FIDELITY U.S. EQUITY INDEX PORTFOLIO 82 DEVONSHIRE STREET
A Portfolio of Fidelity Institutional Trust BOSTON, MASSACHUSETTS 02109
PROSPECTUS
Fidelity U.S. Equity Index Portfolio offers institutional investors a
convenient and economical way to invest in an open-end, diversified,
management investment company. Fidelity U.S. Equity Index Portfolio (the
Portfolio) seeks to provide investment results that correspond to the total
return (i.e., the combination of capital changes and income) performance of
common stocks publicly traded in the United States. In seeking this
objective, the Portfolio attempts to duplicate the composition and total
return of the Standard & Poor's Daily Stock Price Index of 500 Common
Stocks (the "S&P 500 Index" or the "Index"), while keeping transaction
costs and other expenses low.
This Prospectus is designed to provide you with information before
investing and to help you decide if the Portfolio's goals match your own.
Please read and retain this document for future reference. The Annual
Report to Shareholders is incorporated herein beginning on page 16.
A Statement of Additional Information (dated December 30, 1991) for the
Portfolio has been filed with the Securities and Exchange Commission (the
SEC) and is incorporated herein by reference. This free Statement and
additional copies of the Prospectus and Annual Report are available upon
request from Fidelity Distributors Corporation (Distributors), 82
Devonshire Street, Boston, MA 02109.
For further information or assistance in opening a new account, please call
Client Services.
RETIREMENT PLAN ACCOUNTS
(toll free) 800-544-0276
FINANCIAL AND OTHER INSTITUTIONS
Nationwide (toll free) 800-343-6310
in Massachusetts (call collect) 617-330-0597
If you are investing through another institution, contact that institution
directly.
TABLE OF CONTENTS
Summary of Portfolio Expenses
Per-Share Data and Ratios
Investment Objective
Suitability
How to Invest
How to Exchange
How to Redeem
Distributions and Taxes
Investment Policies
Portfolio Transactions
Performance
Management Contract, Distribution Plan and Service Agreements
Financial Statements 16
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUMMARY OF PORTFOLIO EXPENSES
The purpose of this table is to assist you in understanding the various
costs and expenses that an investor in the Portfolio would bear directly or
indirectly. This standard format was developed for use by all mutual funds
to help investors make their investment decisions. Of course, you should
consider this expense information along with other important information in
this Prospectus, such as the Portfolio's investment objective, past
performance and per-share data and ratios.
A. ANNUAL PORTFOLIO OPERATING EXPENSES AFTER EXPENSE REIMBURSEMENT (as a
percentage of average net assets):
Management Fees -0-
Other Expenses .28%
TOTAL PORTFOLIO OPERATING EXPENSES .28%
B. EXAMPLE: You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of each time
period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$3 $9 $16 $36
A. ANNUAL PORTFOLIO OPERATING EXPENSES are based on the Portfolio's
historical expenses. Management Fees are paid by the Portfolio to Fidelity
Management & Research Company ("FMR "or the "Adviser") for managing its
investments and business affairs. The Portfolio incurs Other Expenses for
maintaining shareholder records, furnishing shareholder statements and
reports, and other services. Subject to revision upon 90 days' notice to
shareholders, FMR has voluntarily agreed to reimburse the Portfolio if and
to the extent that any of the Portfolio's aggregate operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) exceed an annual rate of .28% of the Portfolio's average net
assets. If this agreement were not in effect, Management Fees, Other
Expenses and Total Operating Expenses for the Portfolio would have been
.28%, .39% and .67%, respectively. Please refer to the section "Management
Contract, Distribution Plan and Service Agreements" on page for further
information.
B. EXAMPLE. The hypothetical example illustrates the expenses associated
with a $1,000 investment over periods of one, three, five and ten years,
based on the expenses in the table and an assumed annual rate of return of
5%. These figures reflect FMR's voluntary reimbursement of fees and other
expenses. THE RETURN OF 5% AND EXPENSES SHOULD NOT BE CONSIDERED
INDICATIONS OF ACTUAL OR EXPECTED PORTFOLIO PERFORMANCE, BOTH OF WHICH MAY
VARY.
PER-SHARE DATA AND RATIOS
The table below gives you information about the Portfolio's financial
history. It uses the Portfolio's fiscal year end (October 31) and expresses
the information in lines 1 through 9 in terms of a single share outstanding
throughout the periods shown.
February 17, 1988
(Commencement of
Years Ended October 31, Operations) to
1991 1990 1989 October 31, 1988
1. Investment income $ .46 $ .47 $ .41 $ .24
2. Expenses (dagger) .04 .03 .03 .01 #
3. Investment income - net .42 .44 .38 .23
4. Dividends from investment income - net (.44) (.48) (.35) (.16)
5. Realized and unrealized gain (loss) - net on investments on
basis of average cost and futures contracts 3.38 (1.44) 2.41 .74
6. Distributions from realized gain on investments - net -- (.14) (.02)
- --
7. Net increase (decrease) in net asset value 3.36 (1.62) 2.42 .81
8. Net asset value:
Beginning of period 11.61 13.23 10.81 10.00
End of period $ 14.97 $ 11.61 $ 13.23 $ 10.81
9. Expenses borne by the investment adviser (dagger) $ .05 $ .05 $ .07 $
.12
Ratio of expenses to average net assets (dagger) .28% .28% .28%
.28%*
Ratio of expenses to average net assets before voluntary
expense limitation (dagger) .67% .66% .97% 1.83%*#
Ratio of investment income - net to average net assets 3.14% 3.55%
3.79% 4.56%*
Portfolio turnover rate 4% 2% 10% 3%*
Shares outstanding at end of period (000 omitted) 64,176 37,516
22,967 3,199
* ANNUALIZED
(DAGGER) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS ON PAGE 29.
# EXPENSES FOR THE PERIOD FEBRUARY 17, 1988 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1988 WOULD HAVE BEEN LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION IF THE VOLUNTARY LIMITATION HAD NOT BEEN IN EFFECT.
The Per-Share Data and Ratios table presented above has been audited by
Price Waterhouse, independent accountants, whose
unqualified report covering the periods shown is included on page 31. The
Annual Report begins on page 16.
INVESTMENT OBJECTIVE
Fidelity U.S. Equity Index Portfolio's investment objective is to provide
investment results that correspond to the total return (i.e., the
combination of capital changes and income) performance of common stocks
publicly traded in the United States. In seeking this objective, the
Portfolio attempts to duplicate the composition and total return of the
S&P 500 Index while keeping transaction costs and other expenses low.
The S&P 500 Index is a widely recognized unmanaged index of common
stock prices and represents over 70% of the market value of all common
stocks that are publicly traded in the United States. Total returns for the
Index assume reinvestment of dividends but do not include the effect of
taxes, brokerage commissions or other fees. The Portfolio will attempt to
duplicate the capital performance and dividend income of the S&P 500
Index. We may not always achieve our objective, but we will follow the
investment style described in "Investment Policies" on page .
Except for the Portfolio's objective and the investment limitations
identified as fundamental, the Portfolio's policies described in this
Prospectus are not fundamental policies. Non-fundamental policies may be
changed without shareholder approval.
SUITABILITY
By itself, the Portfolio does not constitute a balanced investment plan.
The Portfolio's share price, yield and total return will fluctuate and your
investment may be worth more or less than its original cost when you redeem
your shares.
The Portfolio is designed as an economical and convenient investment
vehicle for institutional investors whose objective is to seek a return
corresponding to the return of the S&P 500 Index with reasonable
consistency over time. Such investors may include those holding taxable
accounts or tax-qualified accounts such as 401(k) accounts and 403(b)
accounts and institutions with defined benefit or defined contribution
plans, as well as bank trust departments, foundations and endowments. The
Portfolio has arranged for special processing to assist banks and other
institutions to establish multiple accounts, described under "Subaccounting
and Special Services" on page .
HOW TO INVEST
Shares of the Portfolio are offered continuously at their net asset value
next determined after an order is received and accepted. The Portfolio does
not impose any sales charges in connection with the purchase of its shares
although institutions may charge their clients fees in connection with
purchases and sales for the accounts of their clients.
SHARE PRICE. The price of one share of the Portfolio is its net asset value
per share (NAV). Fidelity Service Co. (Service), an affiliate of FMR,
calculates the NAV at the close of the Portfolio's business day, which
coincides with the close of business of the New York Stock Exchange (NYSE)
- - normally 4:00 p.m. Eastern time. The Portfolio is open for business each
day the NYSE is open (see "Holiday Schedule," below). NAV is computed for
the Portfolio by adding all securities plus cash and other assets,
deducting liabilities and then dividing the result by the number of shares
outstanding. Portfolio securities and other assets are valued primarily on
the basis of market quotations, or if quotations are not available, by a
method that the Board of Trustees believes in good faith accurately
reflects fair value.
HOLIDAY SCHEDULE. The Portfolio is open for business and its NAV is
calculated every day the NYSE is open. The following holiday closings have
been scheduled for 1992 and FMR expects the same holiday schedule to be
observed in the future: New Year's Day, President's Day, Good Friday,
Memorial Day (observed), Independence Day (observed), Labor Day,
Thanksgiving Day and Christmas Day. This holiday schedule may be modified
by the NYSE. On any day when the NYSE closes early, the right is reserved
to advance the time on that day by which purchase and redemption orders
must be received. To the extent that the Portfolio's securities are traded
in other markets on days when the NYSE is closed, the Portfolio's NAV may
be affected when investors may not purchase or redeem shares. Certain
Fidelity funds may follow different holiday closing schedules.
HOW TO INVEST
INITIAL (minimum) INVESTMENT (DAGGER)
$100,000
METHOD
BY WIRE
ADDITIONAL (minimum) INVESTMENT
- --
BY MAIL
$100,000
- --
Fidelity U.S. Equity Index Portfolio
Fidelity Investments
Institutional Operations Company
P.O. Box 648, ZR5
Boston, MA 02102
Please make your check payable to the
name of the Portfolio, with your account
number on the check, and mail to: THE
ADDRESS PRINTED ON YOUR ACCOUNT
STATEMENT.
BY EXCHANGE
(From an account in one
of Fidelity's other
funds.)
$100,000
- --
Not Available
BY FIDELITY MONEY LINE
$250
(You must have received prior
notification by mail from FIIOC that
your Fidelity Money Line is active. The
maximum transaction amount is
$50,000.)
INITIAL INVESTMENT Retirement Plans (toll free) 800-544-0276
Financial Institutions (toll free) 800-343-6310
In Massachusetts (call collect) 617-330-0597
ADDITIONAL INVESTMENT Retirement Plans (toll free) 800-962-1375
Financial Institutions (toll free) 800-544-9999
In Massachusetts (call collect) 617-439-0324
(dagger) Minimum may be waived for tax-saving retirement plans.
INITIAL INVESTMENT. In order to establish a new account in the Portfolio,
an initial investment must be made in the amount of $100,000 or more by
wire, mail or exchange from an account in one of Fidelity's other funds,
and must be preceded or accompanied by a completed, signed application. A
properly completed application must be on file prior to making a redemption
from an account. Minimum investment requirements may differ or may not
apply to participants of tax-saving retirement plans.
ADDITIONAL INVESTMENTS. Additional investments by wire, mail or exchange
from another Fidelity fund may be made in any amount. The minimum and
maximum additional investment amount via Fidelity Money Line is $250 and
$50,000, respectively.
TO INVEST BY WIRE. Prior to opening an account by wire, all investors must
call the appropriate number in the chart above to advise Client Services of
the investment and to obtain an account number and instructions regarding
the establishment of an account.
To make additional investments by wire, you must call Client Services
before 4:00 p.m. Eastern time at the appropriate telephone number in the
chart above to advise them of your purchase by wire and to receive wiring
instructions. We must receive your wire payment by the close of the
Portfolio's following business day after you have placed your telephone
order (or your purchase may be cancelled and you could be held liable for
resulting fees or losses). Your bank may charge a fee for wiring funds to
the Portfolio.
TO INVEST BY MAIL. To open an account by mail, you must send a check
payable to Fidelity U.S. Equity Index Portfolio to:
Fidelity U.S. Equity Index Portfolio
Fidelity Investments Institutional Operations Company
P.O. Box 648, ZR5
Boston, MA 02102-0648
To make additional investments by mail, please make your check payable to
Fidelity U.S. Equity Index Portfolio, include your account number on the
check and mail your investment to the address printed on your account
statement.
Your purchase will be processed at the next NAV calculated after your order
is received and accepted. If your check does not clear, your purchase will
be cancelled and you could be held liable for any losses or fees incurred.
When you purchase by check, the Portfolio can hold payment on redemptions
until it is reasonably satisfied that the investment has been collected
(which can take up to seven days). To avoid this collection period you can
invest by wire (see "To Invest by Wire,"page 5).
TO INVEST BY EXCHANGE. When opening an account by exchange from an account
in one of Fidelity's other funds, your new account must be established with
the same name(s), address and taxpayer identification number as your other
Fidelity account. To open an account or make an additional investment by
exchange, please call Client Services before 4:00 p.m. Eastern time at the
appropriate telephone number in the chart on page .
TO INVEST VIA FIDELITY MONEY LINE. Fidelity Money Line allows you to
authorize electronic transfers of money to buy or sell shares. You can use
Fidelity Money Line like an "electronic check" to move money between your
bank account and your account in the Portfolio with one telephone call.
Allow two to three business days after the call for the transfer to take
place.
To make additional investments via Fidelity Money Line, you must have
received prior notification from Fidelity Investments Institutional
Operations Company (FIIOC) that your Fidelity Money Line is active. When
you purchase via Fidelity Money Line, the Portfolio can hold payment on
redemptions until it is reasonably satisfied that the investment has been
collected (which can take up to seven days). To avoid this collection
period you can invest by wire (see "To Invest by Wire," page 5). To make an
additional investment via Fidelity Money Line, please call Client Services
before 4:00 p.m. Eastern time at the appropriate telephone number in the
chart on page .
All account transactions by telephone (i.e., purchases and redemptions by
wire, exchange or via Fidelity Money Line) will be recorded. Since
recordings may not be available, you should verify the accuracy of all
transactions immediately upon receipt of your confirmation statement.
Fidelity will not be responsible for the authenticity of telephone
instructions or losses, if any, resulting from unauthorized shareholder
transactions. Fidelity has been informed, however, that the SEC Staff is
currently examining whether such responsibility may be disclaimed.
TO INVEST BY SECURITIES EXCHANGE. Shares of the Portfolio may be purchased
in exchange for securities held by an investor which are acceptable to the
Portfolio. Only securities which meet the Portfolio's objective, policies
and limitations will be eligible for exchange, however, Distributors
reserves the right to refuse a tender for any reason. You may realize a
gain or loss for federal income tax purposes upon a securities exchange
depending upon the cost basis of the securities tendered.
If you are interested in purchasing shares by securities exchange you
should call Client Services at the appropriate telephone number in the
chart on page for further information, including specific details about
the securities exchange program and instructions on submission of a letter
of intention to Distributors. DO NOT SEND SECURITIES TO THE PORTFOLIO OR TO
DISTRIBUTORS.
TAX-SAVING RETIREMENT PLANS. Fidelity can set up your new account in the
Portfolio under one of several tax-sheltered plans. These plans let you
save for retirement and shelter your investment income from current taxes.
Minimums may differ from those listed on page .
(bullet) Defined Contribution Plans such as 401(k), company sponsored IRA
programs, Thrift, Keogh or Corporate Profit-Sharing or Money-Purchase Plans
are open to self-employed people and their partners or to corporations, to
benefit themselves and their employees.
(bullet) 403(b) Custodial Accounts are open to employees of most
non-profit organizations.
(bullet) Defined Benefit Plans are open to corporations of all sizes to
benefit their employees.
(bullet) 457 Plans are open to employees of most government agencies.
If you are a participant in a defined contribution plan or a 403(b)
custodial account that covers more than 200 eligible employees, or have
more than $3 million in plan assets invested in Fidelity mutual funds and
the plan has assets managed by Fidelity, you may move any distributions you
receive from the plan to a Fidelity rollover IRA. You also can elect to
take your distributions in kind and establish an IRA rollover account in
the Portfolio.
You may invest in most Fidelity retail funds without paying a sales charge.
For any qualifying IRA rollover to the Portfolio, as defined above, there
is no minimum investment required when opening an account.
SUBACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for banks, corporations and other institutions that wish to open
multiple accounts (a master account and subaccounts). If you wish to
utilize FIIOC's subaccounting facilities or other special services for
individual or multiple accounts you will be required to enter into a
separate agreement with FIIOC. Charges for these services, if any, will be
determined on the basis of the level of services to be rendered.
Subaccounts may be opened with the initial investment or at a later date
and may be established with registration either by name or by number.
The Portfolio reserves the right to suspend the offering of shares for a
period of time and to reject any specific purchase order, including certain
purchases by exchange (see "How to Exchange," below). Purchase orders may
be refused if, in FMR's opinion, they are of a size that would disrupt
management of the Portfolio. Investors are urged to initiate purchases as
early in the day as possible and to notify the Portfolio a day in advance
of large purchases.
HOW TO EXCHANGE
The exchange privilege is a convenient way to buy shares in Fidelity's
other funds and in the Portfolio as your goals or market conditions change
(see "To Invest by Exchange," page for instructions on exchanging shares
of other Fidelity funds for shares of the Portfolio). You may exchange
shares of this Portfolio for shares of all Fidelity funds registered in
your state. Please read the prospectus of the fund into which you want to
exchange for relevant information, including any applicable sales charges.
You may exchange all or any part of the value of your accounts on any day
the Portfolio is open for business. Exchanges may be requested in writing
or by telephone and are effected at the NAV next determined after receipt
of the exchange request. When exchanging into a fund, you must meet the
minimum investment requirements of that fund. You should note that as
exchange transactions actually involve the purchase or redemption of
shares, all exchanges will be subject to conditions described in "How to
Invest," beginning on page or in "How to Redeem," page 8.
If you are a participant in the Trust Portfolios program and wish to
exchange into funds in the program, you must, during the initial six month
period, reach and maintain an aggregate balance of at least $500,000, after
meeting the initial investment requirement.
Written requests for exchange should be mailed to:
Fidelity U.S. Equity Index Portfolio
Fidelity Investments Institutional Operations Company
P.O. Box 648, ZR5
Boston, MA 02102-0648
To exchange by telephone call Client Services before 4:00 p.m. Eastern time
at the appropriate telephone number in the chart on page .
Each exchange may produce a capital loss, or taxable capital gain. (Please
consult "Distributions and Taxes," page .)
To protect the Portfolio's performance and shareholders, Fidelity
discourages frequent trading in response to short-term market fluctuations.
You may make four exchanges per calendar year out of the Portfolio; if you
exceed this limit, your future purchases of (including exchanges into)
Fidelity funds may be permanently refused. For purposes of the four
exchange limit, accounts under common ownership or control, including
accounts having the same taxpayer identification number, will be
aggregated. Other funds may have different exchange restrictions, and
currently may impose administrative fees of $5.00 and $7.50 and redemption
fees of up to 1.5%. Check each fund's prospectus for details.
The Portfolio reserves the right at any time without prior notice to refuse
exchange purchases by any person or group if, in FMR's judgement, the
Portfolio would be unable to invest effectively in accordance with its
investment objective and policies or might otherwise be adversely affected.
The Portfolio may terminate or modify the exchange privilege in the future.
In order to allow FMR to manage the Portfolio effectively, you are strongly
urged to initiate exchanges of shares as early in the day as possible.
HOW TO REDEEM
You may redeem all or a portion of your shares on any business day (see
"Holiday Schedule," page ). Your shares will be redeemed at the NAV next
calculated after the Portfolio has received and accepted your redemption
request. The wiring of redemption proceeds is available only to investors
who have previously established the wire privilege (see "To Redeem by
Telephone," page 9).
Once your shares are redeemed, the Portfolio normally will send you the
proceeds on the next business day. If making immediate payment could
adversely affect the Portfolio, it may take up to seven days to pay you.
Fidelity Money Line redemptions generally will be credited to your bank
account on the second or third business day after your telephone call.
Remember that we may hold payment until we are reasonably satisfied that we
have collected investments which were made by check or via Fidelity Money
Line (which may take up to seven days).
If you want to keep your account open, please leave $100,000 in it. If your
account balance falls below $100,000 due to redemption, your account may be
closed and the proceeds mailed to you at the record address. We will give
you 30 days' notice that your account will be closed unless you make an
additional investment to increase your account balance to the $100,000
minimum. Minimum investment requirements may differ or may not apply to
participants of tax-saving retirement plans.
TO REDEEM BY MAIL. Send a letter of instruction with your signature(s)
guaranteed to:
Fidelity U.S. Equity Index Portfolio
Fidelity Investments Institutional Operations Company
P.O. Box 648, ZR5
Boston, MA 02102-0648
The letter should specify the name of the Portfolio, the number of shares
to be sold, your name, your account number, and should include the
additional requirements listed below that apply to your particular account.
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Letter of instruction signed by Sole
Proprietorship, all person(s) required to sign
Custodial (Uniform for the account exactly as it is
Gifts/Transfers to registered, accompanied by
Minors Act), signature guarantee(s).
General Partners
Corporations, Letter of instruction and a cor-
Associations porate resolution, signed by -
person(s) required to sign for
the account accompanied by
signature guarantee(s).
Trusts A letter of instruction signed by
the Trustee(s) with a signature
guarantee. (If the Trustee's
name is not registered on your
account, also provide a copy of
the trust document, certified
within the last 60 days).
If you do not fall into any of these registration categories (e.g.,
Executors, Administrators, Conservators, or Guardians), please call Client
Services at the appropriate telephone number in the chart on page 5 for
further instructions.
A signature guarantee is a widely accepted way to protect you and FIIOC by
verifying the signature on your request; it may not be provided by a notary
public. The following institutions should be able to provide you with a
signature guarantee: a national or state bank (or savings bank in New York
or Massachusetts only), a trust company, a federal savings and loan
association; or a member firm of the New York, American, Boston, Midwest,
or Pacific stock exchanges.
TO REDEEM BY TELEPHONE. You may redeem an amount from your account in the
Portfolio by instructing FIIOC to have the proceeds of redemptions wired
directly to your previously designated bank account(s). There is no charge
imposed for wiring of redemption proceeds. In making redemption requests,
the name(s) of the registered shareholder(s) and the account number(s) must
be supplied.
If you have not previously established the wire privilege and provided that
your account registration has not changed within the last 60 days, you may
redeem shares of the Portfolio worth $25,000 or less. Your redemption
proceeds will be sent to the record address.
To redeem by telephone call Client Services before 4:00 p.m. Eastern time
at the appropriate telephone number below:
RETIREMENT PLANS (TOLL FREE) 800-962-1375
FINANCIAL INSTITUTIONS (TOLL FREE) 800-544-9999
TO REDEEM VIA FIDELITY MONEY LINE. You must have received prior
notification by mail from FIIOC that your Fidelity Money Line is active.
The minimum and maximum redemption amount via Fidelity Money Line is $250
and $50,000, respectively. Accounts may not be closed by this service. To
redeem via Fidelity Money Line call Client Services at the appropriate
telephone number above.
ADDITIONAL INFORMATION. In order to allow FMR to manage the Portfolio most
effectively, investors are strongly urged to initiate all trades
(investments, exchanges and redemptions of shares) as early in the day as
possible and to notify Client Services at least one day in advance of
trades in excess of $500,000. In making these trade notifications, the
name(s) of the registered shareholder(s) and the account number(s) must be
supplied.
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, the
Portfolio may suspend redemption or postpone payment dates. If you are
unable to execute your transactions by telephone (for example, during times
of unusual market activity) consider placing your order by mail. The
offering of shares of the Portfolio may be suspended for a period of time,
and the Portfolio reserves the right to reject any specific purchase order.
Purchase orders may be refused if, in FMR's opinion, they are of a size
that would disrupt management of the Portfolio. The Portfolio may
discontinue offering its shares at any time or in any particular state
without notice to shareholders.
STATEMENTS AND REPORTS. You will receive a statement after every
transaction (except a reinvestment of dividends or capital gains) that
affects your share balance or your account registration. The Portfolio does
not issue share certificates, but FIIOC mails investors a confirmation of
each investment or redemption from their account. FIIOC will send
retirement plan participants account statements setting forth the
transactions in their account for the quarter and quarter-end balances; all
other investors will receive a similar statement for the month and the
month-end balances of full and fractional shares held in the account. This
account statement will be sent within ten days after the close of the
period.
At least twice a year you will receive the Portfolio's financial
statements. To reduce expenses, only one copy of most Portfolio reports
(such as the Portfolio's Annual Report) may be mailed to your household.
Write to the Portfolio if you need to have additional reports sent each
time. The Portfolio pays for these shareholder services but not for special
services, such as a request for a historical transcript of an account. You
may be required to pay a fee for these special services.
DISTRIBUTIONS AND TAXES
The following discussion describes the status of distributions for federal
income tax purposes. Whether it is applicable to you depends on your filing
status. If you have invested through a tax-sheltered retirement plan, you
generally will not incur federal income tax liability from your investment
in the Portfolio until you withdraw money from the retirement plan.
Income dividends normally are credited to your account quarterly. Any net
capital gains normally are distributed in December.
FEDERAL TAXES. Distributions from the Portfolio's income and short-term
capital gains are taxed as dividends, and long-term capital gain
distributions are taxed as long-term capital gains. A portion of the
Portfolio's dividends may qualify for the dividends received deduction for
corporations. Distributions are taxable when they are paid, whether you
take them in cash or reinvest them in additional shares, except that
distributions declared in December and paid in January are taxable as if
paid on December 31st. The Portfolio will send you a tax statement by
January 31 showing the tax status of the distributions you received in the
past year, and will file a copy with the IRS.
CAPITAL GAINS. You may realize a capital gain or loss when you redeem
(sell) or exchange shares. For most types of accounts, the Portfolio will
report the proceeds of your redemptions to you and the IRS annually.
However, because the tax treatment also depends on your purchase price and
your personal tax position, you also should keep your regular account
statements to use in determining your tax.
"BUYING A DIVIDEND." On the record date for a distribution, the Portfolio's
share value is reduced by the amount of the distribution. If you buy shares
just before the record date (buying a dividend), you will pay the full
price for the shares, and then receive a portion of the price back as a
taxable distribution.
OTHER TAX INFORMATION. In addition to federal taxes, you may be subject to
state or local taxes on your investment, depending on the laws in your
area. Tax considerations may be different for investors purchasing shares
of the Portfolio through certain retirement plans.
When you sign your account application, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 20% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the
Portfolio to withhold 20% of your taxable distributions and redemptions.
INVESTMENT POLICIES
PORTFOLIO SECURITIES. Under normal conditions, 90% of the Portfolio's
assets will be invested in securities of companies which compose the Index.
Should the Portfolio's assets drop to below $20 million, the assets
invested in such securities may drop to as low as 65%. Standard &
Poor's Corporation (Standard & Poor's) selects the 500 common stocks,
most of which are listed on the NYSE, to be included in the Index on the
basis of statistics such as the viability of a particular company, the
extent to which a company represents the industry group to which it is
assigned, the extent to which the market price of a company's common stock
generally is responsive to changes in the affairs of a respective industry,
and the market value and trading activity of the common stock of a company.
Standard & Poor's may, from time to time, add and delete stocks from
the Index. Inclusion of a stock in the Index in no way implies an opinion
by Standard & Poor's as to its attractiveness as an investment, nor is
Standard & Poor's a sponsor or in any other way affiliated with the
Portfolio. At some time in the future the Adviser may, subject to
shareholders' approval and 30 days' notice, select another index if such a
standard of comparison is deemed to be more representative of the
performance of U.S. common stocks.
In the normal course of managing the Portfolio, FMR may invest a portion of
the Portfolio's assets in high quality short-term money market instruments
including U.S. government securities, domestic and foreign money market
securities, such as commercial paper, bankers' acceptances, repurchase
agreements and time deposits, when the Portfolio has monies not yet
invested or so that the Portfolio will be prepared to meet redemption
requests. This position normally would be no more than 10% of the
Portfolio's net assets.
In addition the Portfolio may invest in warrants.
TRACKING THE INDEX. The Portfolio attempts to duplicate the investment
results of the S&P 500 Index through an investment technique known as
"weighting." The weighting of stocks in the Index is based on each stock's
relative total market value, its market price per share times the number of
shares outstanding. The Adviser generally selects stocks for the Portfolio
in order of their weightings in the Index, beginning with the
heaviest-weighted stocks. The percentage of the Portfolio's assets to be
invested in each stock is approximately the same as the percentage it
represents in the Index. As the size of the Portfolio increases, the
Portfolio may purchase a larger number of stocks included in the Index,
thereby representing a greater percentage of the total market
capitalization of all stocks included in the Index. As a result, the
percentage of the Portfolio's assets invested in most stocks included in
the Index may approach the percentage that each such stock represents in
the Index.
The Adviser believes that with total assets of $20 million or more, the
Portfolio will duplicate the investment results of the S&P 500 Index
with a relatively small margin of tracking error. At that asset level, the
Portfolio will seek a correlation between its performance and that of the
Index of .98 or better; a figure of 1.00 would indicate perfect
correlation. The Portfolio's ability to duplicate the performance of the
Index will depend to some extent on the cash flow relative to the
Portfolio's size. The Adviser will make investment changes to accommodate
cash flow in order to maintain, to the maximum practicable extent, the
similarity of the Portfolio to the Index.
The Portfolio may compensate for the omission from its portfolio of
illiquid or other stocks that are included in the S&P 500 Index, or for
purchasing stocks included in the Index in proportions which are less than
their weightings in the Index, by purchasing stocks (which may or may not
be included in the Index) with a combination of characteristics similar to
omitted stocks. Such characteristics include those from the same or similar
industry groups and with similar market capitalizations, which are believed
to cause stock prices generally to move together.
The Adviser will not attempt to manage the Portfolio's assets in the
traditional investment sense using economic, financial and market analysis
to select undervalued stocks or stocks of companies which may experience
above-average growth. Similarly, the adverse financial situation of a
company will not directly result in its elimination from the Portfolio
unless, of course, the company is removed from the Index. The Portfolio
reserves the right, without obligation, to remove an investment from the
Portfolio following objective criteria if, in the judgment of the Adviser,
the merit of the investment has been substantially impaired by
extraordinary events or financial conditions. From time to time,
adjustments may be made in the Portfolio because of mergers, tender offers,
changes in the composition of the Index and similar reasons, but such
changes should be infrequent.
OPTIONS AND FUTURES CONTRACTS. The Portfolio may purchase and sell stock
index futures contracts, options and options on futures, in addition to its
common stock investments. The Portfolio may purchase and sell stock index
futures and options to manage cash flow and to attempt to remain fully
invested, instead of or in addition to buying and selling stocks.
Some options and futures strategies expose the Portfolio to stock market
changes when it is not fully invested in stocks. Other strategies hedge
against stock price fluctuations. When the Portfolio has cash from new
investments in its portfolio or holds a portion of its assets in money
market instruments, it may enter into stock index futures or options to
attempt to increase its exposure to the stock market. Strategies the
Portfolio could use to accomplish this include purchasing futures
contracts, writing put options, and purchasing call options. When the
Portfolio wishes to sell securities, because of shareholder redemptions or
otherwise, it may use stock index futures or options to hedge against
market risk until the sale can be completed. These strategies could include
selling futures contracts, writing call options, and purchasing put
options.
FMR will choose among futures and options strategies based on its judgement
of how best to meet the Portfolio's goals. In selecting futures and
options, FMR will assess such factors as current and anticipated stock
prices, relative liquidity and price levels in the options and futures
markets compared to the securities markets, and the Portfolio's cash flow
and cash management needs. If FMR judges these factors incorrectly, or if
price changes in the Portfolio's futures and options positions are not well
correlated with those of its other investments, the Portfolio could be
hindered in the pursuit of its objective and could suffer losses. The
Portfolio also could be exposed to risks if it could not close out its
futures or options positions because of an illiquid secondary market.
The Portfolio intends to use stock index futures contracts and options in
only a portion of its portfolio, not to exceed 35% of its total assets. FMR
expects that the underlying index value of futures and options held by the
Portfolio will be less than 10% of assets, except in unusual cash flow
situations.
INTERFUND LENDING PROGRAM. The Portfolio has received permission from the
SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. The Portfolio
will lend through the program only when the returns are higher than those
available at the same time from other short-term investments (such as
repurchase agreements), and will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. The Portfolio will
not lend more than 5% of its assets to other funds, and will not borrow
through the program if, after doing so, total outstanding borrowings would
exceed 15% of total assets. Loans may be called on one day's notice, and
the Portfolio may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
LIMITING INVESTMENT RISKS. The Adviser follows specific guidelines in
managing the Portfolio's investments which may help to reduce risk.
1. The Portfolio will not purchase a security if, as a result: (a) more
than 5% of total assets would be invested in securities of any single
issuer, or (b) the Portfolio would hold more than 10% of the outstanding
voting securities of such issuer, except that up to 25% of the Portfolio's
assets may be invested without regard to these limitations.
2. The Portfolio will not purchase the securities of any issuer if, as a
result, more than 25% of the Portfolio's total assets (taken at current
value) would be invested in the securities of issuers having their
principal business activities in the same industry.
3. The Portfolio (a) may borrow money from banks or from other funds
advised by the Adviser for temporary or emergency purposes in an aggregate
amount not exceeding 33 1/3% of the value of total assets; (b) may engage
in reverse repurchase agreements; and (c) may not purchase any security
while borrowings representing more than 5% of net its assets are
outstanding.
4. The Portfolio temporarily may lend portfolio securities to brokers,
dealers and institutions when the loans are fully collateralized. The
Portfolio also may make cash loans to other funds advised by the Adviser.
FMR will limit all loans to 33 1/3% of total assets.
Limitations 1 and 2 do not apply to U.S. government securities. Limitations
1 and 2 and the percentage limitations on borrowing and lending in
limitations 3 and 4 are fundamental policies and may be changed only by
vote of a majority of the Portfolio's outstanding shares.
If the Portfolio borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. To this extent, purchasing
securities while borrowings are outstanding may involve an element of
leverage.
In the event of the bankruptcy of the other party to a securities loan or a
repurchase agreement, the Portfolio could experience delays in recovering
either the securities lent or its cash. To the extent that, in the
meantime, the value of the securities lent had increased, or the value of
the securities purchased had decreased, the Portfolio could experience a
loss. In all cases, the Adviser must find the creditworthiness of the other
party to the transaction satisfactory.
These limitations and the policies discussed in "Limiting Investment Risks"
are considered at the time of purchase. Except with respect to the
Portfolio's borrowing policy, the sale of securities is not required in the
event of a subsequent change in circumstances.
PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out the Portfolio's portfolio
transactions. Since FMR places a large number of transactions, including
those of Fidelity's other funds, the Portfolio pays lower commissions than
those paid by individual investors.
The Portfolio has authorized FMR to allocate transactions to some
broker-dealers who help distribute the Portfolio's shares or the shares of
Fidelity's other funds to the extent permitted by law, and on an agency
basis, to an affiliate, Fidelity Brokerage Services, Inc. (FBSI). FMR will
allocate such transactions if commissions are comparable to those charged
by non-affiliated, qualified broker-dealers for similar services. FMR also
will allocate brokerage transactions to the Portfolio's custodian so long
as transaction quality is comparable to other qualified brokers. The
custodian may credit a portion of the commissions paid toward payment of
the Portfolio's custodian charges.
Higher commissions may be paid to those firms that provide research
services to the extent permitted by law. FMR also is authorized to allocate
brokerage transactions to FBSI in order to secure from FBSI research
services produced by third party, independent entities. FMR may use this
research information in managing the Portfolio's assets, as well as assets
of other clients.
The frequency of portfolio transactions-the Portfolio's turnover rate-will
vary from year to year depending on market conditions. The Portfolio's
turnover rate for the fiscal year ended October 31, 1991 was 4%.
PERFORMANCE
The Portfolio's performance may be quoted in advertising in terms of YIELD
and TOTAL RETURN. All performance information is historical and is not
intended to indicate future performance.
TOTAL RETURNS are based on the overall dollar or percentage change in value
of a hypothetical investment in a fund. The Portfolio's total return shows
its overall change in value, including changes in share price and assuming
all the Portfolio's dividends and capital gain distributions are
reinvested. A CUMULATIVE TOTAL RETURN reflects the Portfolio's performance
over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN reflects the
hypothetical annually compounded return that would have produced the same
cumulative total return if the Portfolio's performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in the Portfolio's return, you should recognize that they are
not the same as actual year-by-year results. To illustrate the components
of overall performance, the Portfolio may separate its cumulative and
average annual returns into income results and capital gain or loss. The
Portfolio may quote its total returns on a before-tax or after-tax basis.
The Portfolio's total returns for the periods ended October 31, 1991 were
as follows:
Average Annual Cumulative
Total Returns Total Returns
One Year 33.13% 33.13%
Life of Portfolio (dagger) 15.36% 69.85%
The chart below compares the Portfolio's cumulative total returns to that
of the S&P 500 Index. The figures for the S&P 500 Index show the
change in value of the S&P 500 Index and assume reinvestment of all
dividends paid by the S&P 500 Index stocks. Tax consequences are not
included in the illustration, nor are brokerage or other fees calculated in
the S&P 500 figures.
Fidelity U.S. S&P 500
Equity Index Cumulative
Period Cumulative Total Return Total Return
One Year 33.13% 33.50%
Life of Portfolio (dagger) 69.85% 71.87%
____________
(dagger) The Portfolio commenced operations on February 17, 1988.
If the Adviser had not reimbursed certain Portfolio expenses during these
periods, the total returns would have been lower.
MANAGEMENT CONTRACT, DISTRIBUTION PLAN AND SERVICE AGREEMENTS
For managing its investments and business affairs, the Portfolio pays a
monthly management fee to FMR at the annual rate of .28% of the average net
assets of the Portfolio. One-twelfth of this annual fee rate is applied to
the net assets averaged over the most recent month, giving a dollar amount
which is the management fee for that month.
FMR has voluntarily agreed, subject to revision or termination on 90 days'
notice to shareholders, to reimburse the Portfolio if and to the extent
that any of the Portfolio's aggregate operating expenses (including the
management fee, but generally excluding interest, taxes, brokerage
commissions and extraordinary expenses) exceed an annual rate of .28% of
the average net assets of the Portfolio for any fiscal year or for a
portion of such year if FMR's agreement is terminated or revised before a
year end. Such reimbursements have the effect of decreasing the Portfolio's
expenses thereby increasing the Portfolio's total return. If this policy
were not in effect, aggregate operating expenses for the Portfolio would
have been .67% of the Portfolio's average net assets for the fiscal year
ended October 31, 1991.
The Portfolio has adopted a Distribution and Service Plan (the Plan) under
Rule 12b-1 of the Investment Company Act of 1940. No separate payments are
authorized to be made by the Portfolio under the Plan. Rather, the Plan
recognizes that FMR may use its management fee or other resources to pay
expenses associated with activities primarily intended to result in the
sale of the Portfolio's shares. It also provides that FMR may make payments
from these sources to third parties, such as banks or broker-dealers, that
provide shareholder support services or engage in the sale of Portfolio
shares.
Distributors may, at its own expense, provide promotional incentives to
Qualified Recipients who support the sale of shares of the Portfolio
without reimbursement from the Portfolio. Qualified Recipients are
securities dealers who have sold the Portfolio's shares, or other entities,
including banks and other financial institutions that have special
arrangements in connection with Distributors' sales activities. In some
instances, these incentives may be offered only to certain institutions
whose representatives have sold or are expected to sell significant amounts
of shares.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or a fund were prevented from
continuing these arrangements, it is expected that the Board of Trustees
would make other arrangements for these services and that shareholders
would not suffer adverse financial consequences. In addition, state
securities laws on this issue may differ from the interpretations of
federal law expressed herein, and banks and other financial institutions
may be required to register as dealers pursuant to state laws.
Fidelity Investments Institutional Operations Company, 82 Devonshire
Street, Boston, Massachusetts 02109, an affiliate of FMR, is transfer and
shareholders' servicing agent for the Portfolio and maintains shareholder
records. The Portfolio pays FIIOC transfer agent fees based on the type,
size and number of accounts in the Portfolio and the number of monetary
transactions made by shareholders.
Fidelity Service Co., 82 Devonshire Street, Boston, Massachusetts 02109, an
affiliate of FMR, calculates the Portfolio's daily share price, maintains
its general accounting records and administers the Portfolio's securities
lending program. The fees for pricing and bookkeeping services are based on
the Portfolio's average net assets, but must fall within a range of $45,000
to $750,000. The fees for securities lending services are based on the
number and duration of individual securities loans.
FIDELITY U.S. EQUITY INDEX PORTFOLIO AND THE FIDELITY ORGANIZATION.
Fidelity U.S. Equity Index Portfolio is a diversified Portfolio of Fidelity
Institutional Trust (the Trust), an open-end management investment company
established as a Massachusetts business trust on July 21, 1987. The Trust's
Board of Trustees supervises the Portfolio's activities and reviews
contractual arrangements with companies that provide the Portfolio with
services.
As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings, although special meetings may be called for a
specific portfolio or the Trust as a whole, for purposes such as electing
or removing Trustees, changing fundamental investment policies or
limitations, or approving a management contract. As a shareholder you
receive one vote for each full share and fractional votes for fractional
shares of the portfolio you own. Separate votes are taken by each portfolio
if a matter affects just that portfolio.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, MA 02109. It includes a number of different
subsidiaries and divisions which provide a variety of financial services
and products. The Portfolio employs various Fidelity companies to perform
certain activities required to operate the Portfolio.
Fidelity Management & Research Company is the original Fidelity
company, founded in 1946. It provides a number of mutual funds and other
clients with investment research and portfolio management services. It
maintains a large staff of experienced investment personnel and a full
complement of related support facilities. As of November 30, 1991, FMR
advised funds having more than 8.5 million shareholder accounts with a
total value of more than $135 billion. Distributors distributes shares for
the Fidelity funds. FMR Corp. is the parent company for the Fidelity
companies. Through ownership of voting common stock, Edward C. Johnson 3d,
President and a Trustee of the Trust, and various trusts for the benefit of
Johnson family members form a controlling group with respect to FMR Corp.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1993
(SHOWING PERCENTAGE OF TOTAL VALUE OF
INVESTMENTS)
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - 92.2%
AEROSPACE AND DEFENSE - 1.4%
AEROSPACE AND DEFENSE - 1.0%
Boeing Co. 148,019 $ 5,106,656
General Dynamics Corp. 13,250 1,560,188
Grumman Corp. 14,938 464,945
Lockheed Corp. 26,577 1,564,721
Martin Marietta Corp. 20,562 1,434,200
McDonnell Douglas Corp. 16,947 896,073
Northrop Corp. 20,554 691,128
Rockwell International Corp. 96,622 2,838,271
14,556,182
DEFENSE ELECTRONICS - 0.4%
E-Systems, Inc. 14,136 517,731
Loral Corp. 16,728 853,128
Raytheon Co. 59,366 3,220,606
TRW, Inc. 27,269 1,588,419
6,179,884
TOTAL AEROSPACE AND DEFENSE 20,736,066
BASIC INDUSTRIES - 6.7%
CHEMICALS AND PLASTICS - 3.8%
Air Products & Chemicals, Inc. 49,628 2,183,580
Avery Dennison Corp. 27,451 713,726
Dow Chemical Co. 120,186 6,565,160
du Pont (E.I.) de Nemours & Co. 296,440 13,747,405
Engelhard Corp. 29,753 1,294,256
Ethyl Corp. 52,244 1,430,180
FMC Corp. (a) 15,953 741,815
First Mississippi Corp. 8,823 84,921
Goodrich (B.F.) Company 11,129 477,156
Grace (W.R.) & Co. 39,598 1,465,126
Great Lakes Chemical Corp. 31,100 2,418,025
Hercules, Inc. 19,762 1,368,519
Minnesota Mining & Manufacturing Co. 96,065 10,134,858
Monsanto Co. 53,678 2,744,288
Morton International, Inc. 21,155 1,377,719
NL Industries, Inc. 22,192 110,960
Nalco Chemical Co. 31,000 1,135,375
PPG Industries, Inc. 46,535 3,082,944
Praxair, Inc. 56,995 976,039
Quantum Chemical Corp. (a) 13,432 183,011
Raychem Corp. 17,500 754,688
Rohm & Haas Co. 29,880 1,733,040
Union Carbide Corp. 57,095 956,341
55,679,132
IRON AND STEEL - 0.3%
Armco, Inc. (a) 45,201 $ 339,008
Bethlehem Steel Corp. (a) 39,575 672,775
Inland Steel Industries, Inc. (a). 15,739 348,225
Nucor Corp. 19,250 1,667,531
USX-U.S. Steel Group 25,916 965,371
Worthington Industries, Inc. 25,900 686,350
4,679,260
NONFERROUS METALS AND MINING - 0.7%
AMAX, Inc. 38,546 717,919
ASARCO, Inc. 18,045 457,892
Alcan Aluminium Ltd. 98,515 1,891,412
Aluminum Co. of America 37,403 2,622,885
Cyprus Minerals Co. 20,600 697,825
Inco Ltd. 47,576 1,117,991
Phelps Dodge Corp. 30,672 1,564,272
Reynolds Metals Co. 26,362 1,377,415
10,447,611
PACKAGING AND CONTAINERS - 0.2%
Ball Corp. 11,806 416,162
Bemis Co., Inc. 22,660 586,328
Crown Cork & Seal Co., Inc. (a) 38,608 1,433,322
2,435,812
PAPER AND FOREST PRODUCTS - 1.7%
Boise Cascade Corp. 16,536 398,931
Champion International Corp. 40,611 1,238,636
Federal Paper Board Co., Inc. 18,644 484,744
Georgia-Pacific Corp. 38,523 2,523,257
International Paper Co. 53,923 3,464,553
James River Corp. of Virginia 36,059 676,106
Kimberly-Clark Corp. 70,400 3,942,400
Louisiana-Pacific Corp. 24,031 1,724,224
Mead Corp. 25,673 1,126,403
Potlatch Corp. 12,631 625,235
Scott Paper Co. 32,284 1,234,863
Stone Container Corp. 30,727 472,428
Temple-Inland, Inc. 24,020 1,161,968
Union Camp Corp. 30,386 1,390,160
Westvaco Corp. 29,376 1,024,488
Weyerhaeuser Co. 89,838 3,739,507
25,227,903
TOTAL BASIC INDUSTRIES 98,469,718
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
CONGLOMERATES - 1.1%
Allied-Signal, Inc. 62,376 $ 4,109,019
Crane Co. 13,603 360,480
Dial Corp. (The) 20,400 864,450
Harris Corp. 17,048 622,252
ITT Corp. 50,165 3,793,728
Litton Industries, Inc. (a) 17,960 904,735
Teledyne, Inc. 24,070 490,426
Textron, Inc. 38,301 1,670,881
Tyco Laboratories, Inc. 20,500 894,313
United Technologies Corp. 54,053 2,418,872
Whitman Corp. 47,230 673,028
16,802,184
CONSTRUCTION AND REAL ESTATE - 0.6%
BUILDING MATERIALS - 0.3%
Armstrong World Industries, Inc. 16,155 523,018
Masco Corp. 67,054 2,154,110
Owens-Corning Fiberglass Corp. (a) 18,246 805,105
Sherwin-Williams Co. 38,504 1,261,006
4,743,239
CONSTRUCTION - 0.2%
Centex Corp. 13,238 413,688
Fluor Corp. 35,592 1,597,191
Kaufman & Broad Home Corp. 15,393 286,695
Morrison-Knudsen Corp. 13,400 286,425
PHM Corp. 11,828 341,534
Skyline Corp. 4,913 106,244
3,031,777
ENGINEERING - 0.1%
EG&G, Inc. 24,864 562,548
Foster Wheeler Corp. 15,441 463,230
1,025,778
TOTAL CONSTRUCTION AND REAL ESTATE 8,800,794
DURABLES - 3.6%
AUTOS, TIRES, AND ACCESSORIES - 2.7%
Chrysler Corp. 143,512 5,686,663
Cooper Tire & Rubber Co. 36,500 1,213,625
Cummins Engine Co., Inc. 7,587 649,637
Dana Corp. 20,352 923,472
Eaton Corp. 15,049 1,190,752
Echlin, Inc. 24,965 602,281
Ford Motor Co. 214,113 9,822,434
General Motors Corp. 310,232 11,633,700
Genuine Parts Company 50,588 $ 1,783,227
Goodyear Tire & Rubber Co. 31,366 2,109,364
Johnson Controls, Inc. 17,444 815,507
Navistar International Corp. (a) 111,673 321,060
PACCAR, Inc. 14,742 880,835
Pep Boys - Manny, Moe & Jack 26,300 644,350
SPX Corp. 6,214 110,299
Snap-on Tools Corp. 18,848 631,408
39,018,614
CONSUMER ELECTRONICS - 0.3%
Black & Decker Corp. 36,468 665,541
Fedders Corp. (a) 8,115 53,762
Maytag Co. 46,990 628,491
Newell Co. 34,100 1,253,175
Stanley Works 19,901 838,330
Whirlpool Corp. 30,981 1,533,560
4,972,859
FURNITURE - 0.0%
Bassett Furniture Industries, Inc. 5,065 260,848
TEXTILES AND APPAREL - 0.6%
Hartmarx Corp. (a) 13,424 90,612
Liz Claiborne, Inc. 36,501 1,254,722
NIKE, Inc. Class B 34,100 2,455,200
Oshkosh B'Gosh, Inc. Class A 6,617 110,835
Reebok International Ltd. 40,231 1,433,229
Russell Corp. 18,146 589,745
Springs Industries, Inc. Class A 7,821 324,572
Stride Rite Corp. 22,200 424,575
VF Corp. 26,016 1,304,052
7,987,542
TOTAL DURABLES 52,239,863
ENERGY - 9.4%
COAL - 0.1%
Eastern Enterprises Co. 10,127 287,354
Pittston Company 16,148 232,128
Westmoreland Coal Co. 3,010 27,090
546,572
ENERGY SERVICES - 0.8%
Baker Hughes, Inc. 61,295 1,432,771
Dresser Industries, Inc. 59,376 1,113,300
Halliburton Co. 47,323 1,662,220
Helmerich & Payne, Inc. 11,028 300,513
McDermott International, Inc. 22,443 580,713
Rowan Companies, Inc. (a) 31,982 275,845
Schlumberger Ltd. 105,300 6,278,513
11,643,875
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
ENERGY - CONTINUED
OIL AND GAS - 8.5%
Amerada Hess Corp. 40,798 $ 2,090,898
Amoco Corp. 217,898 12,284,000
Ashland Oil, Inc. 26,600 718,200
Atlantic Richfield Co. 69,308 8,273,643
Chevron Corp. 149,698 11,526,746
Exxon Corp. 545,959 34,736,641
Kerr-McGee Corp. 21,056 976,472
Louisiana Land & Exploration Co. 12,336 468,768
Maxus Energy Corp. (a) 56,604 509,436
Mobil Corp. 175,478 11,822,830
Occidental Petroleum Corp. 132,838 2,689,970
Oryx Energy Co. 42,726 886,565
Pennzoil Co. 17,648 1,014,760
Phillips Petroleum Co. 114,066 3,208,106
Royal Dutch Petroleum Co. 235,524 19,636,814
Santa Fe Energy Resources, Inc. 38,932 394,187
Sun Company, Inc. 46,926 1,272,868
Texaco, Inc. 112,832 7,066,104
USX-Marathon Group 124,882 2,357,148
Unocal Corp. 105,772 2,921,952
124,856,108
TOTAL ENERGY 137,046,555
FINANCE - 10.2%
BANKS - 4.8%
Banc One Corp. 101,664 5,337,360
Bank of Boston Corp. 36,806 956,956
Bankers Trust New York Corp. 36,289 2,435,899
BankAmerica Corp. 152,935 8,105,555
Barnett Banks, Inc. 43,144 1,979,231
Boatmen's Bancshares, Inc. 21,200 1,181,900
Chase Manhattan Corp. 66,527 2,095,601
Chemical Banking Corp. 108,527 4,395,344
Citicorp (a) 160,137 4,243,631
CoreStates Financial Corp. 25,600 1,424,000
First Chicago Corp. 35,598 1,575,212
First Fidelity Bancorporation 31,306 1,526,168
First Interstate Bancorp 35,532 1,865,430
First Union Corp. 58,097 2,730,559
Fleet Financial Group, Inc. 54,491 1,791,392
Mellon Bank Corp. 23,087 1,396,764
Morgan (J.P.) & Co., Inc. 84,694 5,558,044
NationsBank Corp. 108,239 5,790,787
Norwest Corp. 61,702 $ 2,869,143
NBD Bancorp, Inc. 69,843 2,435,775
PNC Financial Corp. 101,268 3,139,308
Shawmut National Corp. (a) 39,900 852,863
SunTrust Banks, Inc. 55,200 2,539,200
U.S. Bancorp 43,550 1,137,744
Wells Fargo & Co. 22,963 2,307,782
69,671,648
CREDIT AND OTHER FINANCE - 0.8%
American Express Co. 209,491 5,132,530
Beneficial Corp. 11,227 752,209
Household International, Inc. 18,067 1,181,130
MBNA Corp. 43,800 1,155,225
Primerica Corp. 50,462 2,769,104
Transamerica Corporation 34,488 1,664,046
12,654,244
FEDERAL SPONSORED CREDIT - 0.9%
Federal Home Loan Mortgage Corporation 80,400 3,688,350
Federal National Mortgage Association 120,200 9,420,675
13,109,025
INSURANCE - 3.1%
Aetna Life & Casualty Co. 48,632 2,395,126
Alexander & Alexander Services, Inc. 18,200 475,475
American General Corp. 47,554 2,787,853
American International Group, Inc. 93,112 11,371,303
CIGNA Corp. 31,394 1,934,655
CNA Financial Corp. (a) 26,974 2,528,813
Capital Holding Corp. 20,456 1,567,441
Chubb Corp. (The) 39,094 3,572,214
Continental Corp. 24,271 640,148
General Re Corp. 38,100 4,462,463
Jefferson Pilot Corp. 22,619 1,142,260
Lincoln National Corp. 18,250 1,336,813
Marsh & McLennan Companies, Inc. 31,487 2,983,393
SAFECO Corp. 27,378 1,731,659
St. Paul Companies, Inc. (The) 18,354 1,424,729
Torchmark Corp. 32,150 1,937,038
Travelers Corp. (The) 62,817 1,680,355
USF&G Corp. 37,189 511,349
USLIFE Corp. 10,031 403,748
44,886,835
SAVINGS AND LOANS - 0.2%
Ahmanson (H.F.) & Co. 50,814 1,054,391
Golden West Financial Corp. 27,800 1,317,025
Great Western Financial Corp. 57,312 1,031,616
3,403,032
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.4%
Merrill Lynch & Co., Inc. 45,027 $ 3,073,093
Salomon, Inc. 51,053 2,054,883
5,127,976
TOTAL FINANCE 148,852,760
HEALTH - 7.8%
DRUGS AND PHARMACEUTICALS - 5.2%
ALZA Corp. Class A (a) 32,700 1,001,438
Allergan, Inc. 29,800 644,425
American Cyanamid Co. 39,806 1,950,494
American Home Products Corp. 137,042 8,291,041
Amgen, Inc. (a) 59,400 2,153,250
Bristol-Myers Squibb Co. 228,014 12,968,296
IMCERA Group, Inc. 32,296 923,964
Lilly (Eli) & Co. 128,824 6,634,436
Merck & Co., Inc. 506,931 19,516,844
Pfizer, Inc. 143,984 8,405,066
Schering-Plough Corp. 88,074 5,031,227
Syntex Corporation 98,976 1,868,172
Upjohn Co. 76,818 2,189,313
Warner-Lambert Co. 59,368 3,918,288
75,496,254
MEDICAL EQUIPMENT AND SUPPLIES - 2.4%
Abbott Laboratories 370,656 9,683,388
Bard (C.R.), Inc. 22,968 660,330
Bausch & Lomb, Inc. 26,270 1,366,040
Baxter International, Inc. 122,380 3,564,318
Becton, Dickinson & Co. 16,546 1,195,448
Biomet, Inc. (a) 50,700 646,425
Johnson & Johnson 286,204 12,163,670
McKesson Corp. 18,247 770,936
Medtronic, Inc. 26,360 2,056,080
Millipore Corp. 12,600 351,225
National Intergroup, Inc. 9,025 120,709
Pall Corp. 50,728 976,514
St. Jude Medical, Inc. 20,700 698,625
U.S. Surgical Corp. 23,600 1,451,400
35,705,108
MEDICAL FACILITIES MANAGEMENT - 0.2%
Beverly Enterprises, Inc. (a) 32,267 358,970
Community Psychiatric Centers 19,254 206,981
Humana, Inc. 69,871 1,345,017
Manor Care, Inc. 25,420 514,755
National Medical Enterprises, Inc. 73,174 686,006
3,111,729
TOTAL HEALTH 114,313,091
INDUSTRIAL MACHINERY AND EQUIPMENT - 5.1%
ELECTRICAL EQUIPMENT - 3.1%
Corning, Inc. 84,316 $ 2,803,507
Emerson Electric Co. 98,773 5,741,181
General Electric Co. 375,265 31,569,168
General Signal Corp. 8,886 575,369
Grainger (W.W.), Inc. 23,266 1,282,538
Honeywell, Inc. 60,600 1,999,800
Westinghouse Electric Corp. 150,834 2,036,259
Zenith Electronics Corp. (a) 12,730 95,475
46,103,297
INDUSTRIAL MACHINERY AND EQUIPMENT - 1.2%
Briggs & Stratton Corp. 6,517 404,869
Caterpillar, Inc. 44,515 2,581,870
Cincinnati Milicron, Inc. 12,328 254,265
Clark Equipment Co. (a) 7,820 182,793
Cooper Industries, Inc. 49,514 2,463,322
Deere & Co. 33,779 1,756,508
Dover Corp. 25,278 1,197,545
Giddings & Lewis, Inc. 13,400 368,500
Harnischfeger Industries, Inc. 12,900 232,200
Illinois Tool Works, Inc. 24,660 1,794,015
Ingersoll-Rand Co. 46,022 1,587,759
Interlake, Inc. (a) 9,514 38,056
NACCO Industries, Inc. Class A 3,910 199,899
Parker-Hannifin Corp. 21,453 694,541
TRINOVA Corp. 12,640 328,640
Tenneco, Inc. 54,849 2,571,047
Timken Co. 13,096 389,621
Varity Corp. (a) 13,059 367,284
17,412,734
POLLUTION CONTROL - 0.8%
Browning-Ferris Industries, Inc. 74,270 1,996,006
Ogden Corp. 19,145 421,190
Rollins Environmental Services, Inc. 26,324 207,302
Safety Kleen Corp. 25,107 552,354
Waste Management, Inc. 214,747 7,650,362
Zurn Industries, Inc. 5,514 197,126
11,024,340
TOTAL INDUSTRIAL MACHINERY
AND EQUIPMENT 74,540,371
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
MEDIA AND LEISURE - 4.3%
BROADCASTING - 0.7%
CBS, Inc. 6,111 $ 1,219,908
Capital Cities/ABC, Inc. 7,389 3,642,777
Comcast Corp.:
Class A 56,252 1,272,702
Class A (Special) 10,000 206,250
Tele-Communications, Inc., Class A (a) 185,752 4,365,172
10,706,809
ENTERTAINMENT - 1.3%
Disney (Walt) Co. 230,712 10,266,684
King World Productions, Inc. (a) 16,550 548,219
Paramount Communications, Inc. 52,242 2,507,616
Time Warner, Inc. 163,523 5,661,984
18,984,503
LEISURE DURABLES AND TOYS - 0.3%
Brunswick Corp. 42,003 661,547
Fleetwood Enterprises, Inc. 10,227 443,596
Hasbro, Inc. 37,941 1,157,201
Mattel, Inc. 42,239 913,418
Outboard Marine Corp. 8,823 177,563
3,353,325
LODGING AND GAMING - 0.2%
Bally Manufacturing Corp. (a) 22,833 148,415
Hilton Hotels Corp. 21,158 973,268
Marriott Corp. 44,340 1,086,330
Promus Companies, Inc. (a) 14,731 835,984
3,043,997
PUBLISHING - 1.2%
American Greetings Corp. Class A 15,800 758,400
Dow Jones & Co Inc. 44,313 1,334,929
Dun & Bradstreet Corp. 78,120 4,452,840
Gannett Co., Inc. 63,588 3,195,297
Knight-Ridder, Inc. 24,167 1,446,999
McGraw-Hill, Inc. 21,359 1,257,511
Meredith Corp. 6,922 205,064
New York Times Co. (The) Class A 34,395 984,557
Times Mirror Co., Series A 56,350 1,915,900
Tribune Co. 28,692 1,509,917
17,061,414
RESTAURANTS - 0.6%
Luby's Cafeterias, Inc. 12,306 $ 256,888
McDonald's Corp. 158,542 7,986,553
Ryan's Family Steak Houses, Inc. (a) 23,200 226,200
Shoney's, Inc. (a) 18,442 405,724
Wendy's International, Inc. 43,162 561,106
9,436,471
TOTAL MEDIA AND LEISURE 62,586,519
NONDURABLES - 12.1%
BEVERAGES - 3.4%
Anheuser-Busch Companies, Inc. 121,484 6,696,806
Brown-Forman Corp. Class B 12,387 963,089
Coca-Cola Company (The) 575,748 24,397,322
Coors (Adolph) Co. Class B 16,342 273,729
PepsiCo, Inc. 350,309 13,968,571
Seagram Co. Ltd. 165,144 4,227,518
50,527,035
FOODS - 3.5%
Archer-Daniels-Midland Co. 143,387 3,799,756
Borden, Inc. 61,972 1,572,540
CPC International, Inc. 66,290 3,181,920
Campbell Soup Co. 110,602 4,686,760
ConAgra, Inc. 108,129 3,014,096
General Mills, Inc. 72,206 4,991,240
Gerber Products Co. 32,392 1,052,740
Heinz (H.J.) Co. 110,998 4,925,536
Hershey Foods Corp. 39,805 2,084,787
Kellogg Co. 104,688 6,700,032
Pet, Inc. 47,530 760,480
Quaker Oats Co. 32,493 2,242,017
Ralston Purina Co. 45,460 2,255,953
SYSCO Corp. 82,108 2,032,173
Sara Lee Corp. 210,716 6,137,104
Wrigley (Wm.) Jr. Company 51,244 1,665,430
51,102,564
HOUSEHOLD PRODUCTS - 2.8%
Alberto Culver Co. Class B 12,432 315,462
Avon Products, Inc. 31,782 1,906,920
Clorox Co. 23,762 1,107,903
Colgate-Palmolive Co. 69,858 4,348,661
Gillette Company 96,646 5,762,518
International Flavors & Fragrances, Inc. 16,744 1,825,096
Premark International, Inc. 14,200 667,400
Procter & Gamble Co. 299,078 15,552,056
Rubbermaid, Inc. 70,270 2,266,208
Unilever NV ADR 70,186 8,053,844
41,806,068
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
NONDURABLES - CONTINUED
TOBACCO - 2.4%
American Brands, Inc. 90,156 $ 3,110,382
Philip Morris Companies, Inc. 395,218 26,529,008
UST, Inc. 92,460 2,577,323
32,216,713
TOTAL NONDURABLES 175,652,380
PRECIOUS METALS - 0.2%
Echo Bay Mines Ltd. 46,500 241,790
Homestake Mining Co. 60,310 723,720
Newmont Mining Corp. 30,177 1,173,131
Placer Dome Inc. 103,935 1,392,673
3,531,314
RETAIL AND WHOLESALE - 7.0%
APPAREL STORES - 0.7%
Brown Group, Inc. 7,821 239,518
Charming Shoppes, Inc. 45,016 680,867
Gap, Inc. 62,764 2,039,830
Genesco, Inc. (a) 10,118 104,974
Limited, Inc. (The) 159,440 4,045,790
Melville Corp. 46,126 2,248,643
TJX Companies, Inc. 30,466 864,473
10,224,095
DRUG STORES - 0.2%
Long Drug Stores, Inc. 9,025 323,772
Rite Aid Corporation 38,496 760,296
Walgreen Co. 54,244 2,115,516
3,199,584
GENERAL MERCHANDISE STORES - 4.2%
Dayton Hudson Corp. 31,516 2,430,672
Dillard Department Stores, Inc. Class A 49,361 2,190,394
General Cinema Corp. 36,898 1,268,369
K mart Corp. 177,168 4,141,302
May Department Stores Co. (The) 54,715 3,939,480
Mercantile Stores Co., Inc. 15,993 559,755
Nordstrom, Inc. 35,794 1,181,202
Penney (J.C.) Co., Inc. 51,662 4,178,164
Sears, Roebuck and Co. 151,640 8,036,920
Wal-Mart Stores, Inc. 1,011,028 32,858,410
Woolworth Corp. 57,352 1,663,208
62,447,876
GROCERY STORES - 0.7%
Albertson's, Inc. 58,256 $ 3,007,466
American Stores Co. 30,870 1,161,484
Bruno's, Inc. 34,600 410,875
Fleming Companies, Inc. 15,888 530,262
Giant Food, Inc. Class A 25,970 548,616
Great Atlantic & Pacific Tea Co., Inc. 17,044 398,404
Kroger Co. (The) (a) 39,094 635,278
Supervalu, Inc. 31,087 1,002,556
Winn-Dixie Stores, Inc. 33,596 2,297,127
9,992,068
RETAIL, MISCELLANEOUS - 1.2%
Circuit City Stores, Inc. 20,900 992,750
Handleman Co. (Del.) 14,811 224,016
Home Depot, Inc. (The) 145,175 9,218,613
Lowe's Companies, Inc. 32,292 920,322
Price Co. (The) (a) 20,657 692,010
Tandy Corp. 28,065 705,133
Toys "R" Us, Inc. (a) 127,750 4,966,281
17,719,125
TOTAL RETAIL AND WHOLESALE 103,582,748
SERVICES - 0.9%
ADVERTISING - 0.0%
Interpublic Group of Companies, Inc. 33,200 1,020,900
LEASING AND RENTAL - 0.2%
Blockbuster Entertainment Corp. 82,800 1,459,350
Ryder Systems, Inc. 32,791 959,137
2,418,487
PRINTING - 0.4%
Alco Standard Corp. 20,534 859,861
Deluxe Corp. 36,799 1,591,557
Donnelley (R.R.) & Sons Co. 67,982 1,988,474
Harland (John H.) Co. 15,100 388,825
Moore Corporation Ltd. 41,707 713,161
5,541,878
SERVICES - 0.3%
Block (H&R), Inc. 46,320 1,922,280
Ecolab, Inc. 13,600 513,400
JWP, Inc. (a) 18,200 79,625
Jostens, Inc. 19,700 534,363
National Education Corp. (a) 13,000 89,375
National Service Industries, Inc. 21,957 592,839
Service Corp. International 33,832 630,121
4,362,003
TOTAL SERVICES 13,343,268
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
TECHNOLOGY - 6.3%
COMMUNICATIONS EQUIPMENT - 0.4%
Andrew Corp. (a) 3,612 $ 174,279
DSC Communications Corp. (a) 18,646 487,127
M/A-Com, Inc. (a) 10,536 57,948
Northern Telecom Ltd. 108,475 4,751,015
Scientific-Atlanta, Inc. 15,390 313,571
5,783,940
COMPUTER SERVICES AND SOFTWARE - 0.9%
Autodesk, Inc. 10,700 510,925
Automatic Data Processing, Inc. 61,380 3,306,848
Ceridian Corp. 18,848 275,652
Computer Associates International, Inc. 75,351 1,940,288
Computer Sciences Corp. (a) 7,318 547,935
Lotus Development Corp. (a) 18,549 505,460
Novell, Inc. (a) 131,300 3,840,525
Oracle Systems Corp. (a) 61,500 2,014,125
Shared Medical Systems Corp. 9,729 221,335
13,163,093
COMPUTERS AND OFFICE EQUIPMENT - 2.7%
Amdahl Corp. 49,622 403,179
Apple Computer, Inc. 51,846 2,747,838
Compaq Computer Corp. (a) 33,900 1,533,975
Cray Research, Inc. (a) 11,718 316,386
Data General Corp. (a) 14,732 182,309
Digital Equipment Corp. (a) 55,947 2,664,476
Hewlett-Packard Co. 110,900 8,206,600
Intergraph Corp. (a) 20,666 247,992
International Business Machines Corp. 250,927 13,644,156
Pitney Bowes, Inc. 69,178 2,844,945
Sun Microsystems, Inc. (a) 44,600 1,566,575
Tandem Computers, Inc. (a) 48,707 621,014
Unisys Corp. (a) 71,285 882,152
Xerox Corp. 41,673 3,448,441
39,310,038
ELECTRONIC INSTRUMENTS - 0.1%
Perkin-Elmer Corp. 14,653 531,171
Tektronix, Inc. 13,032 324,171
855,342
ELECTRONICS - 1.6%
AMP, Inc. 46,626 2,663,510
Advanced Micro Devices, Inc. (a) 38,590 839,333
Intel Corp. 91,240 10,629,460
Motorola, Inc. 117,700 6,914,875
National Semiconductor Corp. (a) 46,620 512,820
Texas Instruments, Inc. 36,391 $ 2,056,092
Thomas & Betts Corp. 8,120 546,070
24,162,160
PHOTOGRAPHIC EQUIPMENT - 0.6%
Eastman Kodak Co. 143,119 7,674,756
Polaroid Corp. 21,091 601,094
8,275,850
TOTAL TECHNOLOGY 91,550,423
TRANSPORTATION - 1.7%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 33,768 2,021,859
Delta Air Lines, Inc. 21,657 1,066,607
UAL Corp. (a) 10,524 1,243,148
USAir Group, Inc. (a) 20,850 328,388
4,660,002
RAILROADS - 1.2%
Burlington Northern, Inc. 38,486 1,808,842
CSX Corp. 45,429 3,180,030
Consolidated Rail Corp. 35,160 1,911,825
Norfolk Southern Corp. 61,621 3,959,149
Santa Fe Pacific Corp. 79,631 1,084,972
Union Pacific Corp. 89,144 5,237,210
17,182,028
TRUCKING AND FREIGHT - 0.2%
Consolidated Freightways, Inc. (a) 15,345 278,128
Federal Express Corp. (a) 23,961 1,350,801
Roadway Services, Inc. 17,097 1,196,790
Yellow Freight System, Inc. of Delaware 12,533 328,991
3,154,710
TOTAL TRANSPORTATION 24,996,740
UTILITIES - 13.8%
ELECTRIC UTILITY - 4.7%
American Electric Power Co., Inc. 81,425 2,900,766
Baltimore Gas & Electric Co. 62,838 1,625,933
Carolina Power & Light Co. 70,200 2,220,075
Central & South West Corp. 82,620 2,674,823
Commonwealth Edison Co. 93,740 2,577,850
Consolidated Edison Co. of New York, Inc. 103,068 3,633,147
Detroit Edison Company 64,871 2,359,683
Dominion Resources, Inc. (Va.) 70,615 3,001,138
Duke Power Co. 90,236 3,462,807
Entergy Corp. 77,238 2,799,878
FPL Group, Inc. 80,151 3,105,851
Houston Industries, Inc. 56,736 2,694,960
Niagara Mohawk Power Corp. 59,949 1,303,891
Northern States Power Co. (Minn.) 27,273 1,275,013
VALUE PRINCIPAL VALUE
SHARES (NOTE 1) AMOUNT (NOTE 1)
COMMON STOCKS - CONTINUED
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Ohio Edison Co. 66,877 $ 1,655,206
Pacific Gas & Electric Co. 187,528 6,610,362
PacifiCorp 117,600 2,131,500
Philadelphia Electric Co. 96,625 2,850,438
Public Service Enterprise Group, Inc. 102,738 3,428,881
PSI Resources, Inc. 23,963 512,209
Southern Co. 139,390 5,749,838
SCEcorp 98,053 4,780,084
Texas Utilities Co. 96,690 4,520,258
Union Electric Co. 44,800 1,803,200
69,677,791
GAS - 0.9%
Arkla, Inc. 53,500 448,063
Coastal Corp. (The) 45,429 1,169,797
Columbia Gas System, Inc. (The) (a) 22,352 514,096
Consolidated Natural Gas Co. 40,797 1,902,160
Enron Corp. 50,508 2,841,075
ENSERCH Corp. 29,466 508,289
NICOR, Inc. 12,500 679,688
ONEOK, Inc. 11,532 234,965
Pacific Enterprises (a) 32,869 690,249
Panhandle Eastern Corp. 47,707 1,031,664
Peoples Energy Corp. 15,138 491,985
Sonat, Inc. 18,747 974,844
Transco Energy Co. 17,100 256,500
Williams Companies, Inc. 19,944 875,043
12,618,418
TELEPHONE SERVICES - 8.2%
American Telephone & Telegraph Co. 587,386 32,820,193
Ameritech Corp. 118,222 8,851,872
Bell Atlantic Corp. 189,562 10,544,386
BellSouth Corp. 215,160 12,210,330
GTE Corp. 406,968 14,803,461
MCI Communications Corp. 115,031 4,601,240
NYNEX Corp. 90,138 8,225,093
Pacific Telesis Group 176,903 8,137,538
Southwestern Bell Corp. 132,049 9,837,651
Sprint Corporation 96,200 2,705,625
U.S. West, Inc. 181,642 7,969,543
120,706,932
TOTAL UTILITIES 203,003,141
TOTAL COMMON STOCKS
(Cost $1,188,063,547) 1,350,047,935
U.S. TREASURY OBLIGATIONS - 0.7%
U.S. Treasury Notes:
8 5/8%, 1/15/95 $ 2,500,000 $ 2,712,500
11 1/4%, 2/15/95 1,000,000 1,139,220
8 1/2%, 5/15/95 500,000 546,720
8 5/8%, 10/15/95 (b) 5,000,000 5,542,200
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $9,879,921) 9,940,640
MATURITY
AMOUNT
REPURCHASE AGREEMENTS - 7.1%
Investments in repurchase agreements,
(U.S.Treasury obligations), in a joint
trading account at 3.14% dated
2/26/93 due 3/1/93 $ 104,309,287 104,282,000
TOTAL INVESTMENTS - 100%
(Cost $1,302,225,468) $1,464,270,575
LEGEND:
(a) Non-income producing
(b) Security was pledged to cover margin requirements for futures
contracts.
OTHER INFORMATION:
The fund had the following futures contracts open at period end (see Note 3
of Notes to Financial Statements):
NUMBER OF AGGREGATE EXPIRATION UNREALIZED
CONTRACTS CONTRACTS FACE VALUE DATE GAIN/LOSS
Purchased:
S&P 500
Stock Index 486 $ 105,496,650 March 1993 $ 2,317,590
S&P 500
Stock Index 56 12,260,800 June 1993 176,240
$ 2,493,830
INCOME TAX INFORMATION:
At February 28, 1993, the aggregate cost of investment securities for
income tax purposes was $1,303,212,408. Net unrealized appreciation
(depreci- ation) aggregated $161,058,167, of which $209,737,398 related to
appreciated investment securities and $48,679,231 related to depreciated
investment securities.
The fund hereby designates $1,280,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
STATEMENT OF ASSETS AND LIABILITIES
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
February 28, 1993
ASSETS
Investment in securities, at value (including repurchase agreements of $104,282,000) (cost $ 1,464,270,575
$1,302,225,468)
(Notes 1 and 2) - See accompanying schedule
Cash 210
Receivable for fund shares sold 4,039,603
Dividends receivable 4,488,088
Interest receivable 203,702
Receivable for daily variation on futures contracts 435,295
Other receivables 4,326
Receivable from investment adviser - expense reimbursement (Note 6) 333,452
Total assets 1,473,775,251
LIABILITIES
Payable for fund shares redeemed $ 947,699
Accrued management fee 280,108
Other payables and accrued expenses 445,131
Total liabilities 1,672,938
NET ASSETS $ 1,472,102,313
Net Assets consist of:
Paid in capital $ 1,188,029,169
Undistributed net investment income 5,295,132
Accumulated undistributed net realized gain (loss) on investments 114,239,075
Net unrealized appreciation (depreciation) on:
Investment securities 162,045,107
Futures contracts 2,493,830
NET ASSETS, for 87,987,807 shares outstanding $ 1,472,102,313
NET ASSET VALUE, offering price and redemption price per share ($1,472,102,313 (divided by) 87,987,807 shares) $16.73
</TABLE>
STATEMENT OF OPERATIONS
DRAFT
FOUR MONTH
PERIOD ENDED YEAR ENDED
FEBRUARY 28, 1993 OCTOBER 31, 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME $ 14,358,225 $ 34,737,757
Dividends
Interest (including security lending fees of $4,783 and $3,771, 1,047,188 2,612,139
respectively) (Note 4)
Total income 15,405,413 37,349,896
EXPENSES
Management fee (Note 4) $ 1,334,064 $ 3,414,778
Transfer agent fees (Note 4) 1,470,539 3,446,657
Accounting and security lending fees (Note 4) 200,809 525,623
Non-interested trustees' compensation 3,817 7,046
Custodian fees and expenses 17,676 35,644
Registration fees 78,596 294,124
Audit 36,396 68,787
Legal 2,289 17,431
Miscellaneous 2,934 39,370
Total expenses before reimbursement 3,147,120 7,849,460
Reimbursement of expenses (Note 6) (1,813,056) 1,334,064 (4,427,985) 3,421,475
Net investment income 14,071,349 33,928,421
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES
1 AND 3)
Net realized gain (loss) on:
Investment securities 80,167,800 26,898,710
Futures contracts 3,635,920 83,803,720 184,810 27,083,520
Change in net unrealized appreciation (depreciation) on:
Investment securities (3,177,375) 43,206,898
Futures contracts 2,173,020 (1,004,355) (14,265) 43,192,633
Net gain (loss) 82,799,365 70,276,153
Net increase (decrease) in net assets resulting from operations $ 96,870,714 $ 104,204,574
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FOUR MONTHS
ENDED YEARS ENDED OCTOBER 31,
FEBRUARY 28, 1992 1991
1993
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Operations $ 14,071,349 $ 33,928,421 $ 23,832,407
Net investment income
Net realized gain (loss) on investments 83,803,720 27,083,520 9,694,823
Change in net unrealized appreciation (depreciation) on investments (1,004,355) 43,192,633 155,398,886
Net increase (decrease) in net assets resulting from operations 96,870,714 104,204,574 188,926,116
Distributions to shareholders from: (12,288,344) (33,222,396) (23,353,614)
Net investment income
Net realized gain - (10,417,240) -
Share transactions 476,652,352 1,348,834,171 781,536,045
Net proceeds from sales of shares
Reinvestment of distributions from: 11,505,440 30,898,358 21,104,385
Net investment income
Net realized gain - 9,778,815 -
Cost of shares redeemed (555,321,881) (955,834,705) (443,411,649)
Net increase (decrease) in net assets resulting from share transactions (67,164,089) 433,676,639 359,228,781
Total increase (decrease) in net assets 17,418,281 494,241,577 524,801,283
NET ASSETS
Beginning of period 1,454,684,032 960,442,455 435,641,172
End of period (including undistributed net investment income of $5,295,132, $ 1,472,102,313 $ 1,454,684,032 $ 960,442,455
$3,512,127, and $2,806,102, respectively)
OTHER INFORMATION
Shares
Sold 29,370,355 86,843,554 57,662,953
Issued in reinvestment of distributions from: 706,722 2,039,602 1,524,065
Net investment income
Net realized gain - 687,197 -
Redeemed (34,311,255) (61,524,484) (32,526,570)
Net increase (decrease) (4,234,178) 28,045,869 26,660,448
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED FEBRUARY 28, 1993
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity U.S. Equity Index Portfolio (the fund) is a fund of Fidelity
Institutional Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the Act), as an open-end management investment company
organized as a Massachusetts business trust. On November 19, 1992, the
Trustees approved a change in the fiscal year-end of the trust to February
28, 1993. Accordingly, the financial statements of the fund are presented
for the four-month period ended February 28, 1993.The following summarizes
the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except that if the ex-dividend date has passed, certain dividends from
foreign securities are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Dividend and
interest income are recorded net of foreign taxes.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
FUTURES CONTRACTS AND WRITTEN OPTIONS. The fund may invest in futures
contracts and may write options. These investments involve, to varying
degrees, elements of market risk and risks in excess of the amount
recognized in the Statement of Assets and Liabilities. The face or contract
amounts reflect the extent of the involvement the fund has in the
particular classes of instruments. Risks may be caused by an imperfect
correlation between movements in the price of the instruments and the price
of the underlying securities and interest rates. Risks also may arise if
there is an illiquid secondary market for the instruments, or due to the
inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $128,951,384 and $238,786,196 respectively. Sales of securities
also include $226,296,467 of current value of securities delivered in
redemption of fund shares.
The face value of futures contracts opened and closed amounted to
$115,485,300 and $68,227,250, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a fee that is computed daily at an annual
rate of .28% of the fund's average net assets, before reimbursement of
expenses.
TRANSFER AGENT FEE. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing
and shareholder servicing agent. FIIOC receives fees based on the type,
size, number of accounts and the number of transactions made by
shareholders. FIIOC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements.
ACCOUNTING FEE. Fidelity Service Co., an affiliate of FMR, maintains the
fund's accounting records and administers the security lending program. The
security lending fee is based on the number and duration of lending
transactions. The accounting fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $48,012,000, and $31,792,714,
respectively. The weighted average interest rate earned was 3.5%. Interest
earned from the interfund lending program amounted to $21,452 and is
included in interest income on the Statement of Operations.
6. REIMBURSEMENT OF EXPENSES.
FMR has voluntarily agreed to reimburse the fund for total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of .28% of average net assets.
For the period ended February 28, 1993 and the year ended October 31, 1992,
the reimbursements amounted to $1,813,056 and $4,427,985 respectively.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK AND FUND
SHARES ARE NOT BACKED OR GUARANTEED BY
ANY BANK OR INSURED BY THE FDIC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Fidelity U.S. Equity Index Portfolio (a portfolio of Fidelity Institutional
Trust):
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the per-share data and ratios
(included on page 3 of this Prospectus) present fairly, in all material
respects, the financial position of Fidelity U.S. Equity Index Portfolio (a
portfolio of Fidelity Institutional Trust) at February 28, 1993, the
results of its operations, the changes in its net assets, and per-share
data and ratios for the periods indicated in conformity with generally
accepted accounting principles. These financial statements and per-share
data and ratios (hereafter referred to as "financial statements") are the
responsibility of the Fidelity U.S. Equity Index Portfolio's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards, which require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities owned at February 28,
1993 by correspondence with the custodian and brokers, and the application
of alternative procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
Boston, Massachusetts
April 7, 1993
DISTRIBUTIONS
The Board of Trustees of Fidelity U.S. Equity Index Portfolio voted to pay
to shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
4/5/93 4/2/93 $.10
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Jonathan F. Weed, VICE PRESIDENT
Gary L. French, TREASURER
John H. Costello, ASSISTANT TREASURER
Arthur S. Loring, SECRETARY
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Gerald C. McDonough
Thomas R. Williams
Bertram H. Witham
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND
SHAREHOLDERS'
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA UEI-A-0493
