(2_FIDELITY_LOGOS)FIDELITY
FOREIGN CURRENCY
FUNDS
SEMIANNUAL REPORT
JUNE 30, 1997
CONTENTS
NOTE TO SHAREHOLDERS 3
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.
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 each 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, 1998.
NOTE TO SHAREHOLDERS
Since the commencement of their operations in November 1989, the three
Fidelity currency funds have been operating under a "grandfathering"
provision of the Internal Revenue Code allowing them to operate as publicly
traded partnerships. The funds were organized this way because of tax
restrictions that apply to other kinds of mutual funds.
This special provision expires at the end of 1997 - unless each fund elects
to be subject to a tax equal to 3.5% of that fund's gross income. If the
funds were to reorganize into a different tax form to avoid this tax, the
resulting tax restrictions would make it difficult for the funds to
continue to pursue their investment objectives.
On May 15, 1997, the Managing General Partners of Fidelity's foreign
currency funds authorized the liquidation of the funds. The anticipated
liquidation date is December 15, 1997, and to facilitate the liquidation,
the funds were closed to new accounts and to deposits or transfers into
existing accounts on June 1, 1997.
We regret that the changing tax status of publicly traded partnerships
makes liquidation of the funds necessary. Other investment companies have
already taken similar actions, as all competing foreign currency funds have
either been liquidated or been merged into globally diversified products.
Prior to the anticipated liquidation date of December 15, 1997, Fidelity is
offering a load-free transfer into any other Fidelity fund of your choice.
If you do not give us instructions for transferring your investment to
another Fidelity fund prior to liquidation, it will be necessary to mail
you a check for your liquidation proceeds, and you will lose the benefit of
the load waiver. We encourage you to contact us to arrange a transfer prior
to the liquidation date.
To arrange a load-free transfer to another Fidelity fund, or to discuss
your options further, please call a Fidelity representative at
1-800-544-6666.
Please keep in mind that, in general, liquidation or transfer of your
investment in the foreign currency funds will be treated as a taxable event
for federal income tax purposes. Please consult your tax advisor for
further information.
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Deutsche Mark Performance Portfolio, L.P. -10.85% -11.11% 5.35% 53.60%
Deutsche Mark Performance Portfolio, L.P. -11.21% -11.47% 4.93% 52.99%
(incl. maximum 0.4% sales charge)
German Deutsche Mark -11.69% -12.66% -12.82% 5.35%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on November 16, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the 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 4:00 p.m. Eastern time from a
pool of 500 banking institutions which actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Deutsche Mark Performance Portfolio, L.P. -11.11% 1.05% 5.79%
Deutsche Mark Performance Portfolio, L.P. -11.47% 0.97% 5.73%
(incl. maximum 0.4% sales charge)
German Deutsche Mark -12.66% -2.71% 0.69%
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
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
1997/01/31 16175.04 11223.07
1997/02/28 15726.84 10890.73
1997/03/31 15886.20 10978.84
1997/04/30 15388.20 10623.03
1997/05/31 15627.24 10778.07
1997/06/30 15298.56 10535.09
$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 June 30, 1997, the value of the investment
would have grown to $15,299 - a 52.99% 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 $10,535 - a 5.35%
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 JUNE 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Sterling Performance Portfolio, L.P. -0.73% 11.75% 10.41% 76.00%
Sterling Performance Portfolio, L.P. -1.13% 11.30% 9.97% 75.30%
(incl. maximum 0.4% sales
charge)
British Pound Sterling -2.82% 7.24% -12.65% 5.38%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on November 16, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the 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 4:00 p.m. Eastern time from a
pool of 500 banking institutions which actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Sterling Performance Portfolio, L.P. 11.75% 2.00% 7.69%
Sterling Performance Portfolio, L.P. 11.30% 1.92% 7.64%
(incl. maximum 0.4% sales charge)
British Pound Sterling 7.24% -2.67% 0.69%
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
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
1997/01/31 16583.40 10140.66
1997/02/28 16932.00 10314.74
1997/03/31 17101.32 10378.04
1997/04/30 16981.80 10276.76
1997/05/31 17220.84 10384.05
1997/06/30 17529.60 10537.55
$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 June 30, 1997, the value of the investment
would have grown to $17,530 - a 75.30% 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 $10,538 - a 5.38%
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 JUNE 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Yen Performance Portfolio, L.P. 0.69% -5.35% 11.02% 45.10%
Yen Performance Portfolio, L.P. 0.29% -5.73% 10.57% 44.52%
(incl. maximum 0.4% sales
charge)
Japanese Yen 1.14% -4.31% 9.56% 25.41%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on November 16, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the 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 4:00 p.m. Eastern time from a pool of 500
banking institutions which actively trade in this currency.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Yen Performance Portfolio, L.P. -5.35% 2.11% 5.00%
Yen Performance Portfolio, L.P. -5.73% 2.03% 4.95%
(incl. maximum 0.4% sales charge)
Japanese Yen -4.31% 1.84% 3.01%
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
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
1997/01/31 13704.96 11840.57
1997/02/28 13834.44 11959.24
1997/03/31 13436.04 11615.77
1997/04/30 13087.44 11317.25
1997/05/31 14272.68 12365.51
1997/06/30 14451.96 12541.32
$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 June 30, 1997, the value of the investment would
have grown to $14,452 - a 44.52% 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 $12,541 - a 25.41% 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 FUNDS PERFORM, JACQUES?
A. For the six months that ended June 30, 1997, the Deutsche Mark Fund
returned -10.85%, compared to an 11.69% decrease in the value of the mark
relative to the U.S. dollar; the Sterling Fund returned -0.73%, compared to
a 2.82% decrease in the pound; and the Yen Fund returned 0.69%, compared to
a 1.14% increase in the yen. For the 12 months that ended June 30, 1997,
the Deutsche Mark Fund returned -11.11%, compared to a 12.66% decrease in
the value of the mark relative to the U.S. dollar; the Sterling Fund
returned 11.75%, compared to a 7.24% increase in the pound; and the Yen
Fund returned -5.35%, compared to a 4.31% decrease in the yen.
Q. THE DEUTSCHE MARK WEAKENED QUITE A BIT OVER THE PERIOD. WHAT SPECIFIC
FACTORS HURT THAT CURRENCY?
A. Over the last six months, the Deutsche mark's weakness can be attributed
to two primary themes: market perception that the mark will be replaced by
a "weak" single European currency and continued weakness in the German
economy. Questions about the benchmarks for entry into the European
Monetary Union keep popping up, such as how Germany will reach the criteria
of 3% deficit to GDP. At the end of the period, Germany was somewhere
around 3.4% deficit to GDP. Either the criteria will be eased to launch the
start of the Euro or the German government would have to raise taxes or cut
back on spending. Tightening fiscal policy would hurt its economy even more
and continue to put pressure on the mark. In addition, the German economy
continues to be plagued by high unemployment and low domestic demand, which
also pressured the mark during the period.
Q. WHAT HAPPENED WITH THE YEN OVER THE PERIOD?
A. The value of the yen relative to the U.S. dollar at the end of the
period was basically flat with what it was at the beginning of the period.
However, that's not the full story since the currency experienced a great
deal of volatility during the six months. The yen, which started 1997 at
about 117 to the U.S. dollar, weakened to a level of about 127 in late
April and early May. The currency experienced a sharp reversal in mid-May,
when it quickly strengthened to about 112. This happened when the Japanese
government expressed a great deal of discomfort about the yen's weakening
and the widening of the U.S.-Japan trade deficit. The yen weakened slightly
to about 115 by the end of the period.
Q. WHAT WAS THE STORY WITH STERLING?
A. The British economy was strong during the period, with unemployment
coming down and fairly low inflation. After the election in May - when the
Labor Party defeated the long-standing Tories - the central bank began a
series of interest rates tightenings, which helped to strengthen sterling
further. The move to a single European currency has also made sterling look
attractive. Britain is viewed as a possible entry into a unified European
economy. If things go well leading up to a unified Europe, Britain is
expected to benefit. If it doesn't go well, Britain could opt out and
sterling would benefit as a "safe haven." Therefore, sterling retains an
option-like quality amidst the uncertainty of a unified Europe.
Q. WHAT'S YOUR OUTLOOK FOR THE CURRENCY MARKETS IN THE SECOND HALF OF THE
YEAR?
A. The biggest issue going forward for the mark will be the fate of the
EMU, or European Monetary Union. If the EMU happens as scheduled in 1999,
it may be a relatively weak currency - a prospect that could further hurt
the current position of the mark. If the EMU doesn't happen, or there's a
delay, we could see rapid mark appreciation. If the Japanese economy
strengthens, Japan starts to take in more U.S. imports and the trade
balance improves, the dollar is likely to go higher. If the trade picture
worsens for the U.S., the yen
will strengthen. In Japan, tensions likely will remain between the
government's desire to strengthen its economy and currency, while at the
same time protecting its investment in U.S. bonds. Therefore, Japan doesn't
want to see the dollar fall too rapidly. And the U.S. doesn't want to see
the Japanese pull out of its bond market because the U.S. is able to
finance its debt at a lower rate as a result of them participating in our
markets. More than anything else, I think the central banks want to keep
volatility low. Dampening volatility makes it a lot easier to plan
economies. Finally, with both the British and U.S. economies in great
shape, I think sterling will continue to be a strong currency.
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 NUMBER: Deutsche
Mark Portfolio, 497; Sterling
Portfolio, 498; Yen Portfolio,
499
START DATE: November
16, 1989
SIZE: as of June 30, 1997,
more than $4.2 million in the
Fidelity Deutsche Mark
Portfolio; more than $1.2
million in the Fidelity Sterling
Portfolio; more than $2.6
million in the Fidelity Yen
Portfolio
MANAGER: Jacques Perold,
since October 1995; joined
Fidelity in 1986
(checkmark)
JACQUES PEROLD ON THE
CONTINUED STRENGTH OF THE DOLLAR:
"The U.S. economy remained
one of the strongest of the
developed countries over the
period, with Gross Domestic
Product (GDP) rising about
5% in the first quarter alone.
With the prospect for further
strong economic growth and
high utilization rates, the
Federal Reserve raised the
federal funds rate - the rate
banks charge each other for
overnight loans - by 25 basis
points to 5.50% at the end of
March. Prospects for
continued strong growth kept
expectations for further rate
increases alive. A higher
interest rate offers a larger
return to investors who buy
the currency. While the U.S.
economy showed signs of
slowing in the second quarter,
it still remained strong relative
to the weaker German and
Japanese economies. An
additional factor that
supported the dollar over the
period was the strong
performance of the U.S.
equity markets. Solid
earnings reports have
continued to propel the U.S.
equity markets to record
highs and attracted foreign
capital investment."
FIDELITY DEUTSCHE MARK PERFORMANCE PORTFOLIO, L.P.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in repurchase agreements in a joint $ 4,364,000
trading account
Cash 72
Receivable from investment adviser for expense 6,685
reductions
TOTAL ASSETS 4,370,757
LIABILITIES
Unrealized depreciation on foreign currency contracts $ 100,086
Payable for closed foreign currency contracts 11,963
Payable for fund shares redeemed 9,063
Other payables and accrued expenses 19,814
TOTAL LIABILITIES 140,926
NET ASSETS $ 4,229,831
Net Assets consist of:
Undistributed net investment income $ 2,931,595
Accumulated undistributed net realized gain (loss) on 1,758,340
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and (100,086)
liabilities in foreign currencies
Excess of amounts paid on value of shares redeemed (360,018)
over paid in capital
NET ASSETS, for 275,303 shares outstanding $ 4,229,831
SHARES OUTSTANDING HELD BY: 10,005
General Partners
Limited Partners 265,298
TOTAL SHARES OUTSTANDING 275,303
NET ASSET VALUE and redemption price per share $15.36
($4,229,831 (divided by) 275,303 shares)
Maximum offering price per share (100/99.60 of $15.36) $15.42
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 148,618
Interest
EXPENSES
Management fee $ 13,366
Transfer agent fees 8,400
Accounting fees and expenses 30,001
Non-interested managing partners' compensation 178
Custodian fees and expenses 7,498
Registration fees 17,622
Audit 10,834
Legal 2,556
Miscellaneous 46
Total expenses before reductions 90,501
Expense reductions (50,850) 39,651
NET INVESTMENT INCOME 108,967
REALIZED AND UNREALIZED GAIN (LOSS) (667,291)
Net realized gain (loss) on foreign currency transactions
Change in net unrealized appreciation (depreciation) on (77,620)
assets and liabilities in foreign currencies
NET GAIN (LOSS) (744,911)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (635,944)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 108,967 $ 305,933
Net investment income
Net realized gain (loss) (667,291) (822,811)
Change in net unrealized appreciation (depreciation) (77,620) (1,451)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (635,944) (518,329)
FROM OPERATIONS
Share transactions 1,087,308 2,518,039
Net proceeds from sales of shares
Cost of shares redeemed (2,232,085) (7,520,631)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (1,144,777) (5,002,592)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,780,721) (5,520,921)
NET ASSETS
Beginning of period 6,010,552 11,531,473
End of period (including undistributed net investment $ 4,229,831 $ 6,010,552
income of $2,931,595 and $2,822,628, respectively)
OTHER INFORMATION
Shares
Sold 68,644 142,827
Redeemed (142,250) (430,164)
Net increase (decrease) (73,606) (287,337)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 17.23 $ 18.12 $ 16.33 $ 14.03 $ 14.20 $ 14.05
beginning of period
Income from Investment
Operations
Net investment .32 .71 .78 .43 .23 .34
income D
Net realized and (2.19) (1.60) 1.01 1.87 (.40) (.19)
unrealized gain
(loss)
Total from investment (1.87) (.89) 1.79 2.30 (.17) .15
operations
Net asset value, $ 15.36 $ 17.23 $ 18.12 $ 16.33 $ 14.03 $ 14.20
end of period
TOTAL RETURN B, C (10.85)% (4.91)% 10.96% 16.39% (1.20)% 1.07
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,230 $ 6,011 $ 11,531 $ 8,517 $ 5,777 $ 9,007
(000 omitted)
Ratio of expenses to 1.50% A, 1.50% 1.50% 1.50% 1.50% 1.29
average net assets E E E E E %
Ratio of net investment 4.12% A 4.04% 4.31% 2.81% 1.62% 2.38
income to average %
net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR 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
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in repurchase agreements in a joint $ 1,285,000
trading account
Cash 424
Unrealized appreciation on foreign currency contracts 20,169
Receivable for closed foreign currency contracts 831
Receivable from investment adviser for expense 3,269
reductions
TOTAL ASSETS 1,309,693
LIABILITIES
Other payables and accrued expenses 16,466
NET ASSETS $ 1,293,227
Net Assets consist of:
Undistributed net investment income $ 963,631
Accumulated undistributed net realized gain (loss) on 873,509
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and 20,169
liabilities in foreign currencies
Excess of amounts paid on value of shares redeemed (564,082)
over paid in capital
NET ASSETS, for 73,459 shares outstanding $ 1,293,227
SHARES OUTSTANDING HELD BY: 10,005
General Partners
Limited Partners 63,454
TOTAL SHARES OUTSTANDING 73,459
NET ASSET VALUE and redemption price per share $17.60
($1,293,227 (divided by) 73,459 shares)
Maximum offering price per share (100/99.60 of $17.60) $17.67
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 38,721
Interest
EXPENSES
Management fee $ 3,550
Transfer agent fees 1,948
Accounting fees and expenses 30,000
Non-interested managing partners' compensation 3
Custodian fees and expenses 7,502
Registration fees 17,972
Audit 5,682
Legal 3,043
Miscellaneous 7
Total expenses before reductions 69,707
Expense reductions (59,144) 10,563
NET INVESTMENT INCOME 28,158
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on foreign currency transactions (22,303)
Change in net unrealized appreciation (depreciation) on (12,092)
assets and liabilities in foreign currencies
NET GAIN (LOSS) (34,395)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (6,237)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 28,158 $ 43,962
Net investment income
Net realized gain (loss) (22,303) 108,201
Change in net unrealized appreciation (depreciation) (12,092) 21,308
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (6,237) 173,471
FROM OPERATIONS
Share transactions 785,532 1,324,227
Net proceeds from sales of shares
Cost of shares redeemed (997,533) (1,007,267)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (212,001) 316,960
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (218,238) 490,431
NET ASSETS
Beginning of period 1,511,465 1,021,034
End of period (including undistributed net investment $ 1,293,227 $ 1,511,465
income of $963,631 and $935,473, respectively)
OTHER INFORMATION
Shares
Sold 46,153 80,238
Redeemed (57,954) (61,425)
Net increase (decrease) (11,801) 18,813
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 17.73 $ 15.37 $ 14.79 $ 13.46 $ 13.16 $ 14.97
beginning of period
Income from Investment
Operations
Net investment .34 .62 .68 .38 .22 .34
income D
Net realized and (.47) 1.74 (.10) .95 .08 (2.15)
unrealized gain
(loss)
Total from investment (.13) 2.36 .58 1.33 .30 (1.81)
operations
Net asset value, $ 17.60 $ 17.73 $ 15.37 $ 14.79 $ 13.46 $ 13.16
end of period
TOTAL RETURN B, C (.73)% 15.35% 3.92% 9.88% 2.28% (12.09)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,293 $ 1,511 $ 1,021 $ 3,343 $ 3,684 $ 1,715
(000 omitted)
Ratio of expenses to 1.50% A, 1.50% 1.50% 1.50% 1.50% 1.50%
average net assets E E E E E E
Ratio of net investment 3.99% A 3.92% 4.44% 2.69% 1.61% 2.27%
income to average
net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR 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 YEN PERFORMANCE PORTFOLIO, L.P.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in repurchase agreements in a joint $ 2,671,000
trading account
Cash 946
Unrealized appreciation on foreign currency contracts 31,276
Receivable for closed foreign currency contracts 11,940
Receivable from investment adviser for expense 6,025
reductions
TOTAL ASSETS 2,721,187
LIABILITIES
Payable for fund shares redeemed $ 7,815
Other payables and accrued expenses 19,455
TOTAL LIABILITIES 27,270
NET ASSETS $ 2,693,917
Net Assets consist of:
Paid in capital $ 733,843
Undistributed net investment income 1,037,085
Accumulated undistributed net realized gain (loss) on 891,713
foreign currency transactions
Net unrealized appreciation (depreciation) on assets and 31,276
liabilities in foreign currencies
NET ASSETS, for 185,606 shares outstanding $ 2,693,917
SHARES OUTSTANDING HELD BY: 10,007
General Partners
Limited Partners 175,599
TOTAL SHARES OUTSTANDING 185,606
NET ASSET VALUE and redemption price per share $14.51
($2,693,917 (divided by) 185,606 shares)
Maximum offering price per share (100/99.60 of $14.51) $14.57
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 73,609
Interest
EXPENSES
Management fee $ 6,679
Transfer agent fees 4,917
Accounting fees and expenses 30,000
Non-interested managing partners' compensation 64
Custodian fees and expenses 7,508
Registration fees 17,622
Audit 8,628
Legal 3,046
Miscellaneous 18
Total expenses before reductions 78,482
Expense reductions (58,691) 19,791
NET INVESTMENT INCOME 53,818
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on foreign currency transactions (82,207)
Change in net unrealized appreciation (depreciation) on 85,617
assets and liabilities in foreign currencies
NET GAIN (LOSS) 3,410
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 57,228
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 53,818 $ 109,719
Net investment income
Net realized gain (loss) (82,207) (476,220)
Change in net unrealized appreciation (depreciation) 85,617 4,970
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 57,228 (361,531)
FROM OPERATIONS
Share transactions 1,679,581 4,687,166
Net proceeds from sales of shares
Cost of shares redeemed (1,510,606) (4,751,388)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 168,975 (64,222)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 226,203 (425,753)
NET ASSETS
Beginning of period 2,467,714 2,893,467
End of period (including undistributed net investment $ 2,693,917 $ 2,467,714
income of $1,037,085 and $983,267, respectively)
OTHER INFORMATION
Shares
Sold 121,623 301,567
Redeemed (107,227) (307,617)
Net increase (decrease) 14,396 (6,050)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 14.41 $ 16.32 $ 16.93 $ 15.03 $ 13.29 $ 12.97
beginning of period
Income from Investment
Operations
Net investment .28 .63 .82 .47 .24 .28
income D
Net realized and (.18) F (2.54) (1.43) 1.43 1.50 .04
unrealized gain
(loss)
Total from investment .10 (1.91) (.61) 1.90 1.74 .32
operations
Net asset value, $ 14.51 $ 14.41 $ 16.32 $ 16.93 $ 15.03 $ 13.29
end of period
TOTAL RETURN B, C .69% (11.70)% (3.60)% 12.64% 13.09% 2.47%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,694 $ 2,468 $ 2,893 $ 3,505 $ 2,253 $ 3,801
(000 omitted)
Ratio of expenses to 1.50% A, 1.50% 1.50% 1.50% 1.50% 1.50%
average net assets E E E E E E
Ratio of net investment 4.08% A 4.09% 4.38% 2.86% 1.56% 2.13%
income to average
net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR 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).
F THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOE 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1997 (Unaudited)
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 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 through December 31, 1997. Instead, each partner is allocated a
proportionate share of taxable income (see Note 8).
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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
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 $4,364,719
for Fidelity Deutsche Mark Performance Portfolio, L.P., $1,285,212 for
Fidelity Sterling Performance Portfolio, L.P. and $2,671,440 for Fidelity
Yen Performance Portfolio, L.P., all at 5.93 %. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING
DATED JUNE 30, 1997, DUE JULY 1, 1997 AT 5.93%
Number of dealers or banks 24
Maximum amount with one dealer or bank 12.6%
Aggregate principal amount of agreements $19,848,680,000
Aggregate maturity amount of agreements $19,851,952,266
Aggregate market value of transferred assets $20,252,952,827
Coupon rates of transferred assets 0.0% to 15 3/4%
Maturity dates of transferred assets 7/3/97 to 2/15/27
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 $3,714, $2,581 and $5,316 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 annualized rate of
.32%, .28% and .37% 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 each fund's 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 $50,840, $59,121
and $58,666 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 $10, $23 and $25 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, and certain unaffiliated shareholders
were record owners of 10% or more of the total outstanding shares of the
following funds:
BENEFICIAL INTEREST
FUND AFFILIATED SHAREHOLDERS UNAFFILIATED SHAREHOLDERS
% OF OWNERSHIP # OF % OF OWNERSHIP
Sterling Performance Portfolio, L.P. 14 1 10
Yen Performance Portfolio, L.P. 5 - -
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.
7,291,352 DEM 9/3/97 $ 4,197,478 $ (100,086)
(Payable amount $4,297,564)
FIDELITY STERLING PERFORMANCE PORTFOLIO, L.P.
771,336 GBP 9/3/97 $ 1,281,494 $ 20,169
(Payable amount $1,261,325)
FIDELITY YEN PERFORMANCE PORTFOLIO, L.P.
303,873,051 JPY 9/3/97 $ 2,676,117 $ 31,276
(Payable amount $2,644,841)
8. PROPOSED LIQUIDATION.
On May 15, 1997, the Managing General Partners approved the liquidation of
the funds on or before December 31, 1997. Effective June 1, 1997, the funds
were closed to new and existing investors. In connection with the
liquidation, shareholders of the funds will be able to transfer their
investments into other Fidelity retail funds on a no-load basis if they
redeem before the funds' anticipated liquidation date of December 15, 1997.
In connection with the proposed liquidation, any liquidation or redemption
of all shares of limited partnership interests will be treated as a taxable
event.
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 VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management &
Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, PRESIDENT
William J. Hayes, VICE PRESIDENT
Richard A. Spillane Jr., VICE PRESIDENT
Arthur S. Loring, SECRETARY
Richard A. Silver, TREASURER
Robert H. Morrison, MANAGER,
SECURITY TRANSACTIONS
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
MANAGING GENERAL PARTNERS
Ralph F. Cox *
Phyllis Burke Davis *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
NON-MANAGING GENERAL PARTNER
Fidelity Management &
Research Company
Boston, MA
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT MANAGING GENERAL PARTNERS
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S 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
