(2_FIDELITY_LOGOS)FIDELITY
FOREIGN CURRENCY
FUNDS
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the funds have done over time.
FUND TALK 10 The manager's review of fund
performance, strategy and outlook.
FINANCIAL STATEMENTS 13 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 25 Notes to the financial statements.
REPORT OF INDEPENDENT 29 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
Please be advised that this fund is structured as a Limited Partnership.
Tax information for Limited Partnerships is reported on a Form K-1, not a
Form 1099. You should expect to receive a K-1 tax form from Fidelity by
March 31, 1997.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term. You also can help to manage some of the risks of investing
through diversification. A stock fund is already diversified because it
invests in many issues. You can diversify even further by placing some of
your money in several different types of stock funds or in other investment
categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price. If Fidelity had not
reimbursed certain fund expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Deutsche Mark Performance Portfolio, L.P. -4.91% 22.63% 72.30%
Deutsche Mark Performance Portfolio, L.P. -5.29% 22.14% 71.61%
(incl. maximum 0.4% sales charge)
German deutsche mark -6.71% -1.62% 19.29%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on November 16, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
German deutsche mark, whose returns reflect a hypothetical unmanaged
investment in the currency itself. The exchange rates used in calculating
these returns are based on the mean between the best available bid and
asked quotations at 4 p.m. Eastern time from a pool of 500 banking
institutions which actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Deutsche Mark Performance Portfolio, L.P. -4.91% 4.16% 7.93%
Deutsche Mark Performance Portfolio, L.P. -5.29% 4.08% 7.87%
(incl. maximum 0.4% sales charge)
German deutsche mark -6.71% -0.33% 2.50%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961231 19970114 163457 S00000000000001
Deutsche Mark Portfolio QT Deutsche Mark
00497 QT001
1989/11/16 9960.00 10000.00
1989/11/30 10308.60 10322.20
1989/12/31 10896.24 10877.85
1990/01/31 10995.84 10913.35
1990/02/28 10916.16 10772.70
1990/03/31 11075.52 10855.37
1990/04/30 11234.88 10949.09
1990/05/31 11175.12 10839.38
1990/06/30 11483.88 11073.04
1990/07/31 12081.48 11587.27
1990/08/31 12230.88 11668.15
1990/09/30 12370.32 11735.16
1990/10/31 12848.40 12111.57
1990/11/30 13097.40 12279.80
1990/12/31 13216.92 12330.85
1991/01/31 13446.00 12452.77
1991/02/28 13107.36 12058.36
1991/03/31 11802.60 10798.00
1991/04/30 11872.32 10775.86
1991/05/31 11683.08 10550.20
1991/06/30 11314.56 10154.06
1991/07/31 11832.48 10544.15
1991/08/31 11882.28 10526.04
1991/09/30 12539.64 11045.11
1991/10/31 12569.52 11000.18
1991/11/30 12987.84 11311.44
1991/12/31 13993.80 12125.95
1992/01/31 13266.72 11414.65
1992/02/29 13117.32 11219.65
1992/03/31 13187.04 11192.33
1992/04/30 13236.84 11158.37
1992/05/31 13645.20 11439.50
1992/06/30 14521.68 12083.72
1992/07/31 15079.44 12471.35
1992/08/31 15955.92 13111.59
1992/09/30 16025.64 12991.17
1992/10/31 14730.84 11920.78
1992/11/30 14342.40 11558.14
1992/12/31 14143.20 11347.73
1993/01/31 14302.56 11413.23
1993/02/28 14083.44 11178.72
1993/03/31 14501.76 11445.20
1993/04/30 14790.60 11601.89
1993/05/31 14830.44 11583.62
1993/06/30 13884.24 10785.34
1993/07/31 13675.08 10559.29
1993/08/31 14262.72 10969.34
1993/09/30 14691.00 11265.01
1993/10/31 14292.60 10907.53
1993/11/30 14103.36 10721.82
1993/12/31 13973.88 10579.33
1994/01/31 14053.56 10603.13
1994/02/28 14362.32 10790.40
1994/03/31 14681.04 10991.63
1994/04/30 14900.16 11117.90
1994/05/31 15009.72 11168.54
1994/06/30 15617.28 11583.62
1994/07/31 15696.96 11616.55
1994/08/31 15756.72 11627.57
1994/09/30 16105.32 11852.40
1994/10/31 16653.12 12228.35
1994/11/30 16015.68 11717.96
1994/12/31 16264.68 11867.70
1995/01/31 16573.44 11991.52
1995/02/28 17300.52 12566.80
1995/03/31 18475.80 13373.82
1995/04/30 18376.20 13259.07
1995/05/31 18047.52 12998.52
1995/06/30 18515.64 13310.89
1995/07/31 18505.68 13265.76
1995/08/31 17529.60 12526.57
1995/09/30 18077.40 12879.25
1995/10/31 18356.28 13053.88
1995/11/30 17908.08 12712.75
1995/12/31 18047.52 12787.90
1996/01/31 17469.84 12345.75
1996/02/29 17679.00 12471.35
1996/03/31 17679.00 12451.92
1996/04/30 17081.40 12005.22
1996/05/31 17210.88 12074.59
1996/06/30 17210.88 12062.32
1996/07/31 17838.36 12489.56
1996/08/31 17758.68 12418.71
1996/09/30 17270.64 12058.76
1996/10/31 17370.24 12114.36
1996/11/30 17171.04 11960.33
1996/12/31 17161.08 11929.29
IMATRL PRASUN SHR__CHT 19961231 19970114 163459 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Deutsche Mark Performance Portfolio, L.P. on November
16, 1989, when the fund started, and the current maximum 0.4% sales charge
was paid. As the chart shows, by December 31, 1996, the value of the
investment would have grown to $17,161 - a 71.61% increase on the initial
investment. For comparison, look at how the German deutsche mark did over
the same period. The same $10,000 investment would have grown to $11,929 -
a 19.29% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The value of
foreign currencies compared
to the value of the U.S. dollar
changes daily. Changes in
interest rates and political
events can both affect a
currency's value compared to
the dollar. In turn, the share
price and return of a fund that
invests in foreign currencies
will vary. That means if you
sell your shares during a
downturn, you might lose
money. But if you can ride out
short-term ups and downs, you
may have a gain.
(checkmark)
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price. If Fidelity had not
reimbursed certain fund expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Sterling Performance Portfolio, L.P. 15.35% 18.44% 77.30%
Sterling Performance Portfolio, L.P. 14.89% 17.96% 76.59%
(incl. maximum 0.4% sales charge)
British Pound Sterling 10.45% -8.27% 8.43%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on November 16, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
British Pound Sterling, whose returns reflect a hypothetical unmanaged
investment in the currency itself. The exchange rates used in calculating
these returns are based on the mean between the best available bid and
asked quotations at 4 p.m. Eastern time from a pool of 500 banking
institutions which actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Sterling Performance Portfolio, L.P. 15.35% 3.44% 8.36%
Sterling Performance Portfolio, L.P. 14.89% 3.36% 8.30%
(incl. maximum 0.4% sales charge)
British Pound Sterling 10.45% -1.71% 1.14%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961231 19970114 163854 S00000000000001
Sterling Portfolio QT British Pound Sterling
00498 QT002
1989/11/16 9960.00 10000.00
1989/11/30 9930.12 9938.77
1989/12/31 10278.72 10201.45
1990/01/31 10806.60 10627.94
1990/02/28 10896.24 10611.90
1990/03/31 10826.52 10416.32
1990/04/30 10906.20 10377.05
1990/05/31 11284.68 10624.37
1990/06/30 11882.28 11070.30
1990/07/31 12798.60 11796.50
1990/08/31 13087.44 11965.97
1990/09/30 13157.16 11876.17
1990/10/31 13804.56 12298.43
1990/11/30 13963.92 12305.60
1990/12/31 14033.64 12238.98
1991/01/31 14392.20 12448.38
1991/02/28 14143.20 12103.25
1991/03/31 13007.76 11018.28
1991/04/30 13077.48 10961.04
1991/05/31 12918.12 10741.56
1991/06/30 12420.12 10264.31
1991/07/31 13017.72 10669.14
1991/08/31 13077.48 10640.44
1991/09/30 13714.92 11076.12
1991/10/31 13734.84 11010.61
1991/11/30 14033.64 11191.65
1991/12/31 14910.12 11820.73
1992/01/31 14392.20 11311.65
1992/02/29 14252.76 11128.69
1992/03/31 14163.12 10985.77
1992/04/30 14621.28 11255.33
1992/05/31 15129.24 11572.21
1992/06/30 15876.24 12064.04
1992/07/31 16145.16 12198.88
1992/08/31 16752.72 12584.49
1992/09/30 15358.32 11307.61
1992/10/31 13426.08 9855.21
1992/11/30 13147.20 9599.64
1992/12/31 13107.36 9561.93
1993/01/31 13027.68 9409.84
1993/02/28 12499.80 9017.09
1993/03/31 13346.40 9593.82
1993/04/30 13894.20 9959.09
1993/05/31 13834.44 9884.45
1993/06/30 13266.72 9444.94
1993/07/31 13236.84 9390.30
1993/08/31 13336.44 9437.90
1993/09/30 13446.00 9478.89
1993/10/31 13356.36 9377.78
1993/11/30 13455.96 9407.04
1993/12/31 13406.16 9350.07
1994/01/31 13704.96 9531.70
1994/02/28 13565.52 9405.65
1994/03/31 13585.44 9390.30
1994/04/30 13944.00 9605.46
1994/05/31 13914.12 9561.93
1994/06/30 14262.72 9773.04
1994/07/31 14292.60 9773.04
1994/08/31 14252.76 9713.06
1994/09/30 14681.04 9977.93
1994/10/31 15278.64 10356.68
1994/11/30 14681.04 9910.76
1994/12/31 14730.84 9915.41
1995/01/31 14910.12 9924.74
1995/02/28 14989.80 10017.41
1995/03/31 15428.04 10269.31
1995/04/30 15418.08 10204.74
1995/05/31 15208.92 10050.81
1995/06/30 15328.44 10092.47
1995/07/31 15408.12 10098.92
1995/08/31 15039.60 9810.91
1995/09/30 15418.08 10020.58
1995/10/31 15467.88 10004.74
1995/11/30 15069.48 9699.66
1995/12/31 15308.52 9817.00
1996/01/31 14999.76 9573.50
1996/02/29 15238.80 9693.72
1996/03/31 15258.72 9662.65
1996/04/30 15119.28 9541.21
1996/05/31 15617.28 9819.72
1996/06/30 15687.00 9826.37
1996/07/31 15776.64 9849.79
1996/08/31 15886.20 9885.25
1996/09/30 15975.84 9906.44
1996/10/31 16643.16 10298.91
1996/11/30 17260.68 10643.90
1996/12/31 17659.08 10843.29
IMATRL PRASUN SHR__CHT 19961231 19970114 163856 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Sterling Performance Portfolio, L.P. on November 16,
1989, when the fund started, and the current maximum 0.4% sales charge was
paid. As the chart shows, by December 31, 1996, the value of the investment
would have grown to $17,659 - a 76.59% increase on the initial investment.
For comparison, look at how the British pound sterling did over the same
period. The same $10,000 investment would have grown to $10,843 - an 8.43%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The value of foreign
currencies compared to the
value of the U.S. dollar
changes daily. Changes in
interest rates and political
events can both affect a
currency's value compared to
the dollar. In turn, the share
price and return of a fund that
invests in foreign currencies
will vary. That means if you sell
your shares during a downturn,
you might lose money. But if
you can ride out short-term
ups and downs, you may have
a gain.
(checkmark)
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. A fund's total
return includes changes in a fund's share price. If Fidelity had not
reimbursed certain fund expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Yen Performance Portfolio, L.P. -11.70% 11.10% 44.10%
Yen Performance Portfolio, L.P. -12.06% 10.66% 43.52%
(incl. maximum 0.4% sales charge)
Japanese Yen -10.82% 7.67% 24.00%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on November 16, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Japanese yen, whose returns reflect a hypothetical unmanaged investment in
the currency itself. The exchange rates used in calculating these returns
are based on the mean between the best available bid and asked quotations
at 4 p.m. Eastern time from a pool of 500 banking institutions which
actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Yen Performance Portfolio, L.P. -11.70% 2.13% 5.26%
Yen Performance Portfolio, L.P. -12.06% 2.05% 5.20%
(incl. maximum 0.4% sales charge)
Japanese Yen -10.82% 1.49% 3.06%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961231 19970114 164014 S00000000000001
Yen Portfolio QT Japanese Yen
00499 QT003
1989/11/16 9960.00 10000.00
1989/11/30 10049.64 10066.51
1989/12/31 10019.76 9991.66
1990/01/31 10029.72 9954.31
1990/02/28 9760.80 9639.96
1990/03/31 9232.92 9079.89
1990/04/30 9252.84 9048.46
1990/05/31 9701.04 9452.99
1990/06/30 9750.84 9452.99
1990/07/31 10209.00 9858.75
1990/08/31 10398.24 9998.61
1990/09/30 10846.44 10381.23
1990/10/31 11593.44 11051.50
1990/11/30 11463.96 10851.32
1990/12/31 11234.88 10618.91
1991/01/31 11653.20 10952.16
1991/02/28 11543.64 10808.09
1991/03/31 10936.08 10182.72
1991/04/30 11414.16 10560.41
1991/05/31 11284.68 10393.99
1991/06/30 11404.20 10458.25
1991/07/31 11473.92 10464.34
1991/08/31 11583.48 10507.93
1991/09/30 11981.88 10814.59
1991/10/31 12230.88 10996.56
1991/11/30 12370.32 11058.30
1991/12/31 12918.12 11517.14
1992/01/31 12878.28 11431.07
1992/02/29 12529.68 11100.13
1992/03/31 12270.72 10830.89
1992/04/30 12260.76 10790.24
1992/05/31 12778.68 11259.20
1992/06/30 13017.72 11447.45
1992/07/31 12878.28 11312.35
1992/08/31 13336.44 11684.68
1992/09/30 13724.88 11995.66
1992/10/31 13366.32 11653.43
1992/11/30 13246.80 11527.30
1992/12/31 13236.84 11516.22
1993/01/31 13266.72 11534.70
1993/02/28 13973.88 12164.13
1993/03/31 14422.08 12529.85
1993/04/30 14920.08 12941.49
1993/05/31 15477.84 13431.11
1993/06/30 15547.56 13443.67
1993/07/31 15906.12 13739.13
1993/08/31 15916.08 13728.64
1993/09/30 15726.84 13541.16
1993/10/31 15398.16 13245.51
1993/11/30 15348.36 13182.36
1993/12/31 14969.88 12857.02
1994/01/31 15398.16 13227.23
1994/02/28 16005.72 13747.01
1994/03/31 16314.48 14006.82
1994/04/30 16503.72 14161.33
1994/05/31 16015.68 13718.16
1994/06/30 17041.56 14589.55
1994/07/31 16802.52 14392.39
1994/08/31 16752.72 14349.30
1994/09/30 16941.96 14501.26
1994/10/31 17340.36 14836.45
1994/11/30 17011.68 14537.92
1994/12/31 16862.28 14414.04
1995/01/31 16882.20 14589.55
1995/02/28 17400.12 14859.45
1995/03/31 19471.80 16227.99
1995/04/30 20019.60 17076.01
1995/05/31 19920.00 17011.36
1995/06/30 19870.20 16985.23
1995/07/31 19003.68 16270.23
1995/08/31 17240.76 14754.23
1995/09/30 16892.16 14416.93
1995/10/31 16503.72 14087.79
1995/11/30 16493.76 14085.03
1995/12/31 16254.72 13905.22
1996/01/31 15696.96 13424.84
1996/02/29 15965.88 13658.21
1996/03/31 15677.04 13402.31
1996/04/30 15945.96 13673.15
1996/05/31 15497.76 13297.57
1996/06/30 15268.68 13106.06
1996/07/31 15657.12 13459.40
1996/08/31 15338.40 13205.97
1996/09/30 14979.84 12910.70
1996/10/31 14621.28 12609.52
1996/11/30 14651.16 12651.12
1996/12/31 14352.36 12400.17
IMATRL PRASUN SHR__CHT 19961231 19970114 164017 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Yen Performance Portfolio, L.P. on November 16, 1989,
when the fund started, and the current maximum 0.4% sales charge was paid.
As the chart shows, by December 31, 1996, the value of the investment would
have grown to $14,352 - a 43.52% increase on the initial investment. For
comparison, look at how the Japanese yen did over the same period. The same
$10,000 investment would have grown to $12,400 - a 24.00% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The value of foreign
currencies compared to the
value of the U.S. dollar
changes daily. Changes in
interest rates and political
events can both affect a
currency's value compared to
the dollar. In turn, the share
price and return of a fund that
invests in foreign currencies
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out short-term ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jacques Perold, Portfolio Manager of Fidelity Foreign
Currency Funds
Q. HOW DID THE FUND PERFORM, JACQUES?
A. For the year ended December 31, 1996, the Deutsche Mark fund returned
- -4.91%, compared to a 6.71% decrease in the value of the mark relative to
the U.S. dollar; the Sterling fund rose 15.35% compared to a 10.45%
increase in the pound; and the yen fund fell 11.70%, compared to a 10.82%
decrease in the Yen.
Q. LET'S START WITH THE POUND, WHICH CONTINUED TO STRENGTHEN DURING THE
PERIOD . . .
A. There are three main reasons for the continued strength of the British
pound. The first is that the British pound has been undervalued relative to
other European currencies. As a result, U.K. manufacturers were more
competitive as their exports were cheaper to foreign buyers. This led to an
economic recovery in the U.K. The second reason for the sterling's
strength was that, in response to the strength of the economy, the Bank of
England has been keeping interest rates firm. Money has been flowing into
Great Britain because U.K. interest rates look attractive relative to those
in other European countries. The final reason for continued pound strength
involves the movement to create a single European currency. The U.K. may or
may not participate in the single currency when it is introduced in 1999.
By remaining uncommitted, Great Britain will have the benefit of
participating in the single currency if it is successful without suffering
any losses if the process is unsuccessful.
Q. THE YEN CONTINUES TO DECLINE IN VALUE. WHAT'S THE STORY THERE?
A. The weakening yen follows an economy experiencing minimal growth and
very low interest rates. Official efforts to stimulate the economy out of a
recession through accommodative monetary and fiscal policy have not been
completely successful. While there have been flickering signs of an
improving economy in Japan, there has been very little actual evidence of
improvement.
Q. ARE THERE OTHER SPECIFIC FACTORS THAT HAVE HURT THE YEN?
A. Yes. The continuing efforts to improve the trade balance between the
U.S. and Japan have continued to weigh on the yen. Japan has made an effort
to open its economy and has moved some of its manufacturing abroad, which
has put it in a position of importing goods it has produced. In addition,
the low growth economy and poorly performing equity market have not acted
in a manner conducive to attracting foreign investors - a theme that
doesn't help the economy. If the Japanese currency continues to decline
further, foreign investors will want to leave Japanese markets, not only
because of the poor performance of the stock market, but also because of
the additional losses suffered from currency translation.
Q. WHAT ABOUT THE DEUTSCHE MARK?
A. The German currency continues to weaken versus the U.S. dollar. In
Germany, unemployment is high, while interest rates are low and have the
potential to go lower. Conversely, in the U.S., interest rates have
remained steady, with the risk of moving higher. Germany has found itself
in a position in which it has to keep its strict fiscal policy in check in
order to qualify to participate in the single currency of the European
Union. Therefore, there is an incentive to keep the Deutsche mark low in
order to keep export growth positive. For these reasons, the mark has
continued its decline against the U.S. dollar.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. It depends on which currency. I think the British pound is likely to
continue to strengthen against other European currencies, but won't
significantly appreciate against the U.S. dollar. As for the yen, officials
have suggested that any further significant decline could be detrimental to
the Japanese economy, so I think it will remain within its trading range.
While it may weaken, I don't think it will be excessively weak. As for the
mark, I think the German government has an incentive to keep it at current
levels, if not somewhat weaker.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to approximate the
performance of each
currency relative to the U.S.
dollar while earning a
reasonable level of current
income
FUND NUMBERS: Deutsche
Mark Portfolio, 497; Sterling
Portfolio, 498; Yen Portfolio,
499
START DATE: November 16, 1989
SIZE: as of December 31,
1996, more than $6.0 million
in the Fidelity Deutsche
Mark; more than $1.5 million
in the Fidelity Sterling; more
than $2.4 million in the
Fidelity Yen performance
portfolios
MANAGER: Jacques Perold,
since October 1995; joined
Fidelity in 1986
(checkmark)
JACQUES PEROLD ON CURRENT
THEMES IN CURRENCIES:
"There's a plan in the works
for a number of European
countries to closely align their
economic and political
interests by the end of the
century. In the past year,
interest rates have converged
dramatically among countries
that are expected to
participate in the first round of
this European Union. To
qualify, countries have to keep
their currencies stable and
meet a variety of economic
criteria, including converging
inflation levels and stringent
fiscal controls.
"The belief is that a unified
European economy expands
the market for each country's
goods and lowers the overall
costs for doing business within
Europe. This would improve
business prospects for
European countries and would
be a positive for strong
companies of varying sizes in
many industries across
Europe."
NOTE TO SHAREHOLDERS:
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.
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996
ASSETS
Investment in repurchase agreements in a joint $ 6,182,000
trading account
Cash 534
Unrealized appreciation on foreign currency contracts 174
Receivable for fund shares sold 1,007
Receivable from investment adviser for expense 6,070
reductions
TOTAL ASSETS 6,189,785
LIABILITIES
Unrealized depreciation on foreign currency contracts $ 22,640
Payable for closed foreign currency contracts 5,872
Payable for fund shares redeemed 122,181
Accrued management fee 2,598
Other payables and accrued expenses 25,942
TOTAL LIABILITIES 179,233
NET ASSETS $ 6,010,552
Net Assets consist of:
Paid in capital $ 784,759
Undistributed net investment income 2,822,628
Accumulated undistributed net realized gain (loss) on 2,425,631
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and (22,466)
liabilities in foreign currencies
NET ASSETS, for 348,909 shares outstanding $ 6,010,552
SHARES OUTSTANDING HELD BY: 10,070
General Partners
Limited Partners 338,839
TOTAL SHARES OUTSTANDING 348,909
NET ASSET VALUE and redemption price per share $17.23
($6,010,552 (divided by) 348,909 shares)
Maximum offering price per share (100/99.60 of $17.23) $17.30
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME $ 419,137
Interest
EXPENSES
Management fee $ 37,870
Transfer agent fees 27,767
Accounting fees and expenses 60,000
Non-interested managing partners' compensation 34
Custodian fees and expenses 14,409
Registration fees 19,252
Audit 22,822
Legal 1,497
Miscellaneous 422
Total expenses before reductions 184,073
Expense reductions (70,869) 113,204
NET INVESTMENT INCOME 305,933
REALIZED AND UNREALIZED GAIN (LOSS) (822,811)
Net realized gain (loss) on foreign currency transactions
Change in net unrealized appreciation (depreciation) on (1,451)
assets and liabilities in foreign currencies
NET GAIN (LOSS) (824,262)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (518,329)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 305,933 $ 589,199
Net investment income
Net realized gain (loss) (822,811) 503,286
Change in net unrealized appreciation (depreciation) (1,451) (37,977)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (518,329) 1,054,508
FROM OPERATIONS
Share transactions 2,518,039 28,567,208
Net proceeds from sales of shares
Cost of shares redeemed (7,520,631) (26,607,731)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (5,002,592) 1,959,477
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,520,921) 3,013,985
NET ASSETS
Beginning of period 11,531,473 8,517,488
End of period (including undistributed net investment $ 6,010,552 $ 11,531,473
income of $2,822,628 and $2,516,695, respectively)
OTHER INFORMATION
Shares
Sold 142,827 1,581,160
Redeemed (430,164) (1,466,474)
Net increase (decrease) (287,337) 114,686
</TABLE>
FINANCIAL HIGHLIGHTS - DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 18.12 $ 16.33 $ 14.03 $ 14.20 $ 14.05
of period
Income from Investment
Operations
Net investment income .71 C .78 C .43 C .23 C .34 C
Net realized and unrealized (1.60) 1.01 1.87 (.40) (.19)
gain (loss)
Total from investment (.89) 1.79 2.30 (.17) .15
operations
Net asset value, end $ 17.23 $ 18.12 $ 16.33 $ 14.03 $ 14.20
of period
TOTAL RETURN A, B (4.91)% 10.96% 16.39% (1.20)% 1.07%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 6,011 $ 11,531 $ 8,517 $ 5,777 $ 9,007
(000 omitted)
Ratio of expenses to average 1.50% 1.50% 1.50% 1.50% 1.29%
net assets D D D D
Ratio of net investment income 4.04% 4.31% 2.81% 1.62% 2.38%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996
ASSETS
Investment in repurchase agreements in a joint $ 1,501,000
trading account
Cash 500
Unrealized appreciation on foreign currency contracts 32,261
Receivable for fund shares sold 2,389
Receivable from investment adviser for expense 15,486
reductions
TOTAL ASSETS 1,551,636
LIABILITIES
Payable for closed foreign currency contracts $ 9,204
Payable for fund shares redeemed 5,610
Accrued management fee 619
Other payables and accrued expenses 24,738
TOTAL LIABILITIES 40,171
NET ASSETS $ 1,511,465
Net Assets consist of:
Undistributed net investment income $ 935,473
Accumulated undistributed net realized gain (loss) on 895,812
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and 32,261
liabilities in foreign currencies
Excess of amounts paid on value of shares redeemed (352,081)
over paid in capital
NET ASSETS, for 85,260 shares outstanding $ 1,511,465
SHARES OUTSTANDING HELD BY: 10,076
General Partners
Limited Partners 75,184
TOTAL SHARES OUTSTANDING 85,260
NET ASSET VALUE and redemption price per share $17.73
($1,511,465 (divided by) 85,260 shares)
Maximum offering price per share (100/99.60 of $17.73) $17.80
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME $ 60,771
Interest
EXPENSES
Management fee $ 5,614
Transfer agent fees 3,914
Accounting fees and expenses 60,000
Non-interested managing partners' compensation 52
Custodian fees and expenses 15,192
Registration fees 18,785
Audit 18,427
Legal 1,524
Miscellaneous 151
Total expenses before reductions 123,659
Expense reductions (106,850) 16,809
NET INVESTMENT INCOME 43,962
REALIZED AND UNREALIZED GAIN (LOSS) 108,201
Net realized gain (loss) on foreign currency transactions
Change in net unrealized appreciation (depreciation) on 21,308
assets and liabilities in foreign currencies
NET GAIN (LOSS) 129,509
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 173,471
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 43,962 $ 83,737
Net investment income
Net realized gain (loss) 108,201 26,105
Change in net unrealized appreciation (depreciation) 21,308 21,240
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 173,471 131,082
FROM OPERATIONS
Share transactions 1,324,227 1,792,743
Net proceeds from sales of shares
Cost of shares redeemed (1,007,267) (4,246,010)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 316,960 (2,453,267)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 490,431 (2,322,185)
NET ASSETS
Beginning of period 1,021,034 3,343,219
End of period (including undistributed net investment $ 1,511,465 $ 1,021,034
income of $935,473 and $891,511, respectively)
OTHER INFORMATION
Shares
Sold 80,238 117,685
Redeemed (61,425) (277,244)
Net increase (decrease) 18,813 (159,559)
</TABLE>
FINANCIAL HIGHLIGHTS - STERLING PERFORMANCE PORTFOLIO, L.P.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 15.37 $ 14.79 $ 13.46 $ 13.16 $ 14.97
of period
Income from Investment
Operations
Net investment income .62 C .68 C .38 C .22 C .34 C
Net realized and 1.74 (.10) E .95 .08 (2.15)
unrealized gain (loss)
Total from investment 2.36 .58 1.33 .30 (1.81)
operations
Net asset value, end $ 17.73 $ 15.37 $ 14.79 $ 13.46 $ 13.16
of period
TOTAL RETURN A, B 15.35% 3.92% 9.88% 2.28% (12.09)%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 1,511 $ 1,021 $ 3,343 $ 3,684 $ 1,715
(000 omitted)
Ratio of expenses to average 1.50% 1.50% 1.50% 1.50% 1.50%
net assets D D D D D
Ratio of net investment income 3.92% 4.44% 2.69% 1.61% 2.27%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
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.
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996
ASSETS
Investment in repurchase agreements in a joint $ 2,547,000
trading account
Cash 147
Unrealized appreciation on foreign currency contracts 229
Receivable for fund shares sold 37,784
Receivable from investment adviser for expense 7,464
reductions
TOTAL ASSETS 2,592,624
LIABILITIES
Unrealized depreciation on foreign currency contracts $ 54,570
Payable for closed foreign currency contracts 988
Payable for fund shares redeemed 42,998
Accrued management fee 1,071
Other payables and accrued expenses 25,283
TOTAL LIABILITIES 124,910
NET ASSETS $ 2,467,714
Net Assets consist of:
Paid in capital $ 564,868
Undistributed net investment income 983,267
Accumulated undistributed net realized gain (loss) on 973,920
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and (54,341)
liabilities in foreign currencies
NET ASSETS, for 171,210 shares outstanding $ 2,467,714
SHARES OUTSTANDING HELD BY: 10,068
General Partners
Limited Partners 161,142
TOTAL SHARES OUTSTANDING 171,210
NET ASSET VALUE and redemption price per share $14.41
($2,467,714 (divided by) 171,210 shares)
Maximum offering price per share (100/99.60 of $14.41) $14.47
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME $ 149,903
Interest
EXPENSES
Management fee $ 13,406
Transfer agent fees 10,688
Accounting fees and expenses 60,000
Non-interested managing partners' compensation 12
Custodian fees and expenses 15,099
Registration fees 19,850
Audit 19,681
Legal 1,533
Miscellaneous 211
Total expenses before reductions 140,480
Expense reductions (100,296) 40,184
NET INVESTMENT INCOME 109,719
REALIZED AND UNREALIZED GAIN (LOSS) (476,220)
Net realized gain (loss) on foreign currency transactions
Change in net unrealized appreciation (depreciation) on 4,970
assets and liabilities in foreign currencies
NET GAIN (LOSS) (471,250)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (361,531)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 109,719 $ 224,380
Net investment income
Net realized gain (loss) (476,220) (115,000)
Change in net unrealized appreciation (depreciation) 4,970 (377)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (361,531) 109,003
FROM OPERATIONS
Share transactions 4,687,166 15,772,636
Net proceeds from sales of shares
Cost of shares redeemed (4,751,388) (16,492,788)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (64,222) (720,152)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (425,753) (611,149)
NET ASSETS
Beginning of period 2,893,467 3,504,616
End of period (including undistributed net investment $ 2,467,714 $ 2,893,467
income of $983,267 and $873,548, respectively)
OTHER INFORMATION
Shares
Sold 301,567 823,652
Redeemed (307,617) (853,436)
Net increase (decrease) (6,050) (29,784)
</TABLE>
FINANCIAL HIGHLIGHTS - YEN PERFORMANCE PORTFOLIO, L.P.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 16.32 $ 16.93 $ 15.03 $ 13.29 $ 12.97
of period
Income from Investment
Operations
Net investment income .63 C .82 C .47 C .24 C .28 C
Net realized and (2.54) (1.43) 1.43 1.50 .04
unrealized gain (loss)
Total from (1.91) (.61) 1.90 1.74 .32
investment operations
Net asset value, end $ 14.41 $ 16.32 $ 16.93 $ 15.03 $ 13.29
of period
TOTAL RETURN A, B (11.70)% (3.60)% 12.64% 13.09% 2.47%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 2,468 $ 2,893 $ 3,505 $ 2,253 $ 3,801
(000 omitted)
Ratio of expenses to average 1.50% 1.50% 1.50% 1.50% 1.50%
net assets D D D D D
Ratio of net investment income 4.09% 4.38% 2.86% 1.56% 2.13%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Deutsche Mark Performance Portfolio, L.P., Fidelity Sterling
Performance Portfolio, L.P. and Fidelity Yen Performance Portfolio, L.P.,
(the funds) are registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as open-end management investment companies
organized as limited partnerships in the State of Delaware. Each fund is
authorized to issue an unlimited number of limited partnership shares.
Fidelity Management & Research Company (FMR), a wholly owned subsidiary of
FMR Corp., is each fund's Non-Managing General Partner and investment
adviser. Each fund has twelve Managing General Partners who supervise the
management and operations of the fund. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the funds:
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains
and losses from sales and maturities of forward currency contracts and
disposition of foreign currencies.
INCOME TAXES. As limited partnerships, the funds are not subject to income
taxes. Instead, each partner is allocated a proportionate share of taxable
income.
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.
INTEREST INCOME. Interest income is accrued as earned.
DISTRIBUTIONS AND ALLOCATIONS. The funds do not intend to make cash
distributions. Net interest income, realized gains and losses, and other
deductions and credits of each fund are allocated daily to the outstanding
shares of each fund. The amounts allocated are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions.
INVESTMENT TRANSACTIONS. Investment transactions are accounted for as of
trade date.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The funds use forward contracts to
acquire exposure to foreign currencies. These contracts involve market risk
in excess of the unrealized gain or loss reflected in each fund's Statement
of Assets and Liabilities. The U.S. dollar value of the currencies each
fund has committed to buy is shown in Note 7 under the caption "Forward
Foreign Currency Contracts." This amount represents the aggregate exposure
each fund has acquired through currency contracts at period end. Losses may
arise due to changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days
or less from the date of purchase for U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the funds'
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. JOINT TRADING ACCOUNT.
Each fund may use a joint trading account for the purpose of investing in
repurchase agreements. These repurchase agreements were with entities whose
creditworthiness has been reviewed and found satisfactory by FMR. The
maturity values of the joint trading account investments were $6,184,318
for Fidelity Deutsche Mark Performance Portfolio, L.P., $1,501,563 for
Fidelity Sterling Performance Portfolio, L.P. and $2,547,955 for Fidelity
Yen Performance Portfolio, L.P., all at 6.75 %. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING
DATED DECEMBER 31, 1996, DUE JANUARY 2, 1997
Number of dealers or banks 20
Maximum amount with one dealer or bank 17.6%
Aggregate principal amount of agreements $19,054,743,000
Aggregate maturity amount of agreements $19,061,891,381
Aggregate market value of transferred assets $19,440,451,571
Coupon rates of transferred assets 0.0% to 15 3/4%
Maturity dates of transferred assets 1/15/97 to 11/15/26
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .50% of the fund's average net
assets.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $8,037, $4,608 and $13,778 for the Deutsche Mark, Sterling and
Yen Performance Portfolios, respectively, on sales of shares of each fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the funds' transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .37%,
.35% and .40% of the average net assets of Deutsche Mark, Sterling and Yen
Performance Portfolios, respectively.
ACCOUNTING FEES. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of 1.50% of average net assets. For the
period, the reimbursement reduced the funds' expenses by $70,850, $106,833
and $100,277 for the Deutsche Mark, Sterling and Yen Performance
Portfolios, respectively.
In addition, each fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of each fund's expenses. During the period, the custodian fees were
reduced by $19, $17 and $19 for the Deutsche Mark, Sterling and Yen
Performance Portfolios, respectively, under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of more
than 5% of the outstanding shares of the following funds:
BENEFICIAL INTEREST
FUND % OWNERSHIP
Sterling Performance
Portfolio, L.P. 12
Yen Performance
Portfolio, L.P. 6
7. COMMITMENTS.
At period end, each fund had various contracts open which obligate the
funds to receive currencies at specified future dates. Open contracts were
as follows:
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE VALUE GAIN/(LOSS)
CONTRACTS TO BUY
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
9,160,381 DEM 3/3/97 $ 5,966,457 $ (22,466)
(Payable amount $5,988,923)
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
871,900 GBP 3/3/97 $ 1,491,353 $ 32,261
(Payable amount $1,459,092)
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
281,839,931 JPY 3/3/97 $ 2,451,841 $ (54,341)
(Payable amount $2,506,182)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Fidelity Deutsche Mark Performance Portfolio, L.P.,
Fidelity Sterling Performance Portfolio, L.P. and Fidelity Yen Performance
Portfolio, L.P.:
We have audited the accompanying statements of assets and liabilities of
Fidelity Deutsche Mark Performance Portfolio, L.P., Fidelity Sterling
Performance Portfolio, L.P. and Fidelity Yen Performance Portfolio, L.P. as
of December 31, 1996, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of each fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Deutsche Mark Performance Portfolio, L.P., Fidelity Sterling
Performance Portfolio, L.P. and Fidelity Yen Performance Portfolio, L.P.,
as of December 31, 1996, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with generally accepted accounting
principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 25, 1997
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management &
Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Fred L. Henning, Jr., VICE PRESIDENT
Jacques Perold, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Kenneth A. Rathgeber, TREASURER
Robert H. Morrison, MANAGER,
SECURITY TRANSACTIONS
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
MANAGING GENERAL PARTNERS
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
NON-MANAGING GENERAL PARTNER
Fidelity Management &
Research Company
Boston, MA
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S FOREIGN CURRENCY FUNDS
Fidelity Yen Performance
Portfolio, L.P.
Fidelity Sterling Performance
Portfolio, L.P.
Fidelity Deutsche Mark Performance
Portfolio, L.P.
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
