1994 $17,904 $17,904
DEUTSCHE MARK FUND:
December 31 Management Fees Amount of
Before Reimbursement Reimbursement
1996 $37,870 $37,870
1995 $68,357 $13,016
1994 $37,832 $37,832
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and repayment of the
reimbursement by each fund will lower its total returns.
CONTRACTS WITH FMR AFFILIATES
FSC, an affiliate of FMR, is transfer, dividend disbursing, and
shareholder servicing agent for each fund. FSC receives an annual account
fee and an asset-based fee each based on account size and fund type for
each retail account and certain institutional accounts. With respect to
certain institutional retirement accounts, FSC receives an annual account
fee and an asset-based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes. FSC also
collects small account fees from certain accounts with balances of less
than $2,500.
FSC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FSC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to shareholders, with the exception of
proxy statements.
FSC also performs the calculations necessary to determine each fund's NAV
and dividends, and maintains each fund's accounting records. The annual fee
rates for these pricing and bookkeeping services are based on each fund's
average net assets, specifically, .0600% of the first $500 million of
average net assets and .0300% of average net assets in excess of $500
million. The fee is limited to a minimum of $60,000 and a maximum of
$800,000 per year.
The table below shows the fees paid to FSC for pricing and bookkeeping
services, including related out-of-pocket expenses during each fund's last
three fiscal years:
Pricing and Bookkeeping Fees
1996 1995 1994
Yen Fund $60,000 $45,000 $45,001
Sterling Fund $60,000 $45,000 $45,001
Deutsche Mark Fund $60,000 $45,000 $45,002
FSC also receives fees for administering each fund's securities lending
program. For fiscal 1996, 1995, and 1994, there were no securities lending
fees incurred by the funds.
Sales Charge Revenues
1996 1995 1994
Yen Fund $13,778 $43,187 $19,354
Sterling Fund $4,608 $10,564 $7,267
Deutsche Mark Fund $8,037 $78,161 $33,247
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered. Promotional and administrative expenses in connection with the
offer and sale of shares are paid by FMR. The table below shows the sales
charge revenue paid to FDC for the following fiscal periods:
DESCRIPTION OF THE FUNDS
Fidelity Yen Performance Portfolio, L.P., Fidelity Sterling Performance
Portfolio, L.P., and Fidelity Deutsche Mark Performance Portfolio, L.P.,
were each organized as a limited partnership in the state of Delaware on
April 13, 1987. Currently each fund is the only fund of the limited
partnership, although each fund's Partnership Agreement allows the Managing
General Partners to create additional funds.
In the event that FMR ceases to be the investment adviser of a fund, the
right of that fund to use the identifying name "Fidelity" may be withdrawn.
The Partnership Agreement is set forth in its entirety beginning on page .
It includes information on the voting rights and liabilities of both the
Managing General Partners and Limited Partners. Each investor who becomes a
Limited Partner through purchase of shares of a fund will be deemed to have
agreed to all the terms of the applicable Partnership Agreement.
CUSTODIAN. The Chase Manhattan Bank, 4 Chase MetroTech Center, New York,
New York , is custodian of the assets of each fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of
any subcustodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of a fund or in deciding which
securities are purchased or sold by a fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. The Bank of New York and The Chase Manhattan
Bank, each headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Managing
General Partners may, from time to time, conduct transactions with various
banks, including banks serving as custodians for certain funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston,
Massachusetts serves as the fund's independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended December 31, 1996, and report to the audi tor, are
included in the funds' Annual Report, which is a separate report supplied
with this SAI. The funds' financial statements, including the financial
highlights, and report of the auditor are incorporated herein by reference.
For a free additional copy of the funds' Annual Report, contact Fidelity at
1-800-544-8888.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE COMMERCIAL PAPER:
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a
superior ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S COMMERCIAL PAPER:
Debt issues considered short-term in the relevant market may be assigned
a Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
DESCRIPTION OF MOODY'S INVESTORS SERVICE CORPORATE BONDS:
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody's applies numerical
modifiers of, 1, 2, and 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks on the lower end
of its generic rating category.
AAA - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or
by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of
such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
DESCRIPTION OF STANDARD & POOR'S CORPORATE BONDS:
Debt issues may be designated by Standard & Poor's as either investment
grade ("AAA" through "BBB") or speculative grade ("BB" through "D"). While
speculative grade debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major
exposures to adverse conditions. Ratings from AA to CCC may be modified by
the addition of a plus sign (+) or minus sign (-) to show relative standing
within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
The rating AA may be modified by the addition of a plus or minus to show
relative standing within the major rating categories.
Each fund's proper name, "Fidelity Yen Performance Portfolio, L.P.,"
"Fidelity Sterling Performance Portfolio, L.P.," and "Fidelity Deutsche
Mark Performance Portfolio, L.P.," appears in its respective partnership
agreement where indicated by "(Name of Portfolio)."
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
(Name of Portfolio)
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the
"Agreement"), dated the 12th day of July, 1989, is executed and delivered
by and among the general partners hereinafter named (collectively, the
"General Partners"), Arthur Loring (the "Initial Limited Partner") and the
other persons who are from time to time admitted as, and are listed in the
books and records of the partnership governed by this Agreement (the
"Fund") as, limited partners (collectively, the "Limited Partners") (the
General Partners and the Limited Partners being hereinafter collectively
referred to as the "Partners").
WHEREAS, the Fund was formed under the Delaware Revised Uniform Limited
Partnership Act (the "Partnership Act") upon the filing, pursuant to an
Agreement of Limited Partnership dated as of April 13, 1987 among the
Initial General Partners (as defined in Section IV(a)(1)) and the Initial
Limited Partner (the "Original Agreement"), of a Certificate of Limited
Partnership (the "Certificate") in the office of the Secretary of State of
the State of Delaware on April 14, 1987; and
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in its entirety as hereinafter set forth and to continue the
activities of the Fund in accordance with the provisions of this Agreement;
NOW THEREFORE, the parties hereby agree as follows:
I. NAME.
The name of this limited partnership is "(Name of Portfolio)." The
Managing General Partners (as defined in Section V(a)) shall have the right
at any time to change the name of the Fund. In the event of any such change
of name, the Managing General Partners shall promptly advise the Limited
Partners of the new name of the Fund. The Managing General Partners may
also adopt (and change from time to time) trade names or designations for
any Series (as defined in Section II(d)) of the Fund.
II. TERM OF THE FUND; INVESTMENT OBJECTIVE; OPERATING POLICY AND POWERS;
SERIES.
(a) Term. The term of the Fund commenced on the date of filing of the
Certificate in the Office of the Secretary of State of Delaware and shall
expire on December 31, 2051, unless sooner dissolved as hereinafter
provided.
(b) Investment Objective. The principal activity of the Fund shall be to
invest and reinvest the assets of each Series in investment securities and
other property.
(c) Operating Policy and Powers. The General Partners will cause the Fund
to operate as an open-end management investment company under the
Investment Company Act of 1940, as amended, and the rules, regulations and
any applicable exemptions thereunder (collectively, the "1940 Act").
Subject to (i) the limitations of the 1940 Act, (ii) this Agreement, and
(iii) the Fund's operating policies and investment and operating
limitations as set forth from time to time in the Fund's then current
prospectus(es) and statement(s) of additional information (collectively,
the "Prospectus") relating to the offer and sale of whole and fractional
units of limited partnership interest in the Fund and/or any Series (the
"Shares"), the Managing General Partners are authorized and empowered on
behalf of the Fund to do any and all acts necessary in pursuit of its
objective and to carry out the activities of the Fund, including, without
limitation, the following:
(1) To invest and reinvest cash and other property and to hold cash or
other property uninvested; to sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all assets of the Fund; and
to purchase, sell, exchange, lend, pledge, mortgage, hypothecate or
otherwise deal in options, stand-by commitments, futures contracts, forward
commitments, contracts of all kinds and any security, as defined in the
1940 Act, consistent with its investment objective;
(2) To adopt by-laws not inconsistent with this Agreement providing for
the conduct of the affairs of the Fund (the "By-laws") and to amend and
repeal them to the extent that they do not reserve that right to the
Limited Partners (which By-laws, as from time to time in effect, are
incorporated herein by reference and form a part of this Agreement);
(3) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(4) To engage professional advisors, investment advisors, depositaries,
custodians and/or administrators to supervise or administer the investments
or affairs of the Fund or any Series and, in general, to do such other acts
and incur such other expenses on behalf of the Fund or any Series as may be
necessary or advisable in connection with the conduct of the affairs of the
Fund or such Series;
(5) To retain a transfer agent and Partner servicing agent, or both;
(6) To provide for the sale and distribution of Shares through an
underwriter or sales agent or by the Fund itself, or both;
(7) To set record dates in the manner hereinafter provided;
(8) To delegate such authority as they consider desirable to any officers
of the Fund and to any agent, custodian or under writer;
(9) To sell or exchange any or all of the assets of the Fund or any
Series;
(10) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Managing
General Partners shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Managing General Partners shall deem proper;
(11) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(12) To hold any security or property in a form not indicating any
partnership - whether in bearer, unregistered or other negotiable
form - or either in its own name or in the name of a custodian or a
nominee or nominees, subject in any case to proper safeguards according to
the usual practice of investment companies;
(13) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Section II(d));
(14) To allocate assets, liabilities and expenses of the Fund to a
particular Series or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by or on behalf
of a particular Series shall be payable solely out of the assets belonging
to that Series as provided for in Section II(d);
(15) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held by the Fund; to consent to any contract, lease, mortgage,
purchase or sale of property by any such corporation or concern; and to pay
calls or subscriptions with respect to any security held by the Fund;
(16) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Fund or any matter in controversy including, but not limited
to, claims for taxes;
(17) To make distributions of income and of capital gains to Partners in
the manner hereinafter provided;
(18) To borrow money and to pledge assets belonging to the Fund or any
Series to secure borrowings consistent with its investment objective;
(19) To establish, from time to time, a minimum total investment in the
Fund or any Series and to require the redemption of the Shares of any
Partner or other holder of Shares whose investment is less than such
minimum upon giving notice to such Partner or other holder;
(20) To lend portfolio securities in accordance with applicable policies
of the Securities and Exchange Commission (the "SEC") with respect to the
lending of securities by investment companies under the 1940 Act; and
(21) To exercise any and all other powers which may be necessary or
appropriate to implement the foregoing purposes, policies and powers of the
Fund, including, without limitation, those generally granted to limited
partnerships under the Partnership Act.
(d) Series.
(1) The Managing General Partners may from time to time establish
separate segregated portfolios of Fund assets (the "Series") Each Series
may, within the overall scope of the Fund's investment objective and
activities, have distinct investment policies and shall be separately
identified. Each Series shall be represented by separately designated
Shares, divided into such numbers of whole and fractional Shares as shall
be determined by the Managing General Partners. Each Share of each Series
shall be identical to each other Share of such Series in all economic
respects and shall represent an equal and proportionate interest in the
relevant Series with each other outstanding Share of that Series. The
Shares of a particular Series will be preferred over the Shares of all
other Series in respect of, and will have an interest solely in, the Fund
assets belonging to that Series, as provided in Paragraph (2) below. The
Managing General Partners shall have full power and authority, in their
sole discretion and without obtaining any prior authorization or vote of
the Limited Partners holding Shares of any Series, to create and establish
(and to change in any manner) Shares or any Series or classes thereof with
such preferences, voting powers, rights and privileges as the Managing
General Partners may from time to time determine, to divide or combine the
Shares or any Series or classes thereof into a greater or lesser number, to
classify or reclassify any issued Shares into one or more Series or classes
of Shares, to abolish any one or more Series or classes of Shares and to
take such other action with respect to the Shares as the Managing General
Partners may deem desirable. The identification of each Series and the
Shares thereof existing from time to time, including the relative
designations, preferences participating, optional or other special rights
and powers thereof, shall be set forth from time to time in the Prospectus.
(2) All consideration received by the Fund for the issue or sale of
Shares of a particular Series, together with all assets of the Series in
which such consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be,
shall be referred to as "assets belonging to" that particular Series. In
addition, any assets, income, earnings, profits and proceeds thereof, funds
or payments which are not readily identifiable as belonging to any
particular Series shall be allocated by the Managing General Partners to,
between or among any one or more of the Series in such manner as they in
their sole discretion deem fair and equitable and shall be treated for all
purposes as assets belonging to the Series to which they are so allocated.
The assets belonging to a particular Series shall be so recorded upon the
books of the Fund, shall be held by the Managing General Partners solely
for the benefit of the holders of Shares of that Series and shall be
charged with the liabilities, expenses, costs, charges and reserves
(collectively, the "Liabilities") attributable to that Series. Any
Liabilities of the Fund which are not readily identifiable as attributable
to any particular Series shall be allocated and charged by the Managing
General Partners to, between or among any one or more of the Series in such
manner as they in their sole discretion deem fair and equitable. Each
allocation made by the Managing General Partners under this Paragraph and
their determinations as to which assets belong to, and which Liabilities
are attributable to, a particular Series shall be conclusive and binding
upon all Limited Partners and other holders of Shares of all Series for all
purposes. Any creditor of any Series may look only to the assets belonging
to that Series to satisfy such creditor's claims.
III. PLACE OF BUSINESS.
The principal place of business of the Fund shall be located at 82
Devonshire Street Boston, Massachusetts 02109. The Managing General
Partners may from time to time change the location of the Fund's principal
place of business and establish such additional places of business as they
may deem necessary or desirable for the conduct of the Fund's activities.
IV. CAPITAL CONTRIBUTIONS.
(a) General Partners' Contributions.
(1) Each person who signed the Original Agreement as a general partner
(an "Initial General Partner") has purchased the number of Shares and has
contributed the amount in cash to the Fund set forth on Schedule "A" to
this Agreement and incorporated herein by this reference.
(2) Notwithstanding anything to the contrary that may be expressed or
implied herein, the General Partners, taken together, shall at all times
during the Fund's existence maintain a positive balance in their Capital
Accounts (as defined in Section IV(e)), in the aggregate, equal to at least
the lesser of $500,000 or 1% of the aggregate positive Capital Account
balances of all Partners, as long as current law, regulations, Internal
Revenue Service policy or interpretations thereof, in the opinion of
counsel, require the General Partners to maintain such balance in order to
enable the Fund to qualify, or obtain a ruling from the IRS that it
qualifies, as a partnership for federal income tax purposes. In the event
that the Fund has more than one Series, the General Partners shall maintain
positive balances in their Sub-Accounts relating to such Series, which will
satisfy the requirements of this section separately with respect to each
such Series.
(3) The Non-Managing General Partners (as defined in Section V(a)),
collectively, shall purchase, as necessary, that number of Shares of any
Series which, when added to all Shares owned by the Managing General
Partners, will comply with the requirements of Paragraph (2). In addition,
the Non-Managing General Partners, collectively, shall purchase such
additional Shares of any Series as shall enable the General Partners, in
the aggregate, to meet the requirements of Section VII(b)(4).
(b) Limited Partners' Contributions. The Initial Limited Partner has
purchased the number of Shares set forth on Schedule "A: and has
contributed $10 in cash to the Fund for each Share purchased. Subsequently
admitted Limited Partners will contribute, with respect to each Share of
any Series purchased, the "Net Asset Value" thereof, as determined in
accordance with Section IV(d).
(c) Form of Contributions. Contributions may be made only in cash (U.S.
dollars) or such other property or currency which is approved by the
Managing General Partners.
(d) Determination of Net Asset Value. The term "Net Asset Value" of any
Series shall mean that amount by which the assets of that Series exceed its
liabilities, all as determined by or under the direction of the Managing
General Partners, in the manner set forth in the Prospectus. The Net Asset
Value per Share shall be determined on such days and at such times as the
Managing General Partners may determine. The Managing General Partners may
suspend the determination of Net Asset Value as permitted under the 1940
Act. All determinations of Net Asset Value and appraisals of assets and
liabilities made in good faith by the Managing General Partners or their
delegates shall be binding and conclusive upon all Partners, other holders
of Shares and other interested persons.
(e) Capital Accounts. In addition to any capital accounts required to be
maintained for accounting purposes in accordance with generally accepted
accounting principles, the Fund shall maintain a capital account for each
Partner for federal income tax purposes ("Capital Account"). Each Capital
Account shall be maintained in accordance with section 704 of the Internal
Revenue Code of 1986, as amended (the "Code"), and regulations thereunder.
If a Partner owns Shares in more than one Series, that Partner's Capital
Account shall be divided into one sub-account for each such Series
("Sub-Account"), and each addition to or subtraction from any Capital
Account shall be allocated to the Sub-Account of the Series giving rise to
such addition or subtraction. On a daily basis (or such other basis as may
be determined by the Managing General Partners), each Capital Account and
each Sub-Account, as appropriate, shall be credited with the Partner's
share of income and gain, shall be charged with such Partner's share of
deductions, losses, distributions and withholding taxes (if any) and shall
otherwise appropriately reflect transactions of the Series and the
Partners. Each Partner's Capital Account and each Sub-Account, as
appropriate, shall be adjusted to reflect any purchases and redemptions of
Shares by such Partner at such time as determined by the Managing General
Partners. Adjustments to Capital Accounts and to Sub-Accounts for income
tax purposes to take into account allocations of gains and losses realized
by each Series shall be made in the manner described herein. A substituted
Limited Partner shall be deemed to succeed to the Capital Account and
Sub-Accounts of the Partner whom such substituted Limited Partner replaced.
V. GENERAL PARTNERS.
(a) Identity and Number. The names and addresses of the General Partners
are set forth on Schedule "A: to this Agreement, on which each is
designated either as a "Managing General Partner" or as a "Non-Managing
General Partner." Hereafter, the number of Managing General Partners shall
be fixed from time to time by the Managing General Partners. A Managing
General Partner or Non-Managing General Partner shall serve until the
occurrence of an event described in Section V(i) or Section V(j),
respectively.
(b) Managing General Partners and Non-Managing General Partners. Only
natural persons may act as Managing General Partners, and each General
Partner who is a natural person shall act only as a Managing General
Partner. Any General Partner which is not a natural person shall act as a
Non-Managing General Partner. Except as provided in Sections V(c) and X(e),
a Non-Managing General Partner as such shall take no part in the
management, conduct or operation of the Fund's affairs and shall have no
authority to act on behalf of the Fund or to bind the Fund.
(c) Management and Control. The Fund will be managed by the Managing
General Partners, who will have complete and exclusive control over the
management, conduct and operation of the Fund's affairs. Except as
otherwise specifically provided in this Agreement, the Managing General
Partners shall have the rights, powers and authority, on behalf of the Fund
and in its name, to exercise all of the rights, powers and authority of
partners of a partnership without limited partners under the Partnership
Act. Subject to the provisions of the 1940 Act, (1) the Managing General
Partners may contract on behalf of the Fund with one or more banks, trust
companies, investment advisers or other persons (which may be affiliates of
a General Partner) for the performance of such functions as the Managing
General Partners may determine, but subject always to their continuing
supervision, such functions to include, but not be limited to, the
investment and reinvestment of all or part of the Fund's assets, the
execution of portfolio transactions, the provision of investment advisory,
statistical and research facilities and any or all administrative
functions, and (2) a Non-Managing General Partner or an affiliate of a
General Partner may act as an investment adviser to the Fund or any Series
and shall be compensated for such services in accordance with the terms of
any investment advisory agreement which may be executed by the Fund or any
Series and such Non-Managing General Partner or affiliate. The Managing
General Partners may also appoint agents to perform such duties on behalf
of the Fund as they deem desirable. The Managing General Partners shall
devote themselves to the Fund's activities to the extent they may determine
necessary for the efficient conduct thereof, which it is understood shall
not, however, occupy their full time. Any General Partner may also engage
in other activities or businesses, whether or not similar in nature to the
activities of the Fund, subject to the limitations of the 1940 Act. Upon
the occurrence of an event described in Section V(i), the Managing General
Partners shall, within 90 days after such event, meet for the purposes of
determining whether to continue the Fund and whether, in their discretion,
but subject to the requirements of Section V(k), to elect a successor
Managing General Partner or Partners or to reduce the number of Managing
General Partners.
(d) Action by Managing General Partners. Unless otherwise required by the
1940 Act with respect to any particular action, the Managing General
Partners shall act only by the vote of a majority of the Managing General
Partners in attendance at a meeting, duly called, at which a quorum of the
Managing General Partners is present or by unanimous written consent
without a meeting or by telephone consent (provided a quorum of Managing
General Partners participate in such telephone meeting). At any meeting of
the Managing General Partners, a majority of the Managing General Partners
shall constitute a quorum. No single Managing General Partner shall have
authority to act on behalf of the Fund or to bind the Fund, provided,
however, that the Managing General Partners by majority vote may delegate
to any one or more of their number their authority to approve particular
matters or take particular action on behalf of the Fund. The Managing
General Partners may elect a Chairman who shall preside at meetings and
such other agents or officers of the Fund as they may deem advisable to
carry out its affairs.
(e) Designation of Tax Matters Partner. The Fund's "Tax Matters Partner,"
as defined in section 6231(a)(7) of the Code, shall be designated by the
Managing General Partners and may change from time to time as determined by
the Managing General Partners. The Tax Matters Partner is authorized, at
the Fund's or any affected Series' sole cost and expense, to represent, and
to retain legal counsel and other appropriate assistance to represent, the
Fund or such Series and each Limited Partner or other holder of Shares, in
connection with all examinations of the Fund's or such Series' affairs by
tax authorities, including any resulting claim, action, suit or proceeding
(as defined in Section V(m)). Each Limited Partner or other holder of
Shares agrees to cooperate with the Managing General Partners and to do or
refrain from doing any and all things reasonably required by the Managing
General Partners in connection therewith. The Managing General Partners may
take any other appropriate action with respect to any such tax matters,
including, but not limited to, settlement, compromise or arbitration of any
such examination or any resulting claim, action, suit or proceeding,
without the consent of any Limited Partners or other holders of Shares, and
any such action shall be binding on each Limited Partner or other holder of
Shares
(f) Limitations on Authority of Managing General Partners. The Managing
General Partners shall have no authority, without the vote or written
consent or ratification of all of the Limited Partners, to
(1) do any act in contravention of this Agreement,
(2) do any act which wold make it impossible to carry on the ordinary
activities of the Fund or
(3) possess Fund property, or assign their rights in specific Fund
property, for other than a Fund purposes. However, nothing herein shall
preclude dissolution of the Fund in accordance with this Agreement.
(g) Management and Control by Non-Managing General Partners. Except as
otherwise provided in sections V(c) and X(e), the Non-Managing General
Partners as such shall have no power to engage in the management, conduct
or operation of the Fund's affairs nor to exercise any of the rights,
powers and authority of a Managing General Partner.
(h) General Partners as Limited Partners. A General Partner may also
become a Limited Partner without obtaining the consent of the Limited
Partners and thereby become entitled to all the rights of a Limited Partner
to the extent of the limited partnership interest so acquired. Such event
shall not, however, be deemed to reduce or otherwise affect any of the
General Partner's liability hereunder as a General Partner. Termination of
a person's status as a General Partner shall not affect such person's
status, if any, as a Limited Partner.
(i) Termination of Status of a Managing General Partner as a General
Partner. A Managing General Partner shall have no further right, power or
authority to act as a general partner of the Fund (except to execute any
amendment to this Agreement and/or the Certificate to evidence the
termination of his status as such), and his interest as a general partner
shall terminate, if he
(1) dies, becomes bankrupt or is incapacitated,
(2) voluntarily withdraws upon not less than 90 days' written notice to
the other Managing General Partners, unless such notice is waived by the
Managing General Partners,
(3) is removed by the other Managing General Partners pursuant to a vote
taken at a meeting, duly held, of the Managing General Partners,
(4) is removed at a meeting of the Limited Partners called for such
purpose by a vote of at least two-thirds of the outstanding Shares of all
Series voting as a single class, or
(5) fails to be elected at a meeting of the Limited Partners called for
such purpose under Section X(e), provided that the termination of his
interest, and his right, power and authority to act, as a general partner
of the Fund shall not occur until his successor has been duly elected and
admitted to the Fund as a Managing General Partner or the number of
Managing General Partners has been reduced by the remaining Managing
General Partners, and provided, further, that the failure of any Managing
General Partner to be reelected shall not cause a dissolution of the Fund
and the operations of the Fund shall be continued by all remaining and
successor Managing General Partners.
A Managing General Partner shall not be entitled to any special payment
from the Fund as a result of the termination of his status as general
partner. A terminated Managing General Partner may, if he chooses to do so,
either redeem his Shares in accordance with Section XI(a) or retain his
Shares as a Limited Partner.
(j) Termination of Status of a Non-Managing General Partner as a General
Partner. A Non-Managing General Partner shall have no further right, power
or authority to act as a general partner of the Fund (except to execute any
amendment to this Agreement and/or Certificate to evidence this termination
of its status as such), and its interest as a general partner shall
terminate, upon the occurrence of any of the following events:
(1) the Non-Managing General Partner's voluntary withdrawal, upon 90
days' written notice to the Managing General Partners; provided that a
Non-Managing General Partner shall not voluntarily withdraw or otherwise
terminate its status as a Non-Managing General Partner until the earliest
of (A) 90 days from the date such Non-Managing General Partner gives the
Managing General Partners written notice of its intention to withdraw as a
Non-Managing General Partner, (B) either the date that (i) at least one of
the existing Non-Managing General Partners agrees to assume the obligations
of the withdrawing Non-Managing General Partner under Section IV(a)(3) or
(ii) a successor Non-Managing General Partner, who has agreed to assume
such obligations, is elected by the Managing General Partners or (C) the
date a Managing General Partner assumes the obligations of the withdrawing
Non-Managing General Partner under Section IV(a)(3);
(2) the Non-Managing General Partner is dissolved or otherwise terminates
its existence;
(3) a petition in bankruptcy is filed by the Non-Managing General
Partner;
(4) an involuntary petition in bankruptcy is filed against the
Non-Managing General Partner and a trustee is appointed and confirmed after
an opportunity for a hearing;
(5) the Non-Managing General Partner makes an assignment for the benefit
of creditors of substantially all of its assets; or
(6) the Non-Managing General Partner is removed by vote of the Managing
General Partners.
The retirement, dissolution, bankruptcy or other withdrawal of a
Non-Managing General Partner shall not dissolve the Fund, provided that the
Managing General Partners elect to continue the business and operations of
the Fund and, if there are no other existing Non-Managing General Partners,
either a successor Non-Managing General Partner is elected by the Managing
General Partners or, if a Non-Managing General Partner is not elected, a
Managing General Partner assumes the obligations of the withdrawing
Non-Managing General Partner under Section IV(a)(3). A Non-Managing General
Partner shall not be entitled to any special payment from the Fund as a
result of the termination of its status as a general partner. A terminated
Non-Managing General Partner may, if it chooses to do so, redeem its Shares
in accordance with Section XI(a) or retain its Shares as a Limited Partner.
(k) Additional or Successor Managing General Partners. Subject to the
applicable requirements of the 1940 Act, between meetings of Partners the
Managing General Partners may elect additional or successor Managing
General Partners to fill vacancies (whether or not created by an increase
in the number of Managing General Partners) in the number of Managing
General Partners. The number of Managing General Partners shall be fixed
from time to time by the Managing General Partners and, at or after the
commencement of the business of the Fund, shall be not less than one.
Subject to the provisions of Section V(i), each additional or successor
Managing General Partner shall serve as a Managing General Partner until
the next meeting of Partners called for the election of Managing General
Partners and until his respective successor is duly elected and admitted.
If at any time more than a majority of the Managing General Partners
serving as such shall not have been approved at a meeting of Limited
Partners, then the Managing General Partners shall as promptly as possible,
and in any event within 60 days (unless the SEC shall extend such period),
cause a meeting of Limited Partners to be held for the purpose of electing
Managing General Partners such that at least a majority thereof shall have
been elected by the Limited Partners consistent with the requirements of
the 1940 Act.
(l) Liability to Limited Partners. The General Partners shall not be
personally liable for the repayment of the balance of the Capital Account
of any Limited Partner or any other amount standing in the account of any
other holder of Shares, including, but not limited to, contributions with
respect to Shares. Any such repayment shall be solely from the Fund's
assets. The General Partners shall not have any personal liability to any
Limited Partner or any other holder of Shares for any loss, damage or other
costs incurred by reason of (1) any failure to withhold income tax under
federal or state tax laws with respect to income allocated to Limited
Partners or such holders, (2) any change in federal or state income tax
laws, or in interpretations thereof, as they apply to the Fund, the Limited
Partners or such holders, whether such change occurs through legislative,
judicial or administrative action, (3) any error of judgment or mistake of
fact or law or (4) any other action, or failure to act or other matter,
unless the result of willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties. Any such loss, damage or costs shall be
satisfied from the Fund's assets.
(m) Assignment or Transfer of General Partners' Shares. A General Partner
may not assign Shares which he or it holds in his or its capacity as a
General Partner to any party without the consent of a majority of the
Managing General Partners (excluding such General Partner). Any assignee of
a General Partner for which such consent has been granted may not become a
substituted General Partner unless elected as such by the remaining
Managing General Partners, as provided in Section V(k), and shall otherwise
hold such Shares as a Limited Partner.
(n) Reimbursement and Compensation. Any Managing General Partner (other
than one who is an "interested person" as defined under the 1940 Act) may
receive compensation for his services as a Managing General Partner (as
determined by the Managing General Partners from time to time) and will be
reimbursed for all reasonable out-of-pocket expenses incurred in performing
his duties hereunder. Neither the payment of such compensation nor the
reimbursement of such expenses shall be deemed a distribution for purposes
of Section VII(b), nor shall such payment or reimbursement affect such
Partner's right to receive any distribution to which he would otherwise be
entitled as a holder of Shares.
(o) Indemnification.
(1) Subject to the exceptions and limitations contained in Paragraph (2)
below, every person who is, or has been, a General Partner, an officer,
director and/or trustee of a Non-Managing General Partner, an officer of
the Fund, or an agent of any of them (including persons who serve at the
Fund's request as directors, officers, or trustees of another organization
in which the Fund has any interest as a shareholder, creditor, or
otherwise) (a "Covered Person") shall be indemnified by the Fund to the
fullest extent permitted by law against any liability and against all
expenses reasonably incurred or paid by him in connection with any claim,
action, suit, or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered Person, and
against amounts paid or incurred by him in the settlement thereof. The
words "claim," "action," "suit," or "proceeding" shall apply to all claims,
actions, suits or proceeding s(civil, criminal or other, including
appeals), actual or threatened, while in office or thereafter, and the
words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(2) No indemnification shall be provided hereunder to a Covered Person
(A) who is finally adjudicated by a court or other body before which the
proceeding was brought (i) to be liable to the Fund or its Partners by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, or (ii) not
to have acted in good faith in the reasonable belief that his action was in
the best interest of the Fund;
(B) in the event of a settlement or other disposition not involving a
final adjudication as provided in (A), unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office
(i) by the court or other body approving the settlement or other
disposition,
(ii) by the vote of at least a majority of those Managing General
Partners who are neither interested persons of the Fund nor parties to the
matter, based upon a review of readily available facts (as opposed to a
full trial-type inquiry), or
(iii) by the written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Partner may, by appropriate legal
proceedings, challenge any such determination by the Managing General
Partners or independent counsel.
(3) The rights of indemnification herein provided may be insured against
by policies maintained by the Fund, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
occupy the position by virtue of which he was a Covered Person, and shall
inure to the benefit of the heirs, executors and administrators of a
Covered Person. Nothing contained herein shall affect any rights of
indemnification to which Fund personnel, other than Covered Persons, and
other persons may be entitled by contract or otherwise underlaw.
(4) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in Section V(o)(1) may be paid by the Fund from time to time prior to final
disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Fund if it
is ultimately determined that he is not entitled to indemnification under
this Section V(o); provided, however, that either (A) such Covered Person
provides appropriate security for such undertaking, (B) the Fund is insured
against losses arising out of any such advance payments or (C) either a
majority of the Managing General Partners who are neither interested person
of the Fund nor parties to the matter, or independent legal counsel in a
written opinion, determined, based upon a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section V(o).
(5) The indemnification obligations of the Fund under this Section V(o)
shall be satisfied solely out of Fund assets, and no Limited Partner shall
have any personal liability for the indemnification herein provided.
Further, to the extent that the liabilities and/or expenses to be
indemnified hereunder are incurred or paid in connection with a claim, act,
suit or proceeding involving activities or omissions that relate to one or
less than all of the Series, then such indemnification shall be paid only
from the assets of the relevant Series.
VI. LIMITED PARTNERS.
(a) Identity, Number and Contributions. The name and address of the
Initial Limited Partner and the number of Shares owned by him are set forth
in Schedule "A" to this Agreement. Additional Limited Partners may be
admitted with respect to each Series, and Shares of any Series may be sold
in accordance with procedures established by the Managing General Partners.
No consent of any Limited Partners shall be required in connection
therewith. Any person who purchases Shares, irrespective of whether he, or
his authorized representative, has executed an "account application" or any
other document related hereto, will be deemed to have consented to, and
will be bound by, the terms and conditions of this Agreement, including the
power of attorney set forth in Section XIV(d). The Managing General
Partners reserve the right, in their sole discretion, to reject any
purchaser of Shares as a Limited Partner. The names, addresses, capital
contributions and number (and identity by Series) of Shares held by each
Limited Partner shall be maintained in the books and records of the Fund.
(b) No Power to Control Fund Operations. A Limited Partner shall have no
right to and shall take no part in the management or control of the Fund's
operations and shall have no right or authority to act for or bind the
Fund, but may exercise the rights and powers of a limited partner under
this Agreement and the Partnership Act.
(c) Voting Rights of Limited Partners. Under the circumstances provided in
this Agreement or by the 1940 Act, the Limited Partners shall have the
right to vote (notwithstanding anything to the contrary in Section XIV(c))
on the following material matters relating to the activities of the Fund,
each such vote to be taken at a meeting of the Limited Partners called and
held pursuant to the provisions of Section X and the By-laws, if any:
(1) The election of Managing General Partners when so required by Section
X(e):
(2) The approval or termination of investment advisory or underwriting
contracts or distribution plans
(which may be with (a) Non-Managing General Partner or an affiliate
thereof);
(3) The approval or termination of the engagement of auditors; and
(4) Any other matters that the 1940 Act requires to be approved by the
Partners.
On any matter submitted to a vote of the Limited Partners, all Shares shall
be voted by individual Series (it being the intent hereof that matters
involving an individual Series shall be voted on only by Limited Partners
holding Shares of that Series) except (i) when required by the 1940 Act,
Shares shall be voted in the aggregate as a single class and not by
individual Series and (ii) when the Managing General Partners have
determined that the matter at issue affects the interests of more than one
Series, then the Limited Partners who are holders of Shares of all affected
Series shall be entitled to vote thereon as a single class.
(d) Limitation of Limited Partners' Liability. No Limited Partner shall be
liable for the debts or obligations of the Fund provided, however, that the
contribution of a Limited Partner shall be subject to the risks of the
operations of the Fund and subject to the claims of the Fund's creditors,
and provided further that, after any Limited Partner has received the
return of any part of his contribution, he will be liable to the Fund to
the extent required by the Partnership Act.
(e) Additional Contributions of Limited Partners; Assessments. No Limited
Partner shall be required to make any contributions to the Fund other than
the purchase price of his Share(s) at the Net Asset Value (including Shares
issued as provided in Section VII), and no Limited Partner shall be
required to lend monies to the Fund. No holder of any Share shall be
subject to additional assessments on or in respect of such Share, except as
provided in Section VI(d).
(f) Death of a Limited Partner. The death of a Limited Partner shall not
dissolve or terminate the Fund. In the event of such death, the personal
representative of the deceased Limited Partner shall have the right to be
substituted as a Limited Partner only in accordance with the provisions of
Section IX(b), but shall have the right to have the Fund redeem his Shares
in accordance with Section XI(a).
VII. DISTRIBUTIONS OF INCOME AND GAINS; TAX ALLOCATIONS.
(a) Distributions of Income and Gains.
(1) The Managing General Partners, in their sole discretion, shall
determine the amounts of net income and net realized capital gains of each
Series, if any, to be distributed to holders of Shares of such Series, the
record date for each such distribution and the time when each such
distribution shall be made; provided, however, that the Managing General
Partners shall not be required to make any distribution of net income or
net realized capital gains for any taxable year. Expenses of each Series
will be accrued on a regular basis determined by the Managing General
Partners. The Managing General Partners are authorized to establish such
reserves as may be required, in their judgment, with respect to any
anticipated or actual liabilities of a Series, including liabilities
relating to a Series' obligation to indemnify any Partner hereunder. For
purposes of this subsection, a person shall be deemed to be a holder of a
Share if he is the record holder thereof on the record date established for
the payment of a distribution therein (regardless of whether such record
holder has been admitted as substituted Limited Partner as herein
provided).
(2) Each distribution pursuant to Paragraph (1) to the holders of the
Shares of any Series shall be made in full and fractional Shares of such
Series valued at the Net Asset Value thereof on the applicable record date.
If so provided in the Prospectus, distributions of net income and net
realized capital and other gains may b made in cash (U.S. dollars) to those
holders of Shares who have made a proper election in the manner set forth
therein.
(b) Tax Allocations.
(1) General. For each fiscal year, items of income, gain, loss, deduction
and credit from operations of a Series (other than from the disposition of
capital assets of the Series) shall be allocated for federal income tax
purposes pro rata among the Partners holding Shares of such Series in
proportion to the number of such Shares owned by each Partner or in such
other manner that the Managing General Partners determine is required by
the federal income tax law. A holder of a Share of a Series shall be
allocated the proportionate part of such items actually realized by such
Series for each full accrual period during which such Share was owned by
such holder For purposes of this subsection, a person shall be deemed to be
a holder of a Share on a specific day if he is the record holder of such
Share on such day (regardless of whether or not such record holder has been
admitted as a substituted Limited Partner as herein provided). The
Partners' Capital Accounts and Sub-Accounts shall be adjusted to reflect
allocations of such items of income, gain, loss, deduction and credit.
(2) Allocations of Capital Gains and Losses. Capital gains and losses of
a Series shall be allocated for federal income tax purposes pro rata among
the Partners holding Shares of such Series in proportion to the number of
such Shares owned by each Partner, or in such other manner that the
Managing General Partners determine is required by the federal income tax
law, on the respective dates of disposition of the assets giving rise to
the gains or losses and the Partners' Capital Accounts and Sub-Accounts
shall be adjusted accordingly. Purchase of Shares and partial or complete
redemptions of Shares shall be regarding as occurring at the time the Net
Asset Value per Share is determined, after adjustments to the Partners'
Capital Accounts and Sub-Accounts for realized gains and losses on such day
have been made.
(3) Qualified Income Offset. If, during any taxable year, a Partner has a
"Qualified Income Offset Amount" (as defined in the regulations under
section 704 of the Code), then income or gain (or items thereof) shall be
allocated to such Partner in accordance with such regulations.
(4) General Partners' Minimum Interests. Notwithstanding anything herein
to the contrary, the interests (including Limited Partner interests) of all
the General Partners, taken together, in each material item of income,
gain, loss, deduction or credit of each Series, at all times during the
existence of such Series, shall equal at least the lesser of (A) 1% and (B)
the greater of (i) 0.2% and (ii) 1% divided by the ratio that total capital
contributions to such Series by all Partners bears to $50 million.
(c) Special Allocation of Loss. Notwithstanding anything herein to the
contrary, the amount of an item of loss of deduction that would reduce a
Limited Partner's Capital Account below zero shall instead be allocated to
the General Partners in proportion to their respective interests in the
Fund. A General Partner's interest in the Fund shall be expressed as a
fraction, the numerator of which is the sum of the product of (1) the Net
Asset Value per Share of each Series and (2) the number of Shares of each
Series held by the General Partner and the denominator of which is the sum
of all such numerators of all General Partners.
VIII. ACCOUNTING.
(a) Records and Accounting. At all times during the existence of the Fund,
books of account, which shall be adequate and appropriate for the Fund's
operations, shall be kept. Such books and records shall be kept on a basis
consistent with the accounting methods followed by the Fund for federal
income tax purposes and, where deemed appropriate, in accordance with
generally accepted accounting principles and procedures applied in a
consistent manner. Such books and records shall include such separate and
additional accounts for each holder of Shares as shall be necessary to
reflect accurately the rights and interests of such holder and shall
specifically reflect the name and address of each Partner and each other
holder of Shares and the number of Shares of each Series held by each for
the purpose of determining recipients of distributions and notices. The
Fund shall make its books and records available to Limited Partners, upon
five days' written notice, for any proper partnership purpose provided for
under the Partnership Act; however, the Managing General Partners reserve
the right to request a statement of the purposes for which the examination
is being requested.
(b) Fiscal Year. The Fund's fiscal year shall be the calendar year for
financial reporting and federal income tax purposes, unless the Managing
General Partners determine otherwise.
(c) Income Tax Information. The Managing General Partners shall cause to
be transmitted to each Partner and to the appropriate governmental
authorities such reports and information as shall be required by the 1940
Act, the Partnership Act, the Code and any other provision of law.
(d) In the event of a partial or complete redemption of Shares which
results in a distribution in excess of a Partner's tax basis in his Shares,
the Series may make an election to adjust the basis of Series assets under
Section 754 of the Code, and the Series may increase the tax basis of its
assets in accordance with Sections 734, 743(b) and 755 of the Code by the
difference between the amount of the distribution made to the redeeming
Partner in redemption of his Shares and his tax basis in his Shares.
IX. PROHIBITION OF ASSIGNMENT OF SHARES.
(a) Prohibition of Assignment. Except as otherwise provided in this
Section IX, no Limited Partner or other holder of Shares shall have the
right to sell, assign, pledge, hypothecate or otherwise transfer or
encumber (collectively "transfer") all or any part of his Shares except
with the prior consent of the Managing General Partners, which consent may
be withheld in the Managing General Partners' sole discretion. Any transfer
in violation of this Section IX shall be void and shall not be recognized
by the Fund for any purpose. In the case of a transfer (other than pursuant
to subsections (b) and (c)) approved by the Managing General Partners, the
transferee shall be admitted as a substituted Limited Partner upon his
execution of an account application and power of attorney in a form
satisfactory to the Managing General Partners and upon the satisfaction of
such other conditions as may be specified by the Managing General Partners.
If a permitted transferee is not admitted as a substituted Limited Partner,
then (1) such transferee shall become a holder of record of the Shares
transferred to him and shall be entitled to redeem such Shares in
accordance with the provisions of Section XI and to receive distributions
in respect of such Shares as herein provided, but neither such transferee
nor his transferor shall have any other rights of a Limited Partner
(including the right to vote on any matter or to inspect the books and
records of the Fund).
(b) Pledge of Shares; Death, Incompetence or Termination of Existence of a
Limited Partner. A Limited Partner may pledge his Shares as collateral to a
securities broker, bank or financial industry professional if the Limited
Partner gives the Fund prior written notice that a pledge is proposed to be
made. Any person who is holding Shares as collateral and becomes the owner
thereof due to foreclosure or otherwise, or any person who succeeds to the
ownership of Shares upon the death or incompetence of a Limited Partner
(or, in the case of a Limited Partner that is not a natural person, the
merger, dissolution or other termination of existence of such Limited
Partner), shall not be substituted as a Limited Partner without (1) the
consent of the Managing General Partners, which may be withheld in their
sole discretion, and (2) if such consent is given, the execution of an
account application and power of attorney in a form satisfactory to the
Managing General Partners and satisfaction of such other conditions as may
be specified by the Managing General Partners. If a pledgee who has become
the owner of Shares or any such successor in interest is not admitted as a
substituted Limited Partner, then, upon receipt by the Fund of evidence
satisfactory to the Managing General Partners of the pledgee's or the
successor's ownership of Shares, the pledgee or the successor shall become
the holder of record of the subject Shares and shall thereafter have the
same rights as specified in Section IX(a) with respect to a permitted
transferee who is not admitted as a substituted Limited Partner. If that
occurs, however, the Limited Partner who pledged such Shares or the
incompetent Limited Partner, as the case may be, shall cease to possess all
the rights of a Limited Partner (including the right to vote on any matter
or to inspect the books and records of the Fund).
X. MEETING OF LIMITED PARTNERS.
(a) Meeting and Call. Meetings of all Limited Partners or, as applicable,
of Limited Partners holding Shares of any particular Series, shall be held
either within the State of Delaware or at such other places on the date
fixed, from time to time, by the Managing General Partners for the
transaction of such matters as may be presented to the meeting and upon
which Limited Partners have the right to vote hereunder. Meetings shall be
called by the Managing General Partners whenever the holders of Shares of
at least 10% of all votes entitled to be cast at such meeting shall make a
duly authorized request that such meeting be called or as otherwise may be
required by this Agreement, the 1940 Act or the Partnership Act.
(b) Notice or Actual or Constructive Waiver of Notice. Written or printed
notice of each meeting shall state the time and place of the meeting and
the purpose or purposes for which the meeting is called and shall be given
at least ten days in advance of the meeting to each Limited Partner who is
the record holder of Shares of the concerned Series as of the record date
fixed by the Managing General Partners for determining Limited Partners
entitled to vote. Such notice shall be given either by mail at such
holder's address appearing on the books of the Fund or the address supplied
by him for the purpose of notice or by presenting it to him personally or
by leaving it at his residence or usual place of business before the date
of the meeting. If mailed, notice shall be deemed to be given when
deposited in the United States mail with postage thereon prepaid. Any
notice of a meeting of Limited Partners may be waived in writing by a
Limited Partner before or after the meeting. Actual attendance or
representation at any meeting shall be deemed equivalent to the giving of
such notice to such Partner.
(c) Voting. All Shares of each Series shall have equal voting rights, and
each Share shall have one vote. Each Partner shall have the right to vote
at any meeting the number of Shares standing of record in such Partner's
name as of the record date set forth in the notice of the meeting. A
majority of the votes cast at a meeting of Partners, duly called and at
which a quorum is present, shall be sufficient to take or authorize action
upon any matter which may come before the meeting, unless more than a
majority of votes cast is required by this Agreement or the 1940 Act, and a
plurality of all the votes cast at a meeting at which a quorum is present
shall be sufficient to elect a Managing General Partner; provided that
where any provision of law or this Agreement requires or permits that the
Limited Partners who are holders of Shares of any Series shall vote as a
Series, then a majority of the Shares of that Series voted on the matter
shall decide that matter insofar as that Series is concerned.
(d) Quorum. Except where a greater number is required under the terms of
this Agreement or the 1940 Act, a quorum shall consist of a majority of the
Shares entitled to vote at a meeting, whether present in person or
represented by proxy, except that where any provision of law permits or
requires the holders of a Series to vote as a Series, then a majority of
the Shares of that Series entitled to vote shall be necessary to constitute
a quorum for the transaction of business by that Series.
(e) Meeting to Elect Managing General Partners When None Exist. In the
event that no Managing General Partner shall remain for the purpose of
electing pursuant to Section XII(a)(5) to continue the operation of the
Fund, then the Non-Managing General Partners shall promptly call a meeting
of the Limited Partners, to be held within 90 days of the date the last
Managing General Partner ceased to act in such capacity, for the purpose of
determining whether to elect one or more successor Managing General
Partners who, if elected, will continue the operation of the Fund. For the
period of time from such date until the date of admission of one or more
successor Managing General Partners (if elected), the Non-Managing General
Partners shall continue the operations of the Fund without dissolution and
shall be permitted to engage in the management, conduct and operation of
the activities of the Fund and, otherwise, to exercise during such period
all of the powers of the Managing General Partners hereunder If at the
meeting called pursuant to this subsection the Limited Partners determine
not to elect one or more successor Managing General Partners, then the Fund
shall dissolve in accordance with Section XII and the assets of the Fund
shall be distributed pursuant to Section XIII.
XI. RETURN OF CAPITAL CONTRIBUTIONS.
(a) Redemption of Shares and Full Return of Capital Contributions.
(1) Except as otherwise provided herein and subject to applicable law,
rules, regulations and exemptions therefrom, any holder of Shares may
redeem all or any portion of his Shares at their Net Asset Value next
determined after the receipt by the Fund of a written request for
redemption in proper form. In addition, the Managing General Partners may
require the redemption of the Shares of any holder the value of whose
Shares fall below a specified minimum level established by the Managing
General Partners and set forth in the Prospectus or for any other reason
the Managing General Partners, in their sole discretion, deem appropriate.
(2) A request for redemption shall be deemed in proper form if it
complies which such requirements as are set forth in the Prospectus.
(3) The Managing General Partners reserve the right, in their complete
discretion, to redeem Shares of any Series in whole or in part either in
cash (U.S. dollars or other currency) or by the distribution of one or more
securities of such Series in kind. For this purpose portfolio securities
distributed in kind shall be valued at their fair market value as
determined for purposes of computing the redemption price.
(4) The Managing General Partners may, with respect to any or all Series,
suspend the right of redemption or postpone the date of payment of
redemption proceeds as permitted under the 1940 Act. Such suspension shall
take effect at such time as the Managing General Partners shall specify,
but not later than the close of business on the business day next following
the declaration of the suspension, and thereafter there shall be no right
of redemption or payment until the Managing General Partners shall declare
the suspension at an end. In the case of a suspension of the right of
redemption, a holder of Shares may either withdraw his request for
redemption or receive payment based on the Net Asset Value per Share
existing after the termination of the suspension.
(5) Notwithstanding anything in this Section XI(a) to the contrary, no
Partner shall be entitled to receive the return of any part of the capital
contribution(s) with respect to his Shares unless all liabilities of the
Fund or of the Series to which those Shares relate, except obligations to
General Partners and to Limited Partners on account of their capital
contributions, have been paid or, in the judgment of the Managing General
Partners, there remains property of the Fund or such Series sufficient to
pay them.
(6) Any distribution to a Partner upon redemption pursuant to this
Section XI(a) shall constitute a return in full of such Partner's capital
contribution(s) attributable to the Shares which are redeemed, regardless
of the amount distributed with respect to such Shares, and such Partner
shall not be entitled to any other or additional distribution by reason of
Section 17-604 of the Partnership Act or otherwise. No consent of any of
the Partners shall be required for the redemption of any Shares or return
of any redeeming Partner's capital contribution(s).
(b) Partial Returns of Capital Contributions. Except upon dissolution of
the Fund or as provided in Section XI(a), no Partner has the right to
redeem his Shares or demand the return of any part of the capital
contribution(s) with respect to his Shares The Managing General Partners
may, however, from time to time, elect to make partial returns of capital
contributions to Partners who are the holders of Shares of any Series
provided that
(1) all liabilities of the relevant Series to persons other than Partners
(except those liabilities arising pursuant to Section V(n)) have been paid
or, in the judgment of the Managing General Partners, there remains
property of the Series sufficient to pay them and
(2) the consent, express or implied, of all Partners holding Shares of
such Series is obtained.
For purposes of the foregoing, the condition of clause (2) shall be deemed
to have been satisfied if such partial return is made pro rata to the
holders of Shares of the relevant Series based upon the number of Shares
held by each such holder. Each Partner, by becoming a Partner, consents to
all such pro rata distributions theretofore or thereafter made in
accordance or thereafter made in accordance with such provisions.
XII. DISSOLUTION OF THE FUND.
(a) Dissolution of the Fund. The Fund shall be dissolved upon the earliest
to occur of
(1) the expiration of the Fund's term,
(2) the Fund's disposition of all, or substantially all, of its assets,
(3) the determination by Limited Partners who are holders of a majority
of the then outstanding Shares of all Series, at a meeting called for the
purpose, that the Fund should be dissolved,
(4) the determination of the Managing General Partners, by majority vote,
that the Fund should be dissolved,
(5) the occurrence of any event described in Section V(i), where there is
at least one remaining Managing General Partner, unless all the remaining
Managing General Partners elect in writing within 90 days of such event to
continue the operations of the Fund,
(6) the occurrence of any event described in Section V(j), unless the
Managing General Partners elect to continue the operations of the Fund and
either (A) there remains at least one Non-Managing General Partner, (B) a
successor Non-Managing General Partner is unanimously elected in writing by
the Managing General Partners within 90 days of such event or (C) at least
one Managing General Partner assumes the obligations of the Non-Managing
General Partner under Section IV(a)(3) or
(7) the occurrence of an event described in Section V(i) and/or (j) with
respect to a General Partner, unless within 90 days following the date of
withdrawal of the last remaining General Partner, all Limited Partners
agree in writing to continue the operations of the Fund and to the
appointment, effective as of the date of withdrawal of such last remaining
General Partner, of one or more successor Managing General Partners and a
successor Non-Managing General Partner.
(b) Dissolution and Reconstitution of the Partnership Following Withdrawal
of all General Partners. Notwithstanding the provisions of Section XII(a),
in the event of the occurrence of an event described in Section V(i) with
respect to the last remaining Managing General Partner(s), the Fund shall
be dissolved, but it shall be reconstituted and shall not be terminated,
and its operations shall be continued, if the Partners, at a meeting called
by the Non-Managing General Partners in accordance with Section X(e), elect
one or more successor Managing General Partners to continue the operations
of the Fund.
XIII. WINDING UP AND LIQUIDATION OF THE FUND.
(a) Winding Up. Upon the dissolution of the Fund the Managing General
Partners or a liquidator appointed by the Managing General Partners or, if
no Managing General Partners remain, a liquidator appointed by the
Non-Managing General Partner or, if no General Partners remain, by a
liquidator appointed by a majority in interest of all Limited Partners,
shall wind up the holders of Shares shall continue to share profits and
losses during dissolution in the same manner as before dissolution. The
proceeds from the liquidation of the assets of each Series, after paying or
providing for the payment of all liabilities of the Series and the
allowable costs of dissolution, shall be distributed, to the extent
permitted by the Partnership Act, pro rata among the holders of the Shares
of the relevant Series in proportion to them. Notwithstanding the
foregoing, after dissolution and before termination of the Fund the General
Partners will contribute to the Fund an amount equal to the lesser of (1)
the deficit balances, if any, in their respective Capital Accounts or (2)
the excess of 1.01% of the total capital contributions of the Limited
Partners at the time of dissolution of the Fund over the capital previously
contributed by the General Partners, as long as current law, regulations,
Internal Revenue Service policy or interpretations thereof, in the opinion
of counsel, require such contribution in order to enable the Fund to
qualify as a partnership for federal income tax purposes.
(b) Accountant's Statement. Each of the Partners shall be furnished with a
statement prepared by the Fund's accountants which shall set forth the
assets and liabilities of the Fund as at the date of complete liquidator,
as applicable, have complied with the foregoing distribution plan, the
Limited Partners shall cease to be such, and the Managing General Partners
or the liquidator, as applicable, shall execute, acknowledge and cause to
be filed a Certificate of Cancellation of the Fund.
(c) Gains or Losses during Winding Up. Any gain or loss on disposition of
the properties of any Series during the process of winding up the Fund
shall be credited or charged equally among the outstanding Shares of such
Series in accordance with the allocation methods prescribed in accordance
with Section VII. Any property distributed in kind shall be valued and
treated as though the property were sold and the cash proceeds were
distributed.
(d) Winding Up a Series. The winding up of any Series shall be
accomplished in a manner consistent with the principles of this Section
XIII.
XIV. FUND DOCUMENTATION; AMENDMENT OF AGREEMENT; POWER OF ATTORNEY.
(a) Agreement and other Documentation. The Managing General Partners have
caused the Certificate to be filed and recorded in accordance with the
Partnership Act in the Office of the Secretary of State of the State of
Delaware, and, to the extent they believe it is required by local law, in
the appropriate place in each state in which the Fund may hereafter
establish a place of business. The Managing General Partners shall also
cause to be filed, recorded and published such statements of fictitious
business name and other notices, certificates, statements or other
instruments required by the provisions of any applicable law of the United
States or any state or other jurisdiction which governs the formation of
the Fund or the conduct of its business from time to time.
(b) Amendment of Certificate. The Certificate shall be amended upon the
occurrence of any event requiring amendment thereof under the Partnership
Act.
(c) Amendment of Agreement. Except as otherwise required by this
Agreement, the Partnership Act or the 1940 Act, the Managing General
Partners may amend this Agreement with respect to all matters contained
herein. If any amendment of this Agreement requires the vote of the
Partners, pursuant to a provision hereof or of the Partnership Act or the
1940 Act, then upon the prior affirmative vote of the Managing General
Partners such amendment shall be voted upon as provided for in Sections
X(a) through (d). Such amendments shall have the same force and effect as
if they had received the unanimous approval of the Partners, and any
non-consenting Partner or other holder of Shares will be bound thereby.
Notwithstanding the foregoing, no such amendment shall affect the limited
liability of the Limited Partners. This Agreement need not be amended upon
the admission or withdrawal of any Limited Partners.
(d) Power of Attorney.
(1) Each Limited Partner, by virtue of his purchase of Shares and without
the necessity of executing any documentation, (A) is deemed to have
requested admission as a Limited Partner of the Fund and of any of the
following limited partnerships in which such Limited Partner may
participate in the future by purchasing limited partnership interests
("Fund Shares") therein: (i) Fidelity Yen Performance Portfolio, L.P.; (ii)
Fidelity Sterling Performance Portfolio, L.P.; or (iii) Fidelity Deutsche
Mark Performance Portfolio, L.P. (individually, a "Fidelity Fund"), and (B)
makes, constitutes and appoints each person or party who shall then or
thereafter be serving as a General Partner or as a general partner of any
Fidelity Fund (a "Fund General Partner") his true and lawful attorney, for
him and in his name, place and stead with full power of substitution, to
execute, acknowledge, make, swear to, verify, deliver, record, file and/or
publish (i) this Agreement or any other Fidelity Fund agreement of limited
partnership (a "Fidelity Fund Agreement"), (ii) the Certificate or any
similar document relating to a Fidelity Fund, (iii) any amendment to this
Agreement, a Fidelity Fund Agreement or any other document to reflect any
action of the Partners provided for in this Agreement or of the partners of
a Fidelity Fund ("Fund Partners") provided for in a Fidelity Fund
Agreement, whether or not such Limited Partner voted in favor of or
otherwise consented to such action and (iv) any other instrument,
certificate or document, provided such instrument, certificate or document
is consistent with the terms of this Agreement or any applicable Fidelity
Fund Agreement as then in effect.
(2) Each Limited Partner acknowledges and agrees that the respective
terms of this Agreement and the Fidelity Fund Agreement permit certain
amendments thereof to be effected and certain other actions to be taken or
omitted by or with respect to the Fund or any Fidelity Fund, in each case
with the approval of less than all the Partners or Fund Partners thereof,
provided that the holders of a specified percentage of the Shares held by
the Partners of the Fund or, as applicable, Fund Shares held by the Fund
Partners shall have voted in favor of or otherwise consented to such action
or the Managing General Partners (either of this Fund or, as applicable,
any Fidelity Fund) have so consented. Each Partner is fully aware that he
and each other Partner and Fund Partner have granted this power of attorney
and that all Partners and Fund Partners will rely on the effectiveness of
such powers with the view to the orderly administration of the affairs of
the Fund and/or the Fidelity Funds.
(3) The foregoing grant of authority by a Limited Partner (i) is a
special power of attorney coupled with an interest in favor of the General
Partners and the Fund General Partners and as such shall be irrevocable and
shall survive the death or insanity (or, in the case of a Limited Partner
that is not a natural person, the merger, dissolution or other termination
of the existence) of such Limited Partner, (ii) may be exercised for such
Limited Partner by (a) a facsimile signature of any General Partner or Fund
General Partner, as applicable; (b) listing all Limited Partners or all
limited partners of the applicable Fidelity Fund (the "Fund Limited
Partners"), including the Limited Partner, and executing the relevant
instrument by a facsimile signature of any General Partner or Fund General
Partner, as applicable; or (c) stating that all Limited Partners or Fund
Limited Partners, as applicable, while not specifically named, are
executing with relevant instrument, and executing such instrument with a
single signature or facsimile of any General Partner or Fund General
Partner, as applicable, acting as attorney-in-fact for all of them, and
(iii) shall survive the redemption by such Limited Partner of all or any
portion of his Shares and/or his Fund Shares.
(e) Power of Attorney by Additional Limited Partners. A power of attorney
as described in subsection (d) above may be one of the instruments which
the General Partners, under Section IX, shall require a substituted Limited
Partner to execute as a condition of his admission. Such power of attorney
may be set forth on instructions distributed by the Fund to holders of
Shares of any Series from time to time.
(f) Technical Amendments. No vote, approval or other consent shall be
required of the Partners to amend this Agreement or the Certificate in any
of the following respects: (1) to reflect any change in the amount or
character of the contribution of any Limited Partner or General Partner;
(2) to substitute or remove a Limited Partner; (3) to admit any additional
Limited Partner; (4) to reflect the retirement, resignation, death,
insanity or other withdrawal of a Managing General Partner; (5) to reflect
the termination of the status of a Non-Managing General Partner as a
General Partner; (6) to change the name of the Fund or a Series; or (7) to
correct any false or erroneous statement, or (8) to make a change in any
statement in order that such statement shall accurately represent the
agreement among the General and Limited Partners in this Agreement. Any
amendment reflecting the determination of the remaining General Partners to
continue the business of the Fund upon the retirement, withdrawal, death,
dissolution, bankruptcy, insanity or removal of a General Partner need be
signed only by or on behalf of any one remaining Managing General Partner.
The execution of any such amendment on behalf of a Partner may be effected
by his attorney-in-fact.
XV. MISCELLANEOUS MATTERS.
(a) Use of the Name "Fidelity". Fidelity Management & Research Company
("FMR") has consented to the use by the Fund or any Series of the
identifying word "Fidelity" in the name of the Fund or any Series at some
future date. Such consent is conditioned upon the continued employment of
FMR as investment adviser of each Series. As between the Fund and FMR, FMR
controls the use of the name of the Fund insofar as such name contains the
identifying word "Fidelity." FMR may from time to time use the identifying
word "Fidelity" in other connections and for other purposes, including,
without limitation, in the names of other investment companies,
corporations or businesses which it may manage, advise, sponsor or own or
in which it may have a financial interest FMR may require the Fund or any
Series to cease using the identifying word "Fidelity" in the name of the
Fund or such Series if the Fund or such Series ceases to employ FMR or a
subsidiary or affiliate thereof as investment adviser.
(b) Custodian. All assets of the Fund shall be held by a custodian meeting
the requirements of the 1940 Act and may be registered in the name of the
Fund or such custodian or a nominee. The terms of the custodian agreement
shall be determined by the Managing General Partners, which terms shall be
in accordance with the 1940 Act.
(c) Independent Activities. Each Partner reserves the right to conduct
activities similar to those conducted by the Fund.
(d) Interested Partners. The fact that a General Partner or one or more of
the Limited Partners is directly or indirectly interested in or connected
with any company or person with which or with whom the Fund may have
dealings, including, but not limited to, any company which renders
investment advisory, share transfer or related services, shall not preclude
such dealings or make them void or voidable, and the Fund or any of the
Partners shall not have any rights in or to such dealings or any profits
derived therefrom except any such rights as may inure under the 1940 Act.
(e) Tax Election. No election shall be made by any Partner to be excluded
from the application of the provisions of Subchapter K of the Code or from
any similar provisions of state laws, and no such election shall be made by
the Fund.
(f) Insurance. The Managing General Partners shall procure and maintain
insurance concerning the Fund's activities an amount and covering such
risks as may be appropriate in the judgment of the Managing General
Partners.
(g) Limitation of Liability. In connection with entering into any
contract, loan agreement, instrument or other document on behalf of the
Fund or any Series with a third party, the Managing General Partners shall
have the absolute right to include therein provisions to the effect that
such contract, loan agreement, instrument or other document constitutes a
nonrecourse obligation of the Fund or such Series only and that the
Managing General Partners shall have no liability thereon or thereunder,
and in any such case such third parties contracting with, extending credit
to or having claims against the Fund or such Series shall look only to the
assets of the Fund or such Series, as the case may be, for payment, and
neither the Partners, nor the Fund's officers, employees, agents or
delegates, whether past, present or future, shall be personally liable
therefor.
(h) Notices. All notices required or permitted to be given under this
Agreement in writing shall be given to the parties at the addresses set
forth on Schedule "A" to this Agreement or the most recent address provided
by any holder of Shares to the Fund, or at such other address as any of the
parties may hereafter specify in writing to the Fund.
(i) Captions. Section and Paragraph titles or captions contained in this
Agreement are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Agreement
or the intend of any provisions hereof.
(j) Variations in Pronouns. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, and to the
singular or plural, as the identity of the person or persons may require.
(k) Binding Agreement. This Agreement shall be binding on all of the
parties hereto, notwithstanding that all of the parties have not executed
the same document.
(l) Benefit. Except as herein otherwise provided to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties
signatory hereto and their respective heirs, executors, guardians,
representatives, successors and assigns.
(m) Nonrecourse Creditors. No creditor making a nonrecourse loan to the
Fund or any Series shall, by reason thereof, acquire any direct or indirect
interest in the profits, capital or property of the Fund or such Series
other than as a secured creditor.
(n) Agent for Service of Process. The Managing General Partners shall take
whatever action is necessary to designate an agent in Delaware upon whom
service of process upon the Fund may lawfully be made.
(o) Principles of Construction; Severability. This Agreement shall be
construed to the maximum extent possible to comply with all applicable
provisions of the 1940 Act and the Partnership Act. If, nevertheless, it
shall be determined by a court of competent jurisdiction that any provision
or wording of this Agreement shall be invalid or unenforceable under the
1940 Act, the Partnership Act or other applicable law, such invalidity or
unenforceability shall not invalidate the entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so
as to make it enforceable or valid within the requirements of such law,
and, in the event such term or provision cannot be so limited, this
Agreement shall be construed to omit such invalid or unenforceable
provision.
(p) Delaware Law. It is the intention of the parties that the internal
laws of the State of Delaware shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights and
duties of the parties.
(q) Integrated Agreement. This Agreement constitutes the entire
understanding and agreement among the parties hereto with respect to the
subject matter hereof, and, except for any other written agreements and
representations which the Managing General Partners may require of the
Partners, there are no other agreements, understandings, restrictions,
representations or warranties among the parties other than those set forth
herein.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights included in the Annual
Report for the fiscal year end December 31, 1996 are incorporated by
reference to the fund's Statement of Additional Information and were filed
on February 27, 1997 pursuant to Rule 30d-1 under the Investment Company
Act of 1940 and are incorporated herein by reference.
(b) Exhibits:
(1)(a) Amended and Restated Certificate of Limited Partnership, dated
December 21, 1994, is incorporated herein by reference to Exhibit 1(a) of
Post-Effective Amendment No. 12.
(b) Amended and Restated Agreement of Limited Partnership, dated April
13, 1987, is incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 12.
(2) Not applicable.
(3) Not applicable.
(4) Not applicable.
(5) Management Contract, dated December 1, 1990, between the Registrant and
Fidelity Management & Research Company, is incorporated herein by reference
to Exhibit 5 of Post-Effective Amendment No. 12.
(6)(a) General Distribution Agreement, dated April 25, 1989, between the
Registrant and Fidelity Distributors Corporation, is incorporated herein by
reference to Exhibit 6(a) of Post-Effective Amendment No. 12.
(b) Amendment to General Distribution Agreement, dated May 10, 1994,
between the Registrant and Fidelity Distributors Corporation, is
incorporated herein by reference to Exhibit 6(b) of Post-Effective
Amendment No. 12.
(c) Form of Bank Agency Agreement (most recently revised January, 1997)
is filed herein as Exhibit 6(c).
(d) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is filed herein as Exhibit 6(d).
(7)(a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, is incorporated herein by reference to Exhibit 7 of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.
(b) The Fee Deferrral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995, is
incorporated herein by reference to Exhibit 7(b) of Fidelity School Street
Trust's (File No. 2-57167) Post-Effective Amendment No. 47.
(8)(a) Custodian Agreement and Appendix C, dated August 1, 1994, between
The Chase Manhattan Bank, N.A. and the Registrant is incorporated herein by
reference to Exhibit 8(a) of Fidelity Investment Trust's Post-Effective
Amendment No. 59 (File No. 2-90649).
(b) Appendix A, dated October 17, 1996, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A. and the
Registrant is incorporated herein by reference to Exhibit 8(c) of Fidelity
Charles Street Trust's Post-Effective Amendment No. 57 (File No. 2-73133).
(c) Appendix B, dated July 18, 1996, to the Custodian Agreement, dated
August 1, 1994, between The Chase Manhattan Bank, N.A. and the Registrant
is incorporated herein by reference to Exhibit 8(b) of Fidelity Securities
Fund's Post-Effective Amendment No. 35 (File No. 2-93601).
(d) Fidelity Group Repo Custodian Agreement among The Bank of New York,
J. P. Morgan Securities, Inc., and the Registrant, dated February 12, 1996,
is incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(e) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
The Bank of New York and the Registrant, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(f) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November 13,
1995, is incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement between
Chemical Bank and the Registrant, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(g) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(h) Joint Trading Account Custody Agreement between The Bank of New
York and the Registrant, dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash Portfolios' (File
No. 2-74808) Post-Effective Amendment No. 31.
(i) First Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and the Registrant, dated July 14, 1995, is
incorporated herein by reference to Exhibit 8(i) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(9) Not applicable.
(10) Not applicable.
(11) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11.
(12) Not applicable.
(13) Written assurances that purchase representing initial capital was made
for investment purposes without any present intention of redeeming or
reselling is incorporated herein by reference to Exhibit 13 of
Post-Effective Amendment No. 12.
(14) Not applicable.
(15) Not applicable.
(16)(a) A schedule for the computation of total returns for Fidelity Yen
Performance Portfolio L.P., on behalf of the Trust is incorporated herein
by reference to Exhibit 16(a) of Post-Effective Amendment No. 13.
(b) A schedule for the computation of adjusted net asset values for
Fidelity Yen Performance Portfolio L.P., on behalf of the Trust is
incorporated herein by referenct to Exhibit 16(b) of Post-Effective
Amendment No. 13.
(17) Financial Data Schedule for the fund is filed herein as Exhibit 27.
(18) Not applicable.
Item 25. Persons Controlled by or Under Common Control with Registrant
The Managing General Partners of Registrant will be the same individuals
as the Trustees of other funds advised by FMR, each of which has Fidelity
Management & Research Company as its investment adviser. In addition, the
officers of these funds are substantially identical. Nonetheless,
Registrant takes the position that it is not under common control with
these other funds since the power residing in the respective boards and
officers arises as the result of an official position with the respective
funds.
Item 26. Number of Holders of Securities
As of December 31, 1996, there were 193 holders of record of units of
partnership interest.
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Trust
Instrument states that the Registrant shall indemnify any present trustee
or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by virtue
of his or her service as a trustee, officer, or both, and against any
amount incurred in settlement thereof. Indemnification will not be provided
to a person adjudged by a court or other adjudicatory body to be liable to
the Registrant or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties
(collectively, "disabling conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the Trust
Instrument, that the officer or trustee did not engage in disabling
conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to indemnify
and hold Service harmless against any losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names Service and/or the
Registrant as a party and is not based on and does not result from the
Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with Service's
performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from Service's acting upon any instruction(s) reasonably believed by it
to have been executed or communicated by any person duly authorized by the
Registrant, or as a result of Service's acting in reliance upon advice
reasonably believed by Service to have been given by counsel for the
Registrant, or as a result of Service's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.
J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
Dwight D. Churchill Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.
William Danoff Vice President of FMR and of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Larry A. Domash Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Vice President of FMR.
Bart Grenier Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.
Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.
Alan Leifer Vice President of FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the fund's custodian, The
Chase Manhattan Bank, 4 MetroTech Center, Brooklyn, N.Y.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Fidelity Yen Performance Portfolio, L.P.,
provided the information required by Item 5A is contained in the annual
report, undertakes to furnish to each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the
Registrant's latest annual report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 15 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 27th day
of February 1997.
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Managing General February 27, 1997
Partner
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber * Treasurer February 27, 1997
Kenneth A. Rathgeber
/s/J. Gary Burkhead Managing General Partner February 27, 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Managing General Partner February 27, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Managing General Partner February 27, 1997
Phyllis Burke Davis
/s/E. Bradley Jones ** Managing General Partner February 27, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Managing General Partner February 27, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Managing General Partner February 27, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Managing General Partner February 27, 1997
Marvin L. Mann
/s/Gerald C. McDonough ** Managing General Partner February 27, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Managing General Partner February 27, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
John H. Costello and John E. Ferris each of them singly my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorneys-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or
after January 1, 1997.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber__________ December 19, 1996
Kenneth A. Rathgeber
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may
do or cause to be done by virtue hereof. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
Exhibit 6(c)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to your
customers shares of the mutual funds, or the separate series or classes of
the mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios by
giving you written notice of the change. We are the Portfolios' principal
underwriter and act as agent for the Portfolios. You
(____________________________________) are a division or affiliate of a
bank (____________________________________) and desire to make Portfolio
shares available to your customers on the following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or electronic
format, included in the Portfolio's then currently effective registration
statement (or post-effective amendment thereto), and any information that
we or the Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Act of 1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for your
customers; in no transaction are you authorized to act as agent for us or
for any Portfolio; (ii) you will initiate transactions only upon your
customers' orders; (iii) we will execute transactions only upon receiving
instructions from you acting as agent for your customers; and (iv) each
transaction will be for your customer's account and not for your own
account. Each transaction will be without recourse to you, provided that
you act in accordance with the terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers only
at the applicable public offering price in accordance with the Prospectus.
If your customer qualifies for a reduced sales charge pursuant to a special
purchase plan (for example, a quantity discount, letter of intent, or right
of accumulation) as described in the Prospectus, you agree to make
Portfolio shares available to your customer at the applicable reduced sales
charge. You agree to deliver or cause to be delivered to each customer, at
or prior to the time of any purchase of shares, a copy of the then current
prospectus (including any stickers thereto), unless such prospectus has
already been delivered to the customer, and to each customer who so
requests, a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover purchase
orders that you have already received from your customers, or for your own
investment. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a change
in a Portfolio's net asset value from that used in determining the offering
price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for Portfolio
shares. All orders are subject to acceptance or rejection by us in our
sole discretion. We may, without notice, suspend sales or withdraw the
offering of Portfolio shares, or make a limited offering of Portfolio
shares.
(e) The placing of orders with us will be governed by instructions that
we will periodically issue to you. You must pay for Portfolio shares in
New York or Boston clearing house funds or in federal funds in accordance
with such instructions, and we must receive your payment on or before the
settlement date established in accordance with Rule 15c6-1 under the
Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws and
with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your customers
only in states where you may legally make such Portfolio's shares
available. You will not make available shares of any Portfolio unless such
shares are registered under the applicable state and federal laws and the
rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments Institutional
Operations Company ("FIIOC"). A confirmation statement evidencing
transactions in Portfolio shares will be transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions in
Portfolio shares in accordance with the terms of any account, program,
plan, or service established or used by your customers, and to confirm each
transaction to your customers on your behalf on a fully disclosed basis.
At the time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent with
respect to sales of Portfolio shares will be as provided in the Prospectus
or in the applicable schedule of agency fees issued by us and in effect at
the time of the sale. Upon written notice to you, we or any Portfolio may
change or discontinue any schedule of agency fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan"), we may make distribution
payments or service payments to you under the Plan. If a Portfolio does
not have a currently effective Plan, we or Fidelity Management & Research
Company may make distribution payments or service payments to you from our
own funds. Any distribution payments or service payments will be made in
the amount and manner set forth in the Prospectus or in the applicable
schedule of distribution payments or service payments issued by us and then
in effect. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of distribution payments or service payments, or
issue a new schedule. A schedule of distribution payments or service
payments will be in effect with respect to a Portfolio that has a Plan only
so long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of any
schedule of agency fees, distribution payments, or service payments, or the
termination of a Plan, any agency fees, distribution payments, or service
payments will be allowable or payable to you only in accordance with such
change, discontinuance, or termination. You agree that you will have no
claim against us or any Portfolio by virtue of any such change,
discontinuance, or termination. In the event of any overpayment by us of
any agency fee, distribution payment, or service payment, you will remit
such overpayment.
(d) If, within seven (7) business days after our confirmation of the
original purchase order for shares of a Portfolio, such shares are redeemed
by the issuing Portfolio or tendered for redemption by the customer, you
agree (i) to refund promptly to us the full amount of any agency fee,
distribution payment, or service payment paid to you on such shares, and
(ii) if not yet paid to you, to forfeit the right to receive any agency
fee, distribution payment, or service payment payable to you on such
shares. We will notify you of any such redemption within ten (10) days
after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to register
purchased shares in your name and account as nominee for your customers.
If you hold Portfolio shares as nominee for your customers, all
Prospectuses, proxy statements, periodic reports, and other printed
material will be sent to you, and all confirmations and other
communications to shareholders will be transmitted to you. You will be
responsible for forwarding such printed material, confirmations, and
communications, or the information contained therein, to all customers for
whose account you hold any Portfolio shares as nominee. However, we or
FIIOC on behalf of itself or the Portfolios will be responsible for the
costs associated with your forwarding such printed material, confirmations,
and communications. You will be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to in
paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and back-up
withholding instructions) necessary or appropriate for us to comply with
legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system of
the National Securities Clearing Corporation ("NSCC") will be governed by
applicable NSCC rules and procedures and any agreement or other arrangement
with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or more
customers, you will be responsible for determining, in accordance with the
Prospectus, whether, and the extent to which, a CDSC is applicable to a
purchase of Portfolio shares from such a customer, and you agree to
transmit immediately to us any CDSC to which such purchase was subject.
You hereby represent that if you hold Portfolio shares subject to a CDSC,
you have the capability to track and account for such charge, and we
reserve the right, at our discretion, to verify that capability by
inspecting your tracking and accounting system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to this
Agreement represents to the other party that it is either (i) a registered
broker/dealer under the 1934 Act, or (ii) a "bank" as defined in Section
3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents that
it is qualified to act as a broker/dealer in the states where it transacts
business, and it is a member in good standing of the National Association
of Securities Dealers, Inc. ("NASD"). It agrees to maintain its
broker/dealer registration and qualifications and its NASD membership in
good standing throughout the term of this Agreement. It agrees to abide by
all of the NASD's rules and regulations, including the NASD's Conduct Rules
- -- in particular, Section 2830 of such Rules, which section is deemed a
part of and is incorporated by reference in this Agreement. This Agreement
will terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized to
engage in the transactions to be performed under this Agreement, and you
agree to comply with all applicable federal and state laws, including the
rules and regulations of all applicable federal and state bank regulatory
agencies and authorities. This Agreement will terminate automatically
without notice in the event that you cease to be a "bank" as defined in
Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of your
acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is authorized
to make any representations concerning shares of a Portfolio other than
those contained in the Portfolio's Prospectus. In ordering Portfolio
shares from us under this Agreement, you will rely only on the
representations contained in the Prospectus. Upon your request, we will
furnish you with a reasonable number of copies of the Portfolios' current
prospectuses or statements of additional information or both (including any
stickers thereto).
(b) Any printed or electronic information that we furnish you (other
than the Portfolios' Prospectuses and periodic reports) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios will have no liability or responsibility to
you with respect to any such printed or electronic information. We or the
respective Portfolio will bear the expense of qualifying its shares under
the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed or
electronic information referred to in paragraph 6(b) above, in connection
with making Portfolio shares available to your customers without obtaining
our prior written approval. You may not distribute or make available to
investors any information that we furnish you marked "FOR DEALER USE ONLY"
or that otherwise indicates that it is confidential or not intended to be
distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless from any
claim, demand, loss, expense, or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of us, our
agents and employees, in carrying out our obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of your
customers which may be obtained in connection with this Agreement for the
purpose of solicitation of any product or service without your express
written consent. However, nothing in this paragraph or otherwise shall be
deemed to prohibit or restrict us or our affiliates in any way from
solicitations of any product or service directed at, without limitation,
the general public, any segment thereof, or any specific individual,
provided such solicitation is not based upon such list.
9. Duration of Agreement: This Agreement, with respect to any Plan, will
continue in effect for one year from its effective date, and thereafter
will continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Portfolio's Trustees who are not
interested persons of the Portfolio (as defined in the Investment Company
Act of 1940 (the "1940 Act")), or a majority of the outstanding shares of
the Portfolio, vote to terminate or not to continue the Plan. This
Agreement, other than with respect to a Plan, will continue in effect from
year to year after its effective date, unless terminated as provided
herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the amendment.
Either party to this Agreement may terminate the Agreement without cause by
giving the other party at least thirty (30) days' written notice of its
intention to terminate. This Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
(b) In the event that (i) an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970 is file
against you; (ii) you file a petition in bankruptcy or a petition seeking
similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against you seeking such relief; or (iii) you are
found by the SEC, the NASD, or any other federal or state regulatory agency
or authority to have violated any applicable federal or state law, rule or
regulation arising out of your activities as a broker/dealer or in
connection with this Agreement, this Agreement will terminate effective
immediately upon our giving notice of termination to you. You agree to
notify us promptly and to immediately suspend making Portfolio shares
available to your customers in the event of any such filing or violation,
or in the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(c) Your or our failure to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement
at a later date for the same or another cause. The termination of this
Agreement with respect to any one Portfolio will not cause its termination
with respect to any other Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be settled
by arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the NASD's Code of Arbitration Procedure in effect at the
time of the dispute. The arbitrators will act by majority decision and
their award may allocate attorneys' fees and arbitration costs between us.
Their award will be final and binding between us, and such award may be
entered as a judgment in any court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same
day delivery (with a confirming copy by mail). All notices to us shall be
given or sent to us at our offices located at 82 Devonshire Street, Mail
Zone L12A, Boston, Massachusetts 02109, Attn: Bank Wholesale Market. All
notices to you shall be given or sent to you at the address specified by
you below. Each of us may change the address to which notices shall be
sent by giving notice to the other party in accordance with this paragraph
12.
13. Miscellaneous: This Agreement, as it may be amended from time to time,
shall become effective as of the date when it is accepted and dated below
by us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and cancels
any prior agreement between us, whether oral or written, relating to the
sale of shares of the Portfolios or any other subject covered by this
Agreement. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B ]
Exhibit 6(d)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute shares of
the mutual funds, or the separate series or classes of the mutual funds,
listed on Schedules A and B attached to this Agreement (the "Portfolios").
We may periodically change the list of Portfolios by giving you written
notice of the change. We are the Portfolios' principal underwriter and, as
agent for the Portfolios, we offer to sell Portfolio shares to you on the
following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a broker/dealer
under the Securities Exchange Act of 1934 (the "1934 Act") and have
executed a written agreement with a bank or bank affiliate to provide
brokerage services to that bank, bank affiliate and/or their customers. As
used in this Agreement, the term "Bank" means a bank as defined in Section
3(a)(6) of the 1934 Act, or an affiliate of such a bank, with which you
have entered into a written agreement to provide brokerage services; and
the term "Bank Client" means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in the
Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or statement
of additional information (a "sticker"), all as filed with the Securities
and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In offering
and selling Portfolio shares to your customers, you agree to act as dealer
for your own account; you are not authorized to act as agent for us or for
any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers only
at the applicable public offering price in accordance with the Prospectus.
If your customer qualifies for a reduced sales charge pursuant to a special
purchase plan (for example, a quantity discount, letter of intent, or right
of accumulation) as described in the Prospectus, you agree to offer and
sell Portfolio shares to your customer at the applicable reduced sales
charge. You agree to deliver or cause to be delivered to each customer, at
or prior to the time of any purchase of shares, a copy of the then current
prospectus (including any stickers thereto), unless such prospectus has
already been delivered to the customer, and to each customer who so
requests, a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or for
your own investment. You also agree not to purchase any Portfolio shares
from your customers at a price lower than the applicable redemption price,
determined in the manner described in the Prospectus. You will not withhold
placing customers' orders so as to profit yourself as a result of such
withholding (for example, by a change in a Portfolio's net asset value from
that used in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for Portfolio
shares. All orders are subject to acceptance or rejection by us in our
sole discretion. We may, without notice, suspend sales or withdraw the
offering of Portfolio shares, or make a limited offering of Portfolio
shares.
(e) The placing of orders with us will be governed by instructions that
we will periodically issue to you. You must pay for Portfolio shares in
New York or Boston clearing house funds or in federal funds in accordance
with such instructions, and we must receive your payment on or before the
settlement date established in accordance with Rule 15c6-1 under the 1934
Act. If we do not receive your payment on or before such settlement date,
we may, without notice, cancel the sale, or, at our option, sell the shares
that you ordered back to the issuing Portfolio, and we may hold you
responsible for any loss suffered by us or the issuing Portfolio as a
result of your failure to make payment as required.
(f) You agree to comply with all applicable state and federal laws and
with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in states
where you may legally offer and sell such Portfolio's shares. You will not
offer shares of any Portfolio for sale unless such shares are registered
for sale under the applicable state and federal laws and the rules and
regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments Institutional
Operations Company ("FIIOC"). A confirmation statement evidencing
transactions in Portfolio shares will be transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions in
Portfolio shares in accordance with the terms of any account, program,
plan, or service established or used by your customers, and to confirm each
transaction to your customers on your behalf on a fully disclosed basis.
At the time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the applicable
schedule of concessions issued by us and in effect at the time of our sale
to you. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of concessions, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan"), we may make distribution
payments or service payments to you under the Plan. If a Portfolio does
not have a currently effective Plan, we or Fidelity Management & Research
Company may make distribution payments or service payments to you from our
own funds. Any distribution payments or service payments will be made in
the amount and manner set forth in the Prospectus or in the applicable
schedule of distribution payments or service payments issued by us and then
in effect. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of distribution payments or service payments, or
issue a new schedule. A schedule of distribution payments or service
payments will be in effect with respect to a Portfolio that has a Plan only
so long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply only
with respect to (i) shares of the "Fidelity Funds" (as designated on
Schedule A attached to this Agreement) purchased or maintained for the
account of Bank Clients, and (ii) shares of the "Fidelity Advisor Funds"
(as designated on Schedule B attached to this Agreement). Anything to the
contrary notwithstanding, neither we nor any Portfolio will provide to you,
nor may you retain, concessions on your sales of shares of, or distribution
payments or service payments with respect to assets of, the Fidelity Funds
attributable to you or any of your clients, other than Bank Clients. When
you place an order in shares of the Fidelity Funds with us, you will
identify the Bank on behalf of whose Clients you are placing the order; and
you will identify as a non-Bank Client Order, any order in shares of the
Fidelity Funds placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of any
schedule of concessions, distribution payments, or service payments, or the
termination of a Plan, any concessions, distribution payments, or service
payments will be allowable or payable to you only in accordance with such
change, discontinuance, or termination. You agree that you will have no
claim against us or any Portfolio by virtue of any such change,
discontinuance, or termination. In the event of any overpayment by us of
any concession, distribution payment, or service payment, you will remit
such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of this
Agreement are redeemed by the issuing Portfolio or tendered for redemption
by the customer within seven (7) business days after the date of our
confirmation of your original purchase order for such shares, you agree (i)
to refund promptly to us the full amount of any concession, distribution
payment, or service payment allowed or paid to you on such shares, and (ii)
if not yet allowed or paid to you, to forfeit the right to receive any
concession, distribution payment, or service payment allowable or payable
to you on such shares. We will notify you of any such redemption within
ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to register
purchased shares in your name and account as nominee for your customers.
If you hold Portfolio shares as nominee for your customers, all
Prospectuses, proxy statements, periodic reports, and other printed
material will be sent to you, and all confirmations and other
communications to shareholders will be transmitted to you. You will be
responsible for forwarding such printed material, confirmations, and
communications, or the information contained therein, to all customers for
whose account you hold any Portfolio shares as nominee. However, we or
FIIOC on behalf of itself or the Portfolios will be responsible for the
costs associated with your forwarding such printed material, confirmations,
and communications. You will be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to in
paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and back-up
withholding instructions) necessary or appropriate for us to comply with
legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system of
the National Securities Clearing Corporation ("NSCC") will be governed by
applicable NSCC rules and procedures and any agreement or other arrangement
with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or more
customers, you will be responsible for determining, in accordance with the
Prospectus, whether, and the extent to which, a CDSC is applicable to a
purchase of Portfolio shares from such a customer, and you agree to
transmit immediately to us any CDSC to which such purchase was subject.
You hereby represent that if you hold Portfolio shares subject to a CDSC,
you have the capability to track and account for such charge, and we
reserve the right, at our discretion, to verify that capability by
inspecting your tracking and accounting system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this Agreement
represents to the other party that (i) it is registered as a broker/dealer
under the 1934 Act, (ii) it is qualified to act as a broker/dealer in the
states where it transacts business, and (iii) it is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
Each party agrees to maintain its broker/dealer registration and
qualifications and its NASD membership in good standing throughout the term
of this Agreement. Each party agrees to abide by all of the NASD's rules
and regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will terminate
automatically without notice in the event that either party's NASD
membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of your
acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is authorized
to make any representations concerning shares of a Portfolio other than
those contained in the Portfolio's Prospectus. In buying Portfolio shares
from us under this Agreement, you will rely only on the representations
contained in the Prospectus. Upon your request, we will furnish you with a
reasonable number of copies of the Portfolios' current prospectuses or
statements of additional information or both (including any stickers
thereto).
(b) Any printed or electronic information that we furnish you (other
than the Portfolios' Prospectuses and periodic reports) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios will have no liability or responsibility to
you with respect to any such printed or electronic information. We or the
respective Portfolio will bear the expense of qualifying its shares under
the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed or
electronic information referred to in paragraph 6(b) above, in connection
with the offer or sale of Portfolio shares without obtaining our prior
written approval. You may not distribute or make available to investors
any information that we furnish you marked "FOR DEALER USE ONLY" or that
otherwise indicates that it is confidential or not intended to be
distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless from any
claim, demand, loss, expense, or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of us, our
agents and employees, in carrying out our obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of your
customers which may be obtained in connection with this Agreement for the
purpose of solicitation of any product or service without your express
written consent. However, nothing in this paragraph or otherwise shall be
deemed to prohibit or restrict us or our affiliates in any way from
solicitations of any product or service directed at, without limitation,
the general public, any segment thereof, or any specific individual,
provided such solicitation is not based upon such list.
9. Duration of Agreement: This Agreement, with respect to any Plan, will
continue in effect for one year from its effective date, and thereafter
will continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Portfolio's Trustees who are not
interested persons of the Portfolio (as defined in the Investment Company
Act of 1940 (the "1940 Act")), or a majority of the outstanding shares of
the Portfolio, vote to terminate or not to continue the Plan. This
Agreement, other than with respect to a Plan, will continue in effect from
year to year after its effective date, unless terminated as provided
herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the amendment.
Either party to this Agreement may terminate the Agreement without cause by
giving the other party at least thirty (30) days' written notice of its
intention to terminate. This Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
(b) In the event that (i) an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970 is filed
against you; (ii) you file a petition in bankruptcy or a petition seeking
similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against you seeking such relief; or (iii) you are
found by the SEC, the NASD, or any other federal or state regulatory agency
or authority to have violated any applicable federal or state law, rule or
regulation arising out of your activities as a broker/dealer or in
connection with this Agreement, this Agreement will terminate effective
immediately upon our giving notice of termination to you. You agree to
notify us promptly and to immediately suspend sales of Portfolio shares in
the event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement
at a later date for the same or another cause. The termination of this
Agreement with respect to any one Portfolio will not cause its termination
with respect to any other Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be settled
by arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the NASD's Code of Arbitration Procedure in effect at the
time of the dispute. The arbitrators will act by majority decision and
their award may allocate attorneys' fees and arbitration costs between us.
Their award will be final and binding between us, and such award may be
entered as a judgment in any court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same
day delivery (with a confirming copy by mail). All notices to us shall be
given or sent to us at our offices located at 82 Devonshire Street, Mail
Zone L12A, Boston, Massachusetts 02109, Attn: Bank Wholesale Market. All
notices to you shall be given or sent to you at the address specified by
you below. Each of us may change the address to which notices shall be
sent by giving notice to the other party in accordance with this paragraph
11.
13. Miscellaneous: This Agreement, as it may be amended from time to time,
shall become effective as of the date when it is accepted and dated below
by us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and cancels
any prior agreement between us, whether oral or written, relating to the
sale of shares of the Portfolios or any other subject covered by this
Agreement. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B]
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 15
to the Registration Statement on Form N-1A of Fidelity Yen Performance
Portfolio, L.P., of our report dated February 25, 1997 on the financial
statements and financial highlights included in the December 31, 1996
Annual Report to Shareholders of Fidelity Yen Performance Portfolio, L.P.
We also consent to the incorporation by reference in this Post-Effective
Amendment, of our report dated February 25, 1997 on the financial
statements and financial highlights included in the Annual Report to
Shareholders of Fidelity Sterling Performance Portfolio, L.P., and Fidelity
Deutsche Mark Performance Portfolio, L.P.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 26, 1997
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