SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No.33-9148) UNDER THE
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 17 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. [ ]
Fidelity Institutional Trust
(Exact Name of Registrant as Specified in Declaration of Trust)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Office)
Registrant's Telephone Number: (617) 570-7000
Arthur S. Loring, Esq.
82 Devonshire Street,
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) Immediately upon filing pursuant to paragraph (b) of Rule 485
( x ) On April 29, 1994 pursuant to paragraph (b) of Rule 485
( ) 60 days after filing pursuant to paragraph (a) of Rule 485
( ) On ________ pursuant to paragraph (a) of Rule 485
Registrant intends to file a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 on or about April 29, 1994.
FIDELITY INSTITUTIONAL TRUST
TABLE OF CONTENTS
Page
Facing Sheet 1
Table of Contents 2
Fidelity U.S. Bond Index Portfolio
Cross Reference Sheets 3
Part A - Prospectus 5
Part B - Statement of Additional Information
Fidelity U.S. Equity Index Portfolio
Cross Reference Sheets
Part A - Prospectus
Part B - Statement of Additional Information
Part C and Exhibit Index
Signature Page
Exhibits
FIDELITY INSTITUTIONAL TRUST
FIDELITY U.S. BOND INDEX PORTFOLIO
CROSS REFERENCE SHEET
FORM N-1A ITEM NUMBER
PART A PROSPECTUS CAPTION
1a,b Cover Page
2a Summary of Portfolio Expenses
b,c *
3a Financial Highlights
b *
c Performance
4a(i) Fidelity U.S. Bond Index Portfolio and the Fidelity Organization
a(ii),b,c Investment Objective; Investment Policies, Risks, and
Limitations; Limiting Investment Risks
5a,b(i) Fidelity U.S. Bond Index Portfolio and the Fidelity Organization
b(ii,iii),c Management Contract, Distribution and Service Plan
d Fidelity U.S. Bond Index Portfolio and the Fidelity Organization;
Management Contract, Distribution and Service Plan
e Management Contract, Distribution Plan and Service Agreements
f Portfolio Transactions
5A Portfolio Manager Interview; Performance Update
6a(i) Fidelity U.S. Bond Index Portfolio and the Fidelity Organization
a(ii,iii) *
b Fidelity U.S. Bond Index Portfolio and the Fidelity Organization
c,d *
e How to Invest, How to Exchange, How to Redeem
f How to Invest
g Distributions and Taxes
7a Fidelity U.S. Bond Index Portfolio and the Fidelity Organization
b(i,ii) How to Invest, How to Exchange, How to Redeem
b(iii) *
b(iv) *
b(v) *
c How to Invest, How to Exchange, How to Redeem
d How to Invest, How to Exchange, How to Redeem
e Management Contract, Distribution and Service Plan
8a How to Invest, How to Exchange, How to Redeem
b *
c *
d How to Invest, How to Exchange, How to Redeem
9 *
FORM N-1A ITEM NUMBER
PART B STATEMENT OF ADDITIONAL INFORMATION CAPTION
10a,b Cover Page
11 Cover Page
12 *
13a,b,c Investment Policies and Limitations
d Portfolio Transactions
14a,b Trustees and Officers
c *
15a Trustees and Officers
b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Distribution and Service Plan
d Contracts with Companies Affiliated with FMR
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Distribution and Service Plan
17a Portfolio Transactions
b Portfolio Transactions
c Portfolio Transactions
d *
e *
18a Description of the Trust
b *
19a Additional Purchase and Redemption Information
b Valuation of Portfolio Securities
c *
20 Distribution and Taxes
21a(i,ii) Contracts with Companies Affiliated with FMR
a(iii),b,c *
22a *
b Portfolio Performance
23 Financial Statement for the fiscal period ended
February 28, 1994 are filed herein.
FIDELITY U.S. BOND INDEX PORTFOLIO 82 DEVONSHIRE STREET
A Portfolio of Fidelity Institutional Trust BOSTON, MASSACHUSETTS 02109
PROSPECTUS
Fidelity U.S. Bond Index Portfolio (the Portfolio) offers investors a
convenient and economical way to invest in an open-end, diversified,
management investment company. Fidelity U.S. Bond Index Portfolio seeks to
provide investment results that correspond to the aggregate price and
interest performance of the debt securities in the Lehman Brothers
Aggregate Bond Index (the Aggregate Bond Index or the Index).
This Prospectus is designed to provide you with information that an
investor should know 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 19.
A Statement of Additional Information (dated April 2 9 , 1994) for the
Portfolio has been filed with the Securities and Exchange Commission (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.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL .
For information or assistance in opening a new account:
INDIVIDUAL ACCOUNTS (Participant)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact your plan
sponsor directly.
RETIREMENT PLAN LEVEL ACCOUNTS (Trustees, Plan Sponsors)
Corporate Clients 800-962-1375
"Not for Profit" Clients 800-343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 800-843-3001
TABLE OF CONTENTS
Summary of Portfolio Expenses
Financial Highlights
Investment Objective
Investment Policies , Risks, and Limitations
How to Invest
How to Exchange
How to Redeem
Distributions and Taxes
Portfolio Transactions
Performance
Management Contract, Distribution and Service Plan
Appendix
Performance Update 19
Portfolio Manager Interview 21
Financial Statements 23
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUMMARY OF PORTFOLIO EXPENSES
The expense summary format below was developed for use by all mutual funds
to help you make your investment decisions. Of course, you should consider
this expense information along with other important information, including
the Portfolio's investment objective and its past performance.
A. ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees .00%*
Other Expenses .3 2 %
TOTAL PORTFOLIO OPERATING EXPENSES .3 2 %
* Net of reimbursement.
B. EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming (1) a
5% annual return and (2) full redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$ 3 $ 10 $ 18 $ 41
EXPLANATION OF TABLE
A. ANNUAL PORTFOLIO OPERATING EXPENSES are based on the Portfolio's
historical expenses after reimbursement. Management Fees are paid by the
Portfolio to Fidelity Management & Research Company (FMR) for managing
its investments and business affairs. The Portfolio incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and for other services. Subject to revision upon 90 days'
notice to shareholders, FMR has voluntarily agreed to temporarily limit
the total operating expenses of the Portfolio to .32% of its average net
assets. If this agreement were not in effect, the Portfolio's
management fee, other expenses and total operating expenses would
have be en .32 %, .34 % and .66 %,
respectively. Management fees and other expenses are reflected in the
Portfolio's share price or dividends and are not charged directly to
individual shareholder accounts. Please refer to the section
"Management Contract, Distribution and Service Plan '' on page
for further information.
B. EXAMPLE: The hypothetical example illustrates the expenses associated
with a $1,000 investment over periods of 1, 3, 5 and 10 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.
FINANCIAL HIGHLIGHTS
The table below gives you information about the Portfolio's financial
history and uses the Portfolio's fiscal year (which ends February 28).
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
Year Ended Four Months Years Ended October 31, March 8, 1990
February 28, Ended (commencement
February 28, of operations) to/r>
October 31,
1994 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 11.070 $ 10.910 $ 10.710 $ 10.040 $ 10.000
Income from Investment Operations
.697 .260 .839 .863 .559
Net investment income
Net realized and unrealized gain (loss) on investments
(.110) .324 .277 .668 .040
Total from investment operations
.587 .584 1.116 1.531 .599
Less Distributions
(.727) (.254) (.836) (.861) (.559)
From net investment income
From net realized gain on investments
(.070) (.170) (.080) - -
In excess of net realized gain on investments
(.030) -- -- -- --
Total distributions
(.827) (.424) (.916) (.861) (.559)
Net asset value, end of period
$ 10.830 $ 11.070 $ 10.910 $ 10.710 $ 10.040
TOTAL RETURN (DAGGER) (DOUBLE DAGGER)
5.38% 5.50% 10.84% 15.86% 6.14%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 288,504 $ 123,351 $ 86,149 $ 39,144 $ 25,600
Ratio of expenses to average net assets **
.32% .32%* .32% .32% .32%*
Ratio of expenses to average net assets before expense
.66% .87%* .83% .90% .84%*
reductions **
Ratio of net investment income to average net assets
6.93% 7.34%* 7.70% 8.33% 8.62%*
Portfolio turnover rate
160% 89%* 113% 50% 62%*
</TABLE>
* ANNUALIZED
** SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS ON PAGE 31.
(dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(double dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
The Financial Highlights have been audited by Price Waterhouse, independent
accountants. Their unqualified report is included on page 32 . The
Annual Report begins on page 19.
INVESTMENT OBJECTIVE
The Portfolio's objective is to provide investment results that correspond
to the aggregate price and interest performance of the debt securities in
the Aggregate Bond Index. The Portfolio may not always achieve its
objective but it will follow the investment style described in "Investment
Policies , Risks, and Limitations '' below .
INVESTMENT POLICIES , RISKS, AND LIMITATIONS
Except for the Portfolio's investment objective and 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.
PORTFOLIO SECURITIES. FMR will pursue the Portfolio's investment
objective, while seeking to minimize transaction costs and other expenses,
by investing, under normal circumstances, at least 80% of the Portfolio's
assets in securities included in the Aggregate Bond Index. Should the
Portfolio's assets drop below $50 million, the assets invested in such
securities may drop to as low as 65%. In an attempt to mirror the
performance of the Index, the Portfolio also may invest up to 35% of its
total assets in repurchase agreements, options and futures contracts as
well as securities not listed in the Index, and may engage in
delayed-delivery transactions.
The Portfolio is not managed through traditional methods of investment,
which typically involve the frequent buying and selling of securities on
the basis of economic, financial and market analysis. The Portfolio will
attempt to maintain the weighting s of securities to correspond to
their respective weighting in the Index. For example, if 55% of the value
of the Index is represented by U.S. Treasury/agency securities, then
approximately 55% of the Portfolio also will be in U.S. Treasury/agency
securities. Similarly, if the Index were to be 24% "invested'' in mortgage
securities, the Portfolio also will be approximately 24% "invested'' in
mortgage securities. FMR expects to be able to invest within +/-10%
of the actual Index weighting of broad market sectors.
The Portfolio will attempt to duplicate the returns of the Index by holding
a combination of securities which, taken together, FMR expects to
perform similarly to the Index as a whole. The large number of issues in
the Index prevents the Portfolio from holding all issues in proportion to
their Index weighting. Instead, in an effort to duplicate the performance
of the Index, the Portfolio will hold issues which represent the
characteristics of securities in the Index. This technique is expected to
enable the Portfolio to track price movements within the Index while
minimizing transaction costs. FMR believes that this approach is an
effective method of substantially duplicating the total return of the
Index.
Issue types will be delineated along the lines of, among others, issuer
sector, term to maturity, coupon, interest rate volatility, liquidity, call
risk and correlation with other securities and ratings. The structure of
the U.S. fixed income markets is such that this strategy is believed by
FMR to be effective in matching the characteristics of the Index
with fewer securities than actually are held in the Index. As the Portfolio
grows, new issues may be added to the Portfolio based on the analysis of
FMR , providing for the coverage of previously unrepresented
categories of securities. Thus, FMR expects the Portfolio to have a
better record of tracking the Index as the assets of the Portfolio grow.
The Index is a total return index measuring both the capital price changes
and the income underlying the universe of securities weighted by market
value outstanding. Inclusion of a security in the Index in no way implies
an opinion by Lehman Brothers, Inc. as to its attractiveness or
appropriateness as an investment. Lehman Brothers, Inc. is neither a
sponsor of nor in any way affiliated with the Portfolio.
SUITABILITY
By itself, the Portfolio does not constitute a balanced investment plan.
The Portfolio's share price will fluctuate in response to changes in
interest rates and other market factors. An increase in interest rates
generally will reduce the value of the Portfolio's investments. Because of
the potential risks, the Portfolio may not be suitable for short-term
investors, or investors who require protection of principal, such as that
offered by a money market fund.
The Portfolio is designed as an economical and convenient investment
vehicle for investors whose objective is to achieve a return corresponding
to the return of the Aggregate Bond Index with reasonable consistency over
time, without assuming a substantial risk of under performance during any
individual year. 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, which is described under "Subaccounting and
Special Services'' on page .
TRACKING THE INDEX. The number of issues held by the Portfolio will
increase as the Portfolio's asset level increases beyond the $50 million
level. FMR expects that as the asset level of the Portfolio grows,
the correlation between the performance of the Portfolio and that of the
Index will be above 0.90; a figure of 1.00 would indicate perfect
correlation. This level of correlation may be achieved before taking
Portfolio expenses into account. FMR will seek a performance
correlation of 0.90 or better. In the unlikely event that this correlation
is not achieved, the Board of Trustees will consider alternative
arrangements.
The Portfolio's ability to duplicate the total return of the Index will
depend, to some extent, on the size and frequency of cash flow into and out
of the Portfolio. FMR 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. Apart from changes resulting from
the Portfolio's cash flow, adjustments may be made in the Portfolio because
of the "aging'' of issues, quality upgrades and downgrades, changes in the
composition of the Index and similar reasons, but such changes and the
associated costs should be minimal.
INDEX COMPOSITION. The Aggregate Bond Index is comprised of the Lehman
Brothers Government Bond Index, Corporate Bond Index and Mortgage-Backed
Securities Index (the Indices). Combined, these Indices include U.S.
Treasury obligations, including bonds and notes; U.S. agency obligations,
including those of the Federal Farm Credit Bank, Federal Land Bank and the
Bank for Co-Operatives; foreign obligations, including U.S.
dollar-denominated World Bank issues and non-convertible debt issued by
foreign sovereign governments, foreign municipalities, foreign governmental
agencies or international agencies; U.S. investment-grade corporate debt,
including industrial, finance and utility issues, and mortgage-backed
obligations, including Government National Mortgage Association, Federal
National Mortgage Association and Federal Home Loan Mortgage Corporation
obligations.
With the exception of the Mortgage-Backed Securities Index, each of the
Indices has an intermediate component consisting of issues with maturities
between one and ten years and a long-term component consisting of issues
with maturities of ten years or greater.
As of February 28, 1994, 4,693 issues were included in the Index,
representing more than $ 4 trillion in market value. The four major
classes of bonds in the Index are U.S. government bond obligations,
mortgage-backed securities, corporate bonds and asset-backed securities.
The Index as of February 28, 1994 consisted approximately of:
NUMBER % OF
OF ISSUES ISSUE CLASS MARKET VALUE
854 U.S. government bonds 52 %
608 Mortgage-backed securities 29 %
3,113 Corporate debt issues 17 %
118 Asset-backed securities 2%
PORTFOLIO BOND RATINGS. All debt included in the Aggregate Bond Index has a
minimum Standard & Poor's Ratings Group (S&P) rating of BBB, a
minimum Moody's Investors Service, Inc. (Moody's) rating of Baa, or a
minimum Fitch Investors Service rating of BBB. The Portfolio will invest in
debt securities if the securities are rated investment grade by at least
one rating service (including Duff and Phelps Credit Rating Co.), as well
as in unrated securities of equivalent quality as determined by FMR.
Investment grade bonds are generally of medium to high quality. Those rated
in the lower end of the category (Baa/BBB), however, may possess
speculative characteristics and may be more sensitive to economic changes
and changes in the financial condition of issuers.
Government securities are issued or guaranteed, as to timely payment of
principal and interest, by the U.S. government or its agencies or
instrumentalities. They may be backed by the credit of the government as a
whole or only by the issuing agency. For example, securities issued by the
Federal Home Loan Mortgage Corporation are supported only by the credit of
the agency that issued them, and not by the U.S. government. Securities
issued by the Federal National Mortgage Association are supported by the
agency's right to borrow money from the U.S. Treasury under certain
circumstances. U.S. Treasury securities and some agency securities, such as
those issued by the Government National Mortgage Association, are backed by
the full faith and credit of the U.S. government and are the highest
quality government securities.
The Portfolio will invest some of its assets in Yankee bonds (foreign bonds
that are U.S. dollar-denominated), and SEC registered public debt issued or
guaranteed by foreign governments, municipalities, governmental agencies or
international agencies.
Foreign government securities involve greater credit risk than U.S.
government securities. Foreign government securities involve many special
risks associated with international investments, including possible
illiquidity due to currency controls, other government actions, or
differences in trading practices, and the risk of non-payment for political
reasons. Foreign companies generally are not subject to uniform
accounting, auditing, and financial reporting standards, practices, and
requirements comparable to those that apply to U.S. companies.
In the past several years, the Index has outperformed many active bond
managers who use traditional techniques such as interest rate forecasting
and sector swapping. Possible reasons for such a disparity in performance
include the continually fully invested nature of the Index, its broad
diversification and absence of transaction costs. However, there is no
assurance that the Index will outperform a majority of investment managers
in the future.
OTHER PORTFOLIO SECURITIES. The Portfolio may purchase debt securities not
included in the Aggregate Bond Index if FMR believes such purchases
will assist the Portfolio in approximating the return of the Index. In
purchasing debt securities not included in the Index, FMR will consider
only debt securities with ratings that are equivalent to those debt
securities included in the Index, as well as unrated securities of similar
quality as determined by FMR. The Portfolio may invest up to 10% of its
net assets in illiquid investments. In addition, the Portfolio may
purchase indexed securities, restricted securities, zero coupon securities,
asset-backed securities, mortgage-backed securities, options and futures,
loans and other direct debt instruments, and swap agreements.
The Portfolio may, for temporary defensive purposes, invest in short-term
securities such as: U.S. government securities, repurchase agreements, time
deposits, certificates of deposit, bankers' acceptances and high-grade
commercial paper.
LIMITING INVESTMENT RISKS. FMR 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 25% of total assets would be invested in the securities of a single
issuer; or (b) with respect to 75% of total assets, more than 5% of total
assets would be invested in the securities of a single issuer or it would
hold more than 10% of the outstanding voting securities of such issuer.
2. The Portfolio may not purchase the securities of any issuer if, as a
result, more than 25% of its total assets 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 FMR for temporary or emergency purposes in an aggregate
amount not exceeding 33 1/3% of its total assets; (b) may engage in reverse
repurchase agreements; and (c) will not purchase any security while
borrowings representing more than 5% of net assets are outstanding.
4. The Portfolio may temporarily lend portfolio securities to
broker-dealers and institutions when the loans are fully collateralized.
The Portfolio also may make cash loans to other funds advised by FMR.
Loans, in the aggregate, will be limited to 33 1/3% of the Portfolio's
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. The limitations
and the policies discussed in this Prospectus 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.
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.
HOW TO INVEST
Shares of the Portfolio are offered continuously at their net asset value
per share (NAV) 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 NAV. Fidelity
Service Company (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. Bonds held by the
Portfolio are valued at fair value based on quotations supplied by a
pricing service approved by the Board of Trustees. Other portfolio
securities and 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 the NAV is
calculated each day the NYSE is open for trading. The NYSE has designated
the following holiday closings for 1994: President's Day, Good Friday,
Memorial Day, Independence Day (observed) , Labor Day, Thanksgiving
Day and Christmas Day (observed). Although FMR expects the same holiday
schedule , with the addition of New Year's Day, to be observed in the
future, the NYSE may modify its holiday schedule at any time. On any day
that the NYSE closes early, or as permitted by the SEC, the right is
reserved to advance the time on that day by which purchase and redemption
orders must be received. To the extent that p ortfolio securities are
traded in other markets on days the NYSE is closed, the Portfolio's NAV may
be affected on days when investors do not have access to the
Portfolio to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
HOW TO INVEST
INITIAL (minimum) INVESTMENT *
$100,000
METHOD
BY WIRE
ADDITIONAL (minimum) INVESTMENT
- --
BY MAIL
$100,000
- --
Fidelity U.S. Bond Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
Please make your check payable to
"Fidelity U.S. Bond Index
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 Fidelity
Investments Institutional
Operations Company (FIIOC)
that your Fidelity Money Line is
active. The maximum transaction
amount is $50,000.)
INDIVIDUAL ACCOUNTS (Participant)
If you are a participant investing through a retirement plan sponsor or
other institution, please refer to
your plan materials or contact your plan sponsor directly for all services.
INITIAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Client Services) "Not for Profit" Retirement Plans 800-343-0860
Financial Institutions 800-843-3001
ADDITIONAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Trading) "Not for Profit" Retirement Plans 800-343-0860
Financial Institutions 800-343-6310
* Minimum may be waived for tax-saving retirement plans.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial investment
to establish a new account in the Portfolio is $100,000. Unless you
have a Fidelity mutual fund account, you must complete and sign an
application . Subsequent investments may be in any amount. 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. You will be
given 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. The minimum investment requirement 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 telephone number in the chart on page to advise
Client Services of the investment and to obtain an account number, wiring
instructions, and instructions regarding the establishment of an account.
To make additional investments by wire, you must call Trading before 4:00
p.m. Eastern time at the appropriate telephone number in the chart on
page . 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 canceled 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. Bond Index Portfolio" to:
Fidelity U.S. Bond Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
To make additional investments by mail, please make your check payable to
"Fidelity U.S. Bond 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 canceled and you could be liable for any losses or fees incurred. When
you purchase by check or via Fidelity Money Line, the Portfolio may hold
payment on redemptions until it is reasonably satisfied that the investment
has been collected (which can take up to seven business days). To avoid
this collection period, you can invest by wire (see " To Invest by Wire,''
above).
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 Trading 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 is available to
certain retirement investors who invest directly through Fidelity. 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 tele phone 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 FIIOC that your Fidelity Money Line is
active. To make an additional investment via Fidelity Money Line, or to
inquire about the service, please call Client Services before 4:00 p.m.
Eastern time at the appropriate telephone number in the chart on page .
You may initiate many transactions by telephone. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
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 investment objective,
policies and limitations will be eligible for exchange. However,
Distributors reserves the right to refuse a tender for any reason. A gain
or loss for federal income tax purposes may be realized by the investor
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.
CHOOSING A DISTRIBUTION OPTION. You may choose from three distribution
options when filling out an application.
A. The SHARE OPTION reinvests your income dividends and capital gain
distributions .
B. The INCOME-EARNED OPTION pays your income dividends in cash and
reinvests your capital gain distributions.
C. With the CASH OPTION , you receive income dividends and capital
gain distributions (if any) in cash. Distribution checks will be mailed no
later than seven days after the last day of the month.
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 certain tax-sheltered retirement plans, you may
move any distributions you receive from the plan to a Fidelity rollover IRA
without incurring a sales charge. You may do so by a direct transfer of
assets or by making the investment within 60 days of the date of the
distribution. Consult your plan administrator or a tax advisor for more
details. You also may elect to take your distributions in kind and
establish an IRA rollover account in the Portfolio. For such IRA rollovers
to the Portfolio, there is no minimum investment required when opening an
account. You may invest in most Fidelity retail funds through retirement
plans without paying a sales charge. See your plan materials for more
information.
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.
HOW TO EXCHANGE
The exchange privilege is a convenient way to buy shares in the Portfolio
and in Fidelity's other funds 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 Fidelity funds registered for sale
in your state. You may only exchange between accounts that are registered
in the same name, address, and taxpayer identification number. Please read
the prospectus of the Fidelity fund into which you want to exchange
Portfolio shares for relevant information including any applicable sales
charges. Each exchange may produce a capital loss or taxable capital gain.
(Please see "Distributions and Taxes'' on page .)
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 Portfolio shares for the shares
of another Fidelity 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,'' below. Written requests for exchange should be
mailed to:
Fidelity U.S. Bond Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
To exchange by telephone call Trading before 4:00 p.m. Eastern time, at the
appropriate telephone number indicated in the chart on 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 Fidelity funds may have different exchange restrictions.
Check each fund's prospectus for details. The exchange limit may be
modified for accounts in certain institutional retirement plans to conform
to plan exchange limits and Department of Labor regulations. See your plan
materials for further information.
The Portfolio reserves the right at any time without prior notice to refuse
exchange purchases by any person or group if, in FMR's judgment, 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.
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," on page ).
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 (but may take up to seven
business days) after your telephone call. Remember that the Portfolio may
hold payment until it is reasonably satisfied that investments made by
check or via Fidelity Money Line have been collected (which may take up to
seven business days).
TO REDEEM BY MAIL. Send a letter of instruction with your signature(s)
guarantee to:
Fidelity U.S. Bond Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
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
Corporations, Letter of instruction and
Associations a corporate 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 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. Signature guarantees will be accepted from banks, brokers, dealers,
municipal securities dealers, municipal securities brokers, government
securities dealers, government securities brokers, credit unions (if
authorized under state law), national securities exchanges, registered
securities associations, clearing agencies and savings associations.
TO REDEEM BY TELEPHONE. You may redeem an y 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.
Provided that your account registration has not changed within the last
3 0 days, you may redeem shares of the Portfolio worth $100,000 or
less by telephone. Your redemption proceeds will be sent to the record
address. To redeem by telephone call Trading before 4:00 p.m. Eastern time
at the appropriate telephone number below:
INDIVIDUAL ACCOUNTS (Participant)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact your plan
sponsor directly.
RETIREMENT PLANS
Corporate 800-962-1375
"Not for Profit" 800-343-0860
FINANCIAL INSTITUTIONS 800-343-6310
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 amounts are $2,500 and $50,000,
respectively. Accounts may not be closed by this service. To redeem via
Fidelity Money Line call the appropriate numbers listed 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, including certain purchases by exchange. 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 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 are declared daily and paid monthly. 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. The Portfolio's
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 31. Each
year, 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 Internal Revenue Service (IRS).
CAPITAL GAINS. You may realize a capital gain or loss when you redeem
(sell) or exchange shares of the Portfolio. 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 should also keep your regular
account statements to use in determining your tax.
"BUYING A DIVIDEND.'' On the record date for a distribution from capital
gains, the Portfolio's share price 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 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the
Portfolio to withhold 31% of your taxable distributions and redemptions.
PORTFOLIO TRANSACTIONS
Portfolio securities generally are traded in the over-the-counter market
through broker-dealers. A broker-dealer is a securities firm or bank which
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a
spread. FMR chooses broker-dealers by judging professional ability and
quality of service. Since FMR trades a large number of securities,
including those of Fidelity's other funds, broker-dealers are willing to
work with the Portfolio on a more favorable spread than would be possible
for most individual investors. Also, the Portfolio generally pays lower
commissions when placing trades with broker-dealers. The Portfolio will pay
commissions in connection with transactions in futures contracts and
related options.
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, and on an agency basis, to Fidelity Brokerage
Services, Inc. (FBSI), an affiliate of FMR. FMR will make such allocations
if commissions are comparable to those charged by non-affiliated, qualified
broker-dealers for similar services.
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 Portfolio may engage in short-term trading when consistent with its
investment objective. Also, a security may be sold and another of
comparable quality simultaneously purchased to take advantage of what
FMR believes to be a temporary disparity in the normal yield
relationship of the two securities. 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
February 28, 1994 was 160 %. Because a high turnover rate
increases transaction costs and may increase taxable capital gains, FMR
carefully weighs the anticipated benefits of short-term investments against
these consequences.
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.
Yield is a way of showing the rate of income the Portfolio earns on its
investments as a percentage of the Portfolio's share price. To calculate
yield, the Portfolio takes the interest income it earned from its portfolio
of investments for a 30-day period (net of expenses), divides it by the
average number of Portfolio shares entitled to receive dividends, and
expresses the result as an annualized percentage rate based on the
Portfolio's share price at the end of the 30-day period. Yields are
calculated according to accounting methods that are standardized for all
stock and bond funds. Because yield accounting methods differ from the
methods used for other accounting purposes, the Portfolio's yield may not
equal the income paid to your account, or the income reported in the
Portfolio's financial statements.
TOTAL RETURNS are based on the overall dollar or percentage change in value
of a hypothetical investment in t he Portfolio, including changes in
share price and assuming all of the Portfolio's dividend 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 returns.
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.
HISTORICAL RESULTS. The following chart shows the Portfolio's 30-day yield
and total returns (as compared to the cumulative total returns of the
Index) for the periods ended February 28, 1994. Figures for the Index are
reported for all sectors on a month-end to month-end basis. All returns are
market value weighted inclusive of accrued interest. (For additional
i nformation on the Index , see "Index Composition,'' page .)
30-DAY YIELD
5.35 %
LEHMAN BROS.
AVERAGE AGGREGATE BOND
ANNUAL CUMULATIVE INDEX CUMULATIVE
TOTAL RETURNS TOTAL RETURNS RETURNS
One Year 5.38 % 5.38 % 5.40 %
Life of Portfolio* 11.00 % 51.55 % 49.66 % **
* Life of Portfolio March 8, 1990 (commencement of operations) to February
28, 1994.
** Total returns are from month-end closest to Portfolio's commencement of
operations.
If Fidelity had not reimbursed certain Portfolio expenses during
these periods, the 30-day yield would have been 5.01 % and the total
returns would have been lower.
The Portfolio may quote its adjusted net asset value, which includes all
distributions paid and may be averaged over specific periods.
MANAGEMENT CONTRACT, DISTRIBUTION AND SERVICE PLAN
For managing its investments and business affairs, the Portfolio pays a
monthly management fee to FMR at the annual rate of .32% 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 expenses (generally excluding
interest, taxes, brokerage commissions and extraordinary expenses), exceed
an annual rate of .32% 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 year end. Such reimbursements have the effect of
decreasing the Portfolio's expenses, thereby increasing the Portfolio's
yield and total return. If this policy were not in effect, aggregate
operating expenses for the Portfolio would have been . 66 % of average
net assets for the fiscal year ended February 28, 1994.
FIIOC, 82 Devonshire Street, Boston, MA 02109, an affiliate of FMR, is
transfer and shareholder 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.
Service, 82 Devonshire Street, Boston, MA 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 and
$750,000 per year. The fees for securities lending services are based on
the number and duration of individual securities loans.
DISTRIBUTION AND SERVICE PLAN. The Portfolio has adopted a Distribution and
Service Plan (the Plan) under Rule 12b-1 under 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. The Board of Trustees has not yet
authorized such payments.
Distributors may, at its own expense, provide promotional incentives to
Investment Professionals (defined below) who support the sale of shares of
the Portfolio without reimbursement from the Portfolio. Investment
Professionals 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 U.S. BOND INDEX PORTFOLIO AND THE FIDELITY ORGANIZATION. Fidelity
U.S. Bond 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 for the Trust, as a whole, for purposes such as
electing or removing Trustees, changing fundamental investment policies, 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 p ortfolio if a matter
affects just that portfolio.
Fidelity Investments is one of the largest investment management
organizations in the United States 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 for its operation .
FMR 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
February 28, 1994, FMR advised funds having more than 15 million
shareholder accounts with a total value of more than $ 225 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),
Johnson family members, and various trusts for the benefit of the Johnson
family, form a controlling group with respect to FMR Corp.
APPENDIX
The following paragraphs provide a brief description of securities in which
the Portfolio may invest and transactions it may make. The Portfolio is not
limited by this discussion, however, and may purchase other types of
securities and enter into other types of transactions if they are
consistent with the Portfolio's investment objective and policies.
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in
pools of consumer loans (generally unrelated to mortgage loans) and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend on payment of the underlying loans by
individuals, although the securities may be supported by letters of credit
or other credit enhancements. The value of asset-backed securities also may
depend on the creditworthiness of the servicing agent for the loan pool,
the originator of the loans, or the financial institution providing the
credit enhancement.
DELAYED-DELIVERY TRANSACTIONS. The Portfolio may buy and sell securities on
a when-issued or delayed-delivery basis, with payment and delivery taking
place at a future date. The market value of securities purchased in this
way may change before the delivery date, which could increase fluctuations
in the Portfolio's yield. Ordinarily, the Portfolio will not earn interest
on securities purchased until they are delivered.
ILLIQUID INVESTMENTS. Under the supervision of the Board of Trustees, FMR
determines the liquidity of the Portfolio's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Portfolio to sell them promptly at an acceptable price.
INDEXED SECURITIES. The Portfolio may invest in indexed securities whose
value is linked to currencies, interest rates, commodities, indices, or
other financial indicators. Most indexed securities are short to
intermediate term debt securities whose values at maturity or
interest rates rise or fall according to the change in one or more
specified underlying instruments. Indexed securities may be positively or
negatively indexed (i.e., their value may increase or decrease if the
underlying instrument appreciates), and may have return characteristics
similar to direct investments in the underlying instrument or to one or
more options on the underlying instrument. Indexed securities may be more
volatile than the underlying instrument itself.
INTERFUND BORROWING 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 7.5% 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.
MORTGAGE-BACKED SECURITIES. The Portfolio may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security may be an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
Portfolio may invest in them if FMR determines they are consistent with the
Portfolio's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
OPTIONS AND FUTURES CONTRACTS. The Portfolio may buy and sell options and
futures contracts to manage its exposure to changing interest rates and
security prices. Some options and futures strategies, including selling
futures, buying puts, and writing calls, tend to hedge the Portfolio's
investments against price fluctuations. Other strategies, including buying
futures, writing puts, and buying calls, tend to increase market exposure.
Options and futures may be combined with each other in order to adjust the
risk and return characteristics of the overall strategy. The Portfolio may
invest in options and futures based on any type of security or
index, including options not traded on exchanges.
Options and futures can be volatile investments, and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower the Portfolio's
return. The Portfolio could also experience losses if the prices of its
options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market. Options and futures do not pay interest, but
may produce taxable capital gains.
The Portfolio will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition, the Portfolio will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, the
Portfolio buys a security at one price and simultaneously agrees to sell it
back at a higher price. The Portfolio may also make securities loans to
broker-dealers and institutional investors, including FBSI. In the event of
the bankruptcy of the other party to either a repurchase agreement or a
securities loan, the Portfolio could experience delays in recovering its
cash or the securities it lent. To the extent that, in the meantime, the
value of the securities purchased had decreased, or the value of the
securities lent had increased, the Portfolio could experience a loss. In
all cases, FMR must find the creditworthiness of the other party to the
transaction satisfactory.
RESTRICTED SECURITIES are securities which cannot be sold to the
public without registration under the Securities Act of 1933. Unless
registered for sale, these restricted securities can only be sold in
privately negotiated transactions or pursuant to an exemption from
registration.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. As one way of managing its exposure to different types
of investments, the Portfolio may enter into interest rate swaps, currency
swaps, and other types of swap agreements such as caps, collars, and
floors. In a typical interest rate swap, one party agrees to make regular
payments equal to a floating interest rate times a "notional principal
amount," in return for payments equal to a fixed rate times the same
amount, for a specified period of time. If a swap agreement provides for
payments in different currencies, the parties might agree to exchange the
notional principal amount as well. Swaps may also depend on other prices or
rates, such as the value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift the Portfolio 's investment
exposure from one type of investment to another. For example, if the
Portfolio agreed to exchange payments in dollars for payments in foreign
currency, the swap agreement would tend to decrease the Portfolios exposure
to U.S. interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of the Portfolio's investments
and its share price and yield.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks
assumed. As a result, swaps can be highly volatile and may have a
considerable impact on the Portfolio's performance. Swap agreements are
subject to risks and related to the counterparty's ability to perform, and
may decline in value if the counterparty's creditworthiness deteriorates.
The Portfolio may also suffer losses if it is unable to terminate
outstanding swap agreements or reduce its exposure through offsetting
transactions.
The Portfolio will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
If the Portfolio enters into a swap agreement on a net basis, it will
segregate assets with a daily value at least equal to the excess, if any,
of the Portfolio accrued obligations under the swap agreement over the
accrued amount the Portfolio is entitled to receive under the agreement.
If the Portfolio enters into a swap agreement on other than a net basis, it
will segregate assets with a value equal to the full amount of the
Portfolio's accrued obligations under the agreement.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its daily dividend, the Portfolio takes into account
as income a portion of the difference between a zero coupon bond's purchase
price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government, a government agency, or a
corporation in zero coupon form.
PERFORMANCE UPDATE
$100,000 OVER LIFE OF FUND FIDELITY U.S. BAGGREGATE BOND
03/31/90 100000.00 100000.00
04/30/90 98902.15 99080.00
05/31/90 101848.95 102012.77
06/30/90 103292.33 103655.17
07/31/90 104861.21 105085.61
08/31/90 103552.15 103677.47
09/30/90 104402.79 104537.99
10/31/90 105789.53 105865.62
11/30/90 107912.50 108141.73
12/31/90 109639.20 109828.75
01/31/91 110945.70 111190.62
02/28/91 111681.87 112135.74
03/31/91 112576.10 112909.48
04/30/91 113908.48 114128.90
05/31/91 114705.76 114790.85
06/30/91 114615.94 114733.45
07/31/91 116187.71 116328.25
08/31/91 118683.00 118840.94
09/30/91 121180.33 121253.41
10/31/91 122572.39 122599.32
11/30/91 123844.12 123727.24
12/31/91 127589.07 127401.93
01/31/92 126089.96 125669.27
02/29/92 126777.93 126486.12
03/31/92 126332.43 125777.80
04/30/92 127155.24 126683.40
05/31/92 129563.13 129077.71
06/30/92 131479.58 130858.99
07/31/92 134384.14 133528.51
08/31/92 135838.14 134877.15
09/30/92 137508.21 136482.18
10/31/92 135863.10 134666.97
11/30/92 135802.93 134693.90
12/31/92 137757.57 136835.54
01/31/93 140497.87 139462.78
02/28/93 143334.35 141903.38
03/31/93 143928.50 142499.37
04/30/93 145002.73 143496.87
05/31/93 145185.51 143683.41
06/30/93 147708.59 146284.08
07/31/93 148811.01 147117.90
08/31/93 151228.56 149692.47
09/30/93 151744.95 150096.64
10/31/93 152254.88 150651.99
11/30/93 151011.42 149371.45
12/31/93 151827.71 150178.06
01/31/94 153733.22 152205.46
02/28/94 151041.84 149557.09
$100,000 OVER LIFE OF FUND: LET'S SAY YOU INVESTED $100,000 IN FIDELITY
U.S. BOND INDEX PORTFOLIO ON MARCH 31, 1990, SHORTLY AFTER THE FUND
STARTED. BY FEBRUARY 28, 1994, THE VALUE OF YOUR INVESTMENT WOULD HAVE
GROWN TO $151,042 - A 51.04% INCREASE ON YOUR INITIAL INVESTMENT. FOR
COMPARISON, LOOK AT HOW A $100,000 INVESTMENT IN THE LEHMAN BROTHERS
AGGREGATE BOND INDEX(WITH DIVIDENDS REINVESTED) DID OVER THE SAME PERIOD.
IT WOULD HAVE GROWN TO $149,557 - A 49.56% INCREASE.
AVERAGE ANNUAL TOTAL RETURNS
FIDELITY
U.S. BOND INDEX
PORTFOLIO
LEHMAN
BROTHERS
AGGREGATE
BOND INDEX
FOR THE PERIOD ENDED FEBRUARY 28, 1994
One-year total return* 5.38% 5.40%
Life of fund average annual total return* 11.00% n/a
FOR THE PERIOD ENDED FEBRUARY 28, 1994
One-year total return* 5.38% 5.40%
Life of fund cumulative total return* 51.55% n/a
CUMULATIVE TOTAL RETURNS
PERFORMANCE UPDATE - CONTINUED
FIDELITY
U.S. BOND INDEX
PORTFOLIO
FOR THE PERIOD ENDED FEBRUARY 28, 1994
30-day annualized net yield 5.35%
One-year dividends per share 72.70(cents)
One-year dividend rate** 6.54%
YIELD AND DIVIDENDS
* TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, IF ANY. FIGURES FOR MORE THAN ONE YEAR ASSUME
A STEADY COMPOUNDED RATE OF RETURN AND ARE NOT THE FUND'S YEAR-BY-YEAR
RESULTS, WHICH FLUCTUATED OVER THE PERIODS SHOWN. LIFE OF FUND FIGURES ARE
FROM COMMENCEMENT OF OPERATIONS, MARCH 8, 1990, TO THE PERIODS LISTED
ABOVE. THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS A BROAD MEASURE OF THE
BOND MARKET. IT INCLUDES REINVESTED DIVIDENDS AND CAPITAL GAINS, IF ANY.
** THE DIVIDEND RATE REFLECTS ACTUAL DIVIDENDS PAID DURING THE PERIOD. IT
IS BASED ON AN AVERAGE SHARE PRICE OF $11.12.
IF FIDELITY HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THE PERIODS
SHOWN, THE 30-DAY YIELD WOULD HAVE BEEN 5.01% AND THE TOTAL RETURNS WOULD
HAVE BEEN LOWER.
ALL PERFORMANCE NUMBERS ARE HISTORICAL; THE FUND'S SHARE PRICE, YIELD AND
RETURN WILL VARY AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES.
AN INTERVIEW WITH
CHRISTINE THOMPSON,
PORTFOLIO MANAGER OF
FIDELITY U.S. BOND INDEX PORTFOLIO
Q. CHRISTINE, HOW HAS THE FUND PERFORMED?
A. For the year ended February 28, 1994, the fund's total return was 5.38%.
That was in line with the Lehman Brothers Aggregate Bond Index, which
returned 5.40% for the same period.
Q. WHAT ACCOUNTS FOR THOSE NUMBERS?
A. The goal of the fund is to replicate, as closely as possible, the
performance of the index, so let's start with each of the sectors within
the Lehman Brothers Aggregate Bond Index. Over the past 12 months, Treasury
securities, which made up about 47% of the index, returned 5.4%;
mortgage-backed securities, at roughly 29% of the index, returned about
4.7%; corporate securities, which comprise roughly 17% of the index,
returned about 6.7%; agencies, which were about 6% of the index, returned
5.6%; and asset-backed securities, which were nearly 2% of the total,
returned about 5%.
Q. DID YOU KEEP THE FUND'S WEIGHTINGS IN EACH OF THESE SECTORS IN LINE WITH
THE INDEX?
A. The sector weightings were similar, but the fund differed from the index
in the individual securities it owned. The Lehman Brothers Aggregate Bond
Index is made up of over 4,000 individual securities. It's impractical for
the fund to own everything in that index, so I use a technique called
stratified sampling. That involves selecting and prioritizing
characteristics, and dissecting the index into cells that define the
parameters for those characteristics.
Q. HOW DO YOU USE THESE CELLS?
A. Let's take the characteristic I prioritize as most important, which is
duration, a measure of a bond's sensitivity to changes in interest rates. I
determine what percentage of the index falls within a duration of zero to
one year, one to two years, and so on. Then in structuring the fund, I look
for securities that will give the fund the same duration breakdown as the
index. In addition to duration, I use many other security characteristics
including, but not limited to, sector, maturity, and credit quality. The
challenge in managing the fund is prioritizing cells I think will be most
important in determining the index's, and ultimately, the fund's
performance.
Q. ONCE YOU'VE PRIORITIZED THOSE PARAMETERS, WHAT'S NEXT?
A. The next step is to select a specific security. Typically, I look at
more than one parameter at a time. For instance, I might need to add a bond
with a five-year duration and at the same time need to add a corporate
bond. Within those parameters, I draw on Fidelity's research resources,
which allow me to pick securities that have the characteristics I need, and
also offer the potential for performing better than other securities with
similar characteristics. That security selection has helped keep the fund's
performance in line with the index, even after expenses are factored in.
Q. CAN YOU GIVE US AN EXAMPLE OF HOW A SPECIFIC CHOICE MIGHT HAVE IMPROVED
PERFORMANCE?
A. One example was the fund's stake in banks. While banks made up a portion
of the corporate bond sector of the index, I concentrated a comparatively
large stake in regional banks that Fidelity's credit research department
identified as having the potential to be upgraded. Many of these bonds were
subsequently upgraded, which helped the fund. Also, up to 20% of the fund
can be invested in securities that are not technically a part of the index.
Recently that flexibility allowed me to purchase floating rate notes, which
provide some price protec-
tion against rising interest rates. The fund's position in floating rate
notes helped performance, especially after the Federal Reserve raised
short-term interest rates on February 4.
Q. WHAT CAN INVESTORS EXPECT OVER THE NEXT YEAR?
A. The fund's return will be dictated by the direction of interest rates.
No matter which way interest rates go, I'll continue to keep the fund fully
invested. If interest rates continue to rise, investors should expect lower
returns than we saw over the past year. On the other hand, if interest
rates start to fall again, the fund's performance could benefit.
FIDELITY U.S. BOND INDEX PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MOODY'S MOODY'S
RATINGS PRINCIPAL VALUE RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1) (UNAUDITED) AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - 27.5%
BASIC INDUSTRIES - 0.3%
PAPER & FOREST PRODUCTS - 0.3%
Chesapeake Corp.:
10 3/8%, 1/1/00 Baa3 $ 300,000 $ 351,969 165159AD
9 7/8%, 5/1/03 Baa3 350,000 408,828 165159AE
760,797
ENERGY - 1.6%
ENERGY SERVICES - 1.5%
Financiera Energetica Nacional
6 5/8%, 12/13/96 (a) - 1,000,000 990,000 317703AA
McDermott International, Inc.
10 1/4%, 6/1/95 Baa3 2,250,000 2,376,900 580033AK
Petroliam Nasional Berhad yankee
6 7/8%, 7/1/03 (a) A2 1,250,000 1,242,187 716708AA
4,609,087
OIL & GAS - 0.1%
Societe Nationale Elf Aquitaine
7 3/4%, 5/1/99 Aa3 150,000 160,365 833658AC
TOTAL ENERGY 4,769,452
FINANCE - 19.1%
ASSET-BACKED SECURITIES - 2.6%
Capital Auto Receivables Asset
Trust, 5.85%, 1/15/98 Aaa 867,348 876,022 139732AE
Chase Manhattan Credit Card
Master Trust, 7.65%, 11/15/98 Aaa 1,000,000 1,036,875 161612AB
Discover Card Trust, 6 1/8%,
5/15/98 A2 1,435,000 1,445,762 25466LAT
MBNA Master Credit Card Trust
7 3/4%, 10/15/98 Aaa 750,000 793,828 55262NAA
Standard Credit Card Master Trust I:
8 1/4%, 9/7/95 A2 2,380,000 2,430,575
8 1/4%, 10/7/97 A2 250,000 268,437 85333JAH
5 1/2%, 9/7/98 A2 715,000 707,627 85333JAX
6 1/4%, 9/7/98 A2 350,000 353,937 85333JAU
7,913,063
BANKS - 11.0%
Bancomer SA eurobonds 8%,
7/7/98 (a) - 1,000,000 1,015,000 059682AB
Bancomer SNC euro 8%, 7/7/98 Ba2 500,000 507,500 05999KAT
Bank of Boston Corp.:
9 1/2%, 8 /15/97 Baa2 100,000 112,000 060716AM
10.3%, 9/1/00 Baa2 1,461,000 1,577,880 060716AL
Bankers Trust 6%, 10/15/08 A2 2,000,000 1,819,820 066365BL
Barnett Bank 10.875%, 3/15/03 Baa1 115,000 144,780 06805LAA
Chase Manhattan Corp. euro
5%, 5/31/00 (b) Baa2 $ 900,000 $ 902,531 16199BAB
Citicorp:
8 1/2%, 2/11/97 Baa3 300,000 323,493 17303LJC
euro 5 1/4%, 7/10/97 Baa3 110,000 110,275 269990PS
Continental Bank Corp.
4 1/2%, 5/18/00 Baa3 1,500,000 1,498,125 211113AC
Czech National Bank Prague euro
7%, 4/6/96 Baa3 1,000,000 1,017,500 232840AA
Export-Import Bank Korea
7.85%, 11/1/96 A1 500,000 526,495 30215MAA
First of America Bank Corp.
8.5%, 2/1/04 A3 750,000 831,135 318906AA
First Bank Systems, Inc. euro:
5 1/4%, 11/29/96 (b) Baa1 2,000,000 2,000,000 3192799K
5 1/4%, 11/30/10 (b) A3 550,000 550,000 319279AK
First Fidelity Bancorporation:
8 1/2%, 4/1/98 A3 594,000 646,248 320194AE
9 3/4%, 5/25/95 A3 250,000 264,275 320195AA
First Hawaiian Bank secured
6.93%, 12/1/03 (a) A1 1,000,000 990,800 320500AA
First Interstate Bancorp:
9 3/8%, 1/23/02 Baa1 150,000 172,864 32055CAF
9 1/8%, 2/1/04 Baa3 270,000 311,180 320548BK
First Maryland Bancorp:
10 3/8%, 8/1/99 Baa1 655,000 772,815 320806AE
8 3/8%, 5/15/02 Baa1 1,050,000 1,141,875 320806AF
First National Bank of Boston
8 3/8%, 12/15/02 Baa2 200,000 219,400 323585TV
Fleet Financial Group, Inc.
8 1/8%, 7/01/04 Baa1 500,000 542,090 338915AA
Fleet/Norstar Financial Group,
Inc. 9.9%, 6/15/01 Baa3 1,250,000 1,468,762 339018AD
Korea Development Bank 6 1/4%,
5/1/00 A1 2,000,000 1,952,920 500630AF
Manufacturers Hanover Corp.
8 1/2%, 2/15/99 Baa1 1,000,000 1,091,210 564809BM
Manufacturers Hanover Trust, NY
euro (b):
5 1/4%, 4/30/97 A3 500,000 501,875 564997HK
8 1/2%, 7/15/97 Baa1 500,000 502,500 564997HJ
Marine Midland Banks, Inc.
8 5/8%, 3/1/97 Baa1 772,000 833,737 568287AE
Mercantile Bancorporation, Inc.
7 5/8%, 10/15/02 Baa1 300,000 314,781 587342AC
Merchants National Corp. 9 7/8%,
10/1/99 A2 750,000 872,812 589152AA
MOODY'S MOODY'S
RATINGS PRINCIPAL VALUE RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1) (UNAUDITED) AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Midland American Capital Corp.
gtd. 12 3/4%, 11/15/03 A1 $ 1,530,000 $ 1,913,265 597418AA
Provident Bank 7 1/8%, 3/15/03 Baa3 1,300,000 1,311,375 743838AC
Shawmut Corp.:
8 7/8%, 4/1/96 Baa1 875,000 934,850 820480AB
8 1/8%, 2/1/97 Baa1 580,000 617,445 820480AC
Signet Banking Corp.:
5 1/4%, 5/15/97 (b) Baa2 1,150,000 1,151,437 065446AP
5 1/4%, 4/15/98 (b) Baa2 150,000 150,187 065446AN
9 5/8%, 6/1/99 Baa2 400,000 454,448 826681AA
UJB Financial Corp. 8 5/8%,
12/10/02 Baa3 1,000,000 1,107,570 902760AB
33,177,255
CREDIT & OTHER FINANCE - 2.8%
Fleet Mortgage Group, Inc.
6 1/8%, 8/15/97 A3 200,000 202,167 339012AA
General Motors Acceptance Corp.:
8 1/4%, 8/1/96 Baa1 500,000 529,790 370424FP
8.15%, 9/17/96 A3 1,000,000 1,056,220 37042LY6
7.6%, 1/9/97 Baa1 400,000 417,856 37042MCL
7 3/4%, 1/28/97 Baa1 750,000 786,630 37042MEH
Greyhound Financial Corp.
6.95%, 1/28/98 Baa2 750,000 778,125 39804HBC
Margaretten Financial Corp.
6 3/4%, 6/15/00 Baa3 1,000,000 992,000 566576AA
Nationwide Mutual 6 1/2%,
2/15/04 (a) Aa3 1,500,000 1,467,750 638671AA
Railcar Trust, 7 3/4%, 6/1/04 Aaa 1,911,240 2,045,027 750755AA
8,275,565
INSURANCE - 1.0%
Metropolitan Life Insurance Co.
6 3/10%, 11/1/03 (a) Aa3 2,000,000 1,932,400 592173AA
New York Life Insurance Co.
6 2/5%, 12/15/03 (a) Aa2 1,000,000 974,400 64952GAA
2,906,800
SAVINGS & LOANS - 1.7%
Ahmanson (H.F.) & Co. 9 7/8%,
11/15/99 Baa3 1,000,000 1,156,120 008677AA
Golden West Finance Corp.
8 3/8%, 4/15/02 A3 500,000 548,250 381317AF
Home Savings of America:
10 1/4%, 12/5/96 Baa1 500,000 541,250 436904AN
10 1/2%, 6/12/97 Baa1 2,000,000 2,182,500 436904AP
Household Bank 8.45%, 12/10/02 A3 $ 650,000 $ 721,558 441800GF
5,149,678
TOTAL FINANCE 57,422,361
MEDIA & LEISURE - 0.5%
PUBLISHING - 0.5%
News America Holdings, Inc.
8 5/8%, 2/1/03 Ba1 1,500,000 1,599,120 652478AG
NONDURABLES - 0.5%
TOBACCO - 0.5%
RJR Nabisco, Inc. 9 1/4%, 5/1/95 Baa3 1,516,000 1,572,911 74960LAL
RETAIL & WHOLESALE - 0.3%
GENERAL MERCHANDISE STORES - 0.2%
Dayton Hudson Corp.
9.18%, 2/27/98 A3 250,000 278,017 239992BW
May Department Stores Co.
9 7/8%, 12/1/02 A2 150,000 181,411 577778AQ
459,428
GROCERY STORES - 0.1%
Great Atlantic & Pacific Tea, Inc.
9 1/8%, 1/15/98 Baa3 300,000 319,554 390064AA
TOTAL RETAIL & WHOLESALE 778,982
SERVICES - 1.1%
LEASING & RENTAL - 1.1%
Ryder System, Inc. 9.2%, 3/15/98 Baa1 2,188,000 2,294,665 783549AX
U.S. Leasing International, Inc.
8 3/4%, 5/1/96 A2 225,000 240,163 912129AB
6.54%, 11/15/00 A2 900,000 897,894 91213LDN
3,432,722
TECHNOLOGY - 1.9%
COMPUTERS & OFFICE EQUIPMENT - 0.7%
Comdisco, Inc.:
9 3/4%, 1/15/97 Baa2 150,000 165,052 200336AF
9.3%, 6/27/00 Baa2 1,250,000 1,421,875 20033RBF
9 1/4%, 7/6/00 Baa2 375,000 426,562 20033RBH
2,013,489
ELECTRONICS - 0.9%
Grupo Condumex SA de CV,
6 1/4%, 7/27/96 (a) - 2,750,000 2,691,562 399904AA
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 9 5/8%,
11/15/99 A3 942,000 973,312 277461AJ
TOTAL TECHNOLOGY 5,678,363
MOODY'S MOODY'S
RATINGS PRINCIPAL VALUE RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1) (UNAUDITED) AMOUNT (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
AMR Corp. 9 1/2%, 7/15/98 Baa3 $ 250,000 $ 273,130 001765AN
Southwest Airlines Co. secured
9.40%, 7/1/01 Baa1 245,000 280,748 844741AD
553,878
TRUCKING & FREIGHT - 0.0%
Consolidated Freightways, Inc.
9 1/8%, 8/15/99 Baa3 100,000 107,987 209237AC
TOTAL TRANSPORTATION 661,865
UTILITIES - 2.0%
ELECTRIC UTILITY - 1.6%
Gulf States Utilities Co.
9.72%, 7/1/98 Baa3 1,340,000 1,473,598 402550BW
Long Island Lighting Co.:
7.3%, 7/15/99 Baa3 1,000,000 1,017,580 542671CK
8.75%, 5/1/96 Baa3 1,000,000 1,061,460 542671CF
Middle South Energy, Inc. 1st mtg.
11%, 5/1/00 Baa3 788,000 795,880 595822AC
United Illuminating Co. 9.76%,
1/2/06 Baa3 337,000 363,286 910637AJ
4,711,804
GAS - 0.4%
Southwest Gas Co. 9 3/4%,
6/15/02 Ba1 1,250,000 1,399,075 844895AK
TOTAL UTILITIES 6,110,879
TOTAL NONCONVERTIBLE BONDS
(Cost $86,206,954) 82,787,452
U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS - 41.0%
U.S. TREASURY OBLIGATIONS - 35.8%
8.875%, 7/15/95 Aaa 7,100,000 7,519,326 912827WK
7 3/4%, 2/15/95 Aaa 2,905,000 3,003,044 912827YG
8 7/8%, 2/15/96 Aaa 4,870,000 5,244,357 912827TF
9 3/8%, 4/15/96 Aaa 10,100,000 11,029,503 912827XK
8 1/2%, 5/15/97 Aaa 1,000,000 1,097,500 912827UW
6%, 12/31/97 Aaa 5,700,000 5,830,017 912827J2
9 1/4%, 8/15/98 Aaa 8,000,000 9,177,520 912827WN
6 3/8%, 1/15/00 Aaa 9,200,000 9,464,500 912827J3
8 3/8%, 8/15/00 Aaa 2,500,000 2,632,031 912810BV
7 7/8%, 8/15/01 Aaa 2,000,000 2,220,620 912827B9
6 3/8%, 8/15/02 Aaa 1,300,000 1,321,333 912827G5
10 3/4%, 8/15/05 Aaa 3,230,000 4,376,133 912810DR
9 7/8%, 11/15/15 Aaa 7,500,000 10,101,525 912810DT
8 7/8%, 8/15/17 Aaa $ 2,405,000 $ 2,975,442 912810DZ
8 1/8%, 8/15/19 Aaa 17,750,000 20,456,875 912810ED
8 1/2%, 11/15/20 Aaa 6,400,000 7,305,024 912827ZN
12%, 8/15/23 Aaa 2,605,000 3,910,339 912810DF
107,665,089
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.2%
Financing Corporation:
9.80%, 4/6/18 Aaa 1,900,000 2,484,844 317705AE
8.60%, 9/26/19 Aaa 1,950,000 2,287,594 317705AP
Coupon Strips Series D,
2/3/97 Aaa 1,073,000 920,902 31771JQQ
Government Trust Certificates
8%, 5/15/98 Aaa 1,876,466 1,988,285 38375HAR
Private Export Funding Corporation
secd. notes, Series CC,
9 1/2%, 3/31/99 Aaa 1,600,000 1,852,560 742651BE
Tennessee Valley Authority
8 1/4%, 11/15/96 Aaa 5,715,000 6,156,141 880591BC
15,690,326
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS (Cost $123,317,093) 123,355,415
U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES - 25.5%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.0%
8%, 7/1/16 Aaa 63,279 65,494 31343FCS
8 1/2%, 9/1/19 Aaa 85,159 89,151 31347WD9
9%, 11/1/01 to 10/1/16 Aaa 2,068,066 2,188,769 31341SBM
10.00%, 6/1/20 Aaa 485,733 532,484 313959TD
10 1/2%, 5/1/09 to 7/1/15 Aaa 1,736,051 1,895,232 313411NC
11%, 12/1/15 to 7/1/19 Aaa 1,456,331 1,611,066 31341JVG
11 1/2%, 2/1/15 to 6/1/20 Aaa 1,052,443 1,169,530 313401RX
11 3/4%, 9/1/13 Aaa 138,861 153,962 31340AHS
12%, 2/1/13 to12/1/14 Aaa 192,044 217,612 31341C3S
12 3/4%, 8/1/12 to 10/1/13 Aaa 204,579 236,802 31340XBP
13 1/2%, 1/1/23 Aaa 719,360 842,097 31290KVV
9,002,199
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 11.5%
5 1/2%, 10/1/08 to 12/1/08 Aaa 2,024,248 1,930,628 31370YLW
6 1/2%, 1/1/24 to 3/1/24 Aaa 18,688,316 18,185,979 993130VJ
7 1/2%, 5/1/07 to 6/1/08 Aaa 823,433 850,961 31369XBM
8%, 7/1/02 to 6/1/03 Aaa 277,903 289,888 31365DB3
8 1/2%, 6/1/17 to 9/1/17 Aaa 518,034 549,635 313613QY
9%, 11/1/01 to 9/1/06 Aaa 8,841,226 9,399,836 313614V2
10 1/2%, 4/1/01 Aaa 219,509 234,737 31365DAD
10 3/4%, 8/1/10 to 5/1/14 Aaa 718,895 796,178 31360FGA
11%, 8 /1/10 to 6/1/15 Aaa 522,099 586,058 313626TA
MOODY'S
RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES - CONTINUED
FEDERAL NATIONAL MORTGAGE ASSOCIATION - CONTINUED
11 1/4%, 5/1/01 Aaa $ 174,359 $ 195,282 31360JG8
11 1/2%, 8/1/14 Aaa 380,368 429,578 31361BMX
12 1/4%, 6/1/13 Aaa 126,846 143,256 31360D2C
12 1/2%, 1/1/15 Aaa 105,850 120,670 31360TLT
13%, 1/1/15 Aaa 109,414 125,691 31360NUQ
13 1/4%, 2/1/13 to 10/1/13 Aaa 27,758 31,884 31360YT5
13 1/2%, 8/1/14 to11/1/14 Aaa 96,499 111,096 31360MWE
14%, 3/1/12 to 10/1/14 Aaa 435,118 505,282 31360MWB
34,486,639
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 11.0%
6 1/2%, 11/15/23 to 2/15/24 Aaa 3,812,992 3,708,138 36203FGK
7%, 2/15/22 to 9/15/23 Aaa 3,396,453 3,401,757 36224SXX
7 1/2%, 11/15/22 to 10/15/23 Aaa 8,888,254 9,127,091 36224GZU
8%, 4/15/22 to 9/15/23 Aaa 4,298,916 4,508,492 36203XGL
8 1/2%, 3/15/17 to 2/15/23 Aaa 3,722,096 3,952,290 36203LMW
9%, 4/15/16 to 10/15/21 Aaa 4,964,843 5,329,359 362155S2
9 1/2%, 5/15/18 to 10/15/20 Aaa 626,804 679,315 36218RYC
11%, 6/15/10 to 1/15/16 Aaa 1,158,916 1,321,169 36215PVW
11 1/2%, 3/15/10 to 8/15/13 Aaa 981,966 1,131,719 362067FA
33,159,330
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $76,293,790) 76,648,168
FOREIGN GOVERNMENT OBLIGATIONS - 0.7%
Malaysia euro 9 1/2%, 10/31/96 A2 820,000 894,210 5609049C
Victorian Public Authorities
Finance Agency 8.45%,
10/1/2001 A1 1,000,000 1,117,000 926391AC
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $2,039,408) 2,011,210
MATURITY
AMOUNT
REPURCHASE AGREEMENTS - 5.3%
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.47% dated
2/28/94 due 3/1/94 $ 16,068,549 16,067,000
TOTAL INVESTMENTS - 100%
(Cost $303,924,245) $ 300,869,245
LEGEND
(a) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $11,304,099 or 3.9% of net
assets.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S S&P
RATINGS RATINGS
Aaa, Aa, A 78.2% AAA, AA, A 78.7%
Baa 13.8% BBB 12.5%
Ba 1.3% BB 1.1%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 1.4%.
INCOME TAX INFORMATION
At February 28, 1994, the aggregate cost of investment securities for
income tax purposes was $303,980,854. Net unrealized depreciation
aggregated $3,111,609, of which $2,037,591 related to appreciated
investment securities and $5,149,200 related to depreciated investment
securities.
The fund hereby designates $381,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
February 28, 1994
ASSETS
Investment in securities, at value (including repurchase agreements of $16,067,000) (cost $303,924,245) $ 300,869,245
(Notes 1 and 2) - See accompanying schedule
Receivable for investments sold 4,461,331
Interest receivable 3,598,728
Receivable from investment adviser for expense reductions (Note 5) 159,972
Total assets 309,089,276
LIABILITIES
Payable to custodian bank $ 85,283
Payable for investments purchased 20,079,317
Payable for fund shares redeemed 72,588
Dividends payable 153,421
Accrued management fee 76,953
Other payables and accrued expenses 118,185
Total liabilities 20,585,747
NET ASSETS $ 288,503,529
Net Assets consist of (Note 1):
Paid in capital $ 290,710,418
Undistributed net investment income 812,462
Accumulated undistributed net realized gain (loss) on investments (35,649)
Net unrealized appreciation (depreciation) on investment securities (3,055,000)
NET ASSETS, for 26,634,875 shares outstanding $ 288,503,529
NET ASSET VALUE, offering price and redemption price per share ($288,503,529 (divided by) 26,634,875 shares) $10.83
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended February 28, 1994
INVESTMENT INCOME $ 13,790,382
Interest
EXPENSES
Management fee (Note 4) $ 610,385
Transfer agent fees (Note 4) 419,436
Accounting fees and expenses (Note 4) 79,841
Non-interested trustees' compensation 1,131
Custodian fees and expenses 33,756
Registration fees 87,898
Audit 15,271
Legal 3,097
Miscellaneous 1,772
Total expenses before reductions 1,252,587
Expense reductions (Note 5) (644,001) 608,586
Net investment income 13,181,796
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3) 1,625,689
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities (7,742,283)
Net gain (loss) (6,116,594)
Net increase (decrease) in net assets resulting from operations $ 7,065,202
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED FOUR MONTHS YEAR ENDED
FEBRUARY 28, ENDED OCTOBER 31,
1994 FEBRUARY 28, 1992
1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 13,181,796 $ 2,529,616 $ 4,284,181
Net investment income
Net realized gain (loss) on investments 1,625,689 59,118 1,516,990
Change in net unrealized appreciation (depreciation) on investments (7,742,283) 3,410,551 (584,433)
Net increase (decrease) in net assets resulting from operations 7,065,202 5,999,285 5,216,738
Distributions to shareholders (12,348,634) (2,451,588) (4,259,084)
From net investment income
From net realized gain (1,625,689) (1,395,998) (287,653)
In excess of net realized gain (603,620) - -
Total distributions (14,577,943) (3,847,586) (4,546,737)
Share transactions 329,923,999 49,854,118 105,408,120
Net proceeds from sales of shares
Reinvestment of distributions from: 10,638,672 2,014,595 3,276,643
Net investment income
Net realized gain 1,941,084 1,301,100 266,949
Cost of shares redeemed (169,838,606) (18,119,062) (62,617,445)
Net increase (decrease) in net assets resulting from share transactions 172,665,149 35,050,751 46,334,267
Total increase (decrease) in net assets 165,152,408 37,202,450 47,004,268
NET ASSETS
Beginning of period 123,351,121 86,148,671 39,144,403
End of period (including undistributed net investment income of $812,462, $108,004,$ 288,503,529 $ 123,351,121 $ 86,148,671
and $29,976 respectively)
OTHER INFORMATION
Shares
Sold 29,686,344 4,615,505 9,692,453
Issued in reinvestment of distributions from: 959,559 184,714 301,485
Net investment income
Net realized gain 175,823 121,598 24,856
Redeemed (15,332,829) (1,671,882) (5,777,014)
Net increase (decrease) 15,488,897 3,249,935 4,241,780
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED FEBRUARY 28, 1994
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity U.S. Bond 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 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which market quotations are not readily available are valued
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
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. Interest income, which includes accretion of original
issue discount, is accrued as earned.
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 declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date. Mortgage security paydown gains
(losses) are taxable as ordinary income and, therefore, increase (decrease)
taxable ordinary income available for distribution.
Income and capital gain distributions 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
mortgage-backed securities and losses deferred due to wash sales.
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective March 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of February 28,1993 have been reclassified to
reflect a decrease in paid in capital of $277,287, an increase in
undistributed net investment income of $567,177 and a decrease in
accumulated net realized gain on investments of $289,890.
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.
INDEXED SECURITIES. The fund may invest in indexed securities whose value
is linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other reference instruments.
Indexed securities may be more volatile than the reference instrument
itself, but any loss is limited to the amount of the original investment.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $469,314,921 and $299,646,357, respectively, of which U.S.
government and government agency obligations aggregated $393,410,525 and
$272,402,630, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .32% of the fund's average net
assets.
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. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .32% of average net assets. For the
period, the reimbursement reduced the expenses by $644,001.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Institutional Trust and the
Shareholders of Fidelity U.S. Bond Index Portfolio:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for Moody's and Standard
& Poor's ratings), and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Fidelity U.S. Bond Index
Portfolio (a fund of Fidelity Institutional Trust) at February 28, 1994,
the results of its operations for the year then ended, the changes in its
net assets and the financial highlights for the periods indicated in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fidelity U.S. Bond 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, 1994 by correspondence
with the custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse
Boston, Massachusetts
April 20, 1994
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.
FIDELITY U.S. BOND INDEX PORTFOLIO
A PORTFOLIO OF FIDELITY INSTITUTIONAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 29, 1994
This Statement is not a prospectus but should be read in conjunction with
the Portfolio's current Prospectus (dated April 29, 1994) . Please
retain this document for future reference. The Financial Statements for
the fiscal year ended February 28, 1994 are incorporated into the
Portfolio's Prospectus. To obtain an additional copy of this Statement,
the Prospectus and Financial Statements, please call Fidelity Distributors
Corporation.
For more information or assistance in opening a new account:
INDIVIDUAL ACCOUNTS (Participant)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact your plan
sponsor directly.
RETIREMENT PLAN LEVEL ACCOUNTANTS (Trustees, Plan Sponsors)
Corporate Clients 800-962-1375
"Not for Profit" Clients 800-343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 800-843-3001
TABLE OF CONTENTS PAGE
Investment Policies and Limitations 2
Portfolio Transactions 9
Valuation of Portfolio Securities 10
Portfolio Performance 10
Additional Purchase and Redemption Information 15
Distributions and Taxes 15
FMR 16
Trustees and Officers 16
Management Contract 18
Distribution and Service Plan 19
Contracts with Companies Affiliated with FMR 20
Distributors 20
Description of the Trust 20
Financial Statements 22
Appendix 22
Investment Manager
Fidelity Management & Research Company (FMR)
Distributor
Fidelity Distributors Corporation (Distributors)
Transfer Agent
Fidelity Investments Institutional Operations Company (FIIOC or the
Transfer Agent)
Custodian
The Bank of New York
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Portfolio's assets
that may be invested in any security or other assets or sets forth a policy
regarding quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the Portfolio's acquisition
of such security or other asset. Accordingly, any subsequent change in
values, net assets, or other circumstances will not be considered when
determining whether the investment complies with the Portfolio's investment
policies and limitations.
The Portfolio's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding shares" (as
defined in the Investment Company Act of 1940 (1940 Act)) of the Portfolio.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
THE FOLLOWING ARE THE PORTFOLIO'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE PORTFOLIO MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued
or guaranteed by the government of the United States or any of its agencies
or instrumentalities) if, as a result thereof, (a) more than 25% of the
value of its total assets would be invested in the securities of a single
issuer, or (b) with respect to 75% of its total assets, more than 5% of the
value of its total assets would be invested in the securities of a single
issuer or it would own more than 10% of the outstanding voting securities
of any single issuer;
(2) issue bonds or any other class of securities preferred over shares of
the Portfolio in respect of the Portfolio's assets or earnings, provided
that the Portfolio may establish additional series or classes of shares in
accordance with its Declaration of Trust;
(3) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute short sales;
(4) purchase securities on margin, except that the Portfolio may obtain
such short-term credits as are necessary for the clearance of transactions,
and provided that the Portfolio may make initial and variation margin
payments in connection with transactions in futures contracts and options
on futures contracts;
(5) borrow money, except that the Portfolio may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (less liabilities other
than borrowings). Any borrowings that come to exceed 33 1/3% of the value
of the Portfolio's total assets by reason of a decline in net assets will
be reduced within three days to the extent necessary to comply with the 33
1/3% limitation. The Portfolio may not purchase any security while
borrowings representing more than 5% of its net assets are outstanding;
(6) underwrite securities issued by others, except to the extent that the
Portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than obligations issued
or guaranteed by the U.S. government or its agencies or instrumentalities),
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;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the Portfolio from purchasing and
selling investment vehicles that deal in real estate or interests therein,
nor shall this prevent the Portfolio from purchasing interests in pools of
real estate mortgage loans);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the Portfolio from
purchasing and selling futures contracts or marketable securities issued by
companies or other entities);
(10) lend any security or make any other loan, except (a) through the
purchase of a portion of an issue of debt securities in accordance with its
investment objective, policies, and limitations, or (b) by engaging in
repurchase agreements with respect to portfolio securities, if, as a
result, more than 33 1/3% of the value of its total assets would be lent to
other parties;
Investment limitation (5) is construed in conformity with the 1940 Act;
and, accordingly, "three days" means three days, exclusive of Sundays and
holidays.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL:
(i) The Portfolio does not currently intend to sell securities short.
(ii) The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements are treated as
borrowings for purposes of fundamental investment limitation (5)). The
Portfolio will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings after such borrowings would exceed 15% of
the Portfolio's total assets.
(iii) The Portfolio does not currently intend to purchase any security or
enter into a repurchase agreement if, as a result, more than 10% of its net
assets would be invested in securities that are deemed illiquid because
they are subject to legal or contractual restrictions on resale or because
they cannot be sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(iv) The Portfolio does not currently intend to invest in securities of
real estate investment trusts that are not readily marketable, or to invest
in securities of real estate limited partnerships that are not listed on
the New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(v) The Portfolio does not currently intend to lend assets other than
securities to other parties, except by (i) lending money (up to 7.5% of the
Portfolio's net assets) to a registered investment company for which FMR or
an affiliate serves as investment adviser or (ii) inquiring loans, loan
participation's, or other forms of direct debt instruments and, in
connection therewith, assuming any associated unfunded commitments of the
sellers. (this limitation does not apply to purchases of debt securities
or to repurchase agreement s ).
(vi) The Portfolio does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Our limitations
to (a) and (b) do not apply to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation or
merger.
(vii) The Portfolio does not currently intend to purchase the securities
of any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(viii) The Portfolio does not currently intend to purchase warrants,
valued at the lower of cost or market, in excess of 5% of the Portfolio's
net assets. Included in that amount, but not to exceed 2% of the
Portfolio's net assets, may be warrants which are not listed on the New
York Stock Exchange or the American Stock Exchange. Warrants acquired by
the Portfolio in units or attached to securities are not subject to these
restrictions.
(ix) The Portfolio does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
(x) The Portfolio does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
For the Portfolio's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions" on
page 5.
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (SEC), the Portfolio may engage in
certain transactions with banks that are, or may be considered to be,
"affiliated persons" of the Portfolio under the Investment Company Act of
1940. Such transactions may be entered into only pursuant to procedures
established, and periodically reviewed, by the Board of Trustees. These
transactions may include repurchase agreements with custodian banks;
purchases, as principal, of obligations of and repurchase agreements with
the 50 largest U.S. banks (measured by deposits); transactions in municipal
securities; and transactions in U.S. government securities with affiliated
banks that are primary dealers in these securities.
DELAYED-DELIVERY TRANSACTIONS. The Portfolio may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by the Portfolio to purchase or sell specific securities at a
predetermined price and/or yield, with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered. The Portfolio may receive fees
for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the Portfolio
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because the Portfolio is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the Portfolio's other investments. If the Portfolio
remains substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result in a
form of leverage. When delayed-delivery purchases are outstanding, the
Portfolio will set aside appropriate liquid assets in a segregated
custodial account to cover its purchase obligations. When the Portfolio
has sold a security on a delayed-delivery basis, the Portfolio does not
participate in further gains or losses with respect to the security. If
the other party to a delayed-delivery transaction fails to deliver or pay
for the securities, the Portfolio could miss a favorable price or yield
opportunity, or could suffer a loss.
The Portfolio may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees , FMR
determines the liquidity of the Portfolio's investments and, through
reports from FMR the Board monitors investments in illiquid instruments.
In determining the liquidity of the Portfolio's investments, FMR may
consider various factors including (1) the frequency of trades and
quotations, (2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of
the security (including any demand or tender features) and (5) the nature
of the marketplace for trades (including the ability to assign or offset
the Portfolio's rights and obligations relating to the investment).
Investments currently considered by the Portfolio to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities and over-the-counter options, also FMR may
determine some restricted securities, government-stripped fixed-rate
mortgage-backed securities, loans and other direct debt instruments, and
swap agreements to be illiquid. However, with respect to over-the-counter
(OTC) options the Portfolio writes, all or a portion of the value of the
underlying instrument may be illiquid depending on the assets held to cover
the option and the nature and terms of any agreement the Portfolio may have
to close to the option before expiration. In the absence of market
quotations, illiquid investments are priced at fair value as determined in
good faith by a committee appointed by the Board of Trustees . If
through a change in values, net assets or other circumstances, the
Portfolio were in a position where more than 10% of its net assets were
invested in illiquid securities, it would seek to take appropriate steps to
protect liquidity.
INDEXED SECURITIES The Portfolio may purchase securities whose
prices are indexed to the prices of other securities, securities
indices or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity
or coupon rate is determined by reference to a specific instrument or
statistic. A mortgage indexed security, for example, could be
synthesized to replicate the performance of mortgage securities and
the characteristics of direct ownership.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are indexed,
and may also be influenced by interest rate changes. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Portfolio has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The Portfolio intends to comply with Section 4.5 under
the Commodity Exchange Act, which limits the extent to which the Portfolio
can commit assets to initial margin deposits and option premiums.
In addition, the Portfolio will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of the
Portfolio's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options if,
as a result, the Portfolio's total obligations upon settlement or exercise
of purchased futures contracts and written put options would exceed 25% of
its total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the Portfolio would
exceed 5% of the Portfolio's total assets. These limitations do not apply
to options attached to, or acquired or traded together with their
underlying securities, and do not apply to securities that incorporate
features similar to options.
The above limitations on the Portfolio's investments in futures contracts
and options, and the Portfolio's policies regarding futures contracts and
options discussed elsewhere in this Statement of Additional Information may
be changed as regulatory agencies permit.
FUTURES CONTRACTS. When the Portfolio purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future
date. When the Portfolio sells a futures contract, it agrees to sell the
underlying instrument at a specified future date. The price at which the
purchase and sale will take place is fixed when the Portfolio enters into
the contract. Some currently available futures contracts are based on
specific securities, such as U.S. Treasury bonds or notes, and some are
based on indices of securities prices, such as the Bond Buyer Municipal
Bond Index. Futures can be held until their delivery dates, or can be
closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the Portfolio's exposure to positive and
negative price fluctuations in the underlying instrument, much as if the
Portfolio had purchased the underlying instrument directly. When the
Portfolio sells a futures contract, by contrast, the value of its futures
position will tend to move in a direction contrary to the market. Selling
futures contracts, therefore, will tend to offset both positive and
negative market price changes, much as if the underlying instrument had
been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker known
as a futures commission merchant (FCM), when the contract is entered into.
Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the Portfolio's investment limitations. In the
even t of the bankruptcy of a FCM that holds margin on behalf of a
Portfolio, the Portfolio may be entitled to return of margin owed to it
only in proportion to the amount received by the FCM's other customers,
potentially resulting in losses to the Portfolio.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio
obtains the right (but not the obligations) to sell the option's underlying
instrument a fixed strike price. In return for this right, the Portfolio
pays the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contrancts. The
Portfolio may terminate its position in a put option it has purchased by
allowing it to expire or by exercising the option. If the option is
allowed to expire, the Portfolio will lose the entire premium it paid. If
the Portfolio exercises the option, it completes the sale of the underlying
instrument at the strike price. The Portfolio may also terminate a put
option position by closing it out in the secondary market at its current
price, if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the Portfolio writes a put option, it
takes the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the Portfolio assumes the obligation to
pay the strike price for the option's underlying instrument if the other
party to the option chooses to exercise it. When writing an option on a
futures contract the Portfolio will be required to make margin payments to
a FCM as described above for futures contracts. The Portfolio may seek to
terminate its position in a put option it writes before exercise by closing
out the option in the secondary market at its current price. If the
secondary market is not liquid for a put option the Portfolio has written,
however, the Portfolio must continue to be prepared to pay the strike price
while the option is outstanding, regardless of price changes, and must
continue to set aside assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the Portfolio to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options are
similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the effects
of a price decline. At the same time, because a call writer must be
prepared to deliver the underlying instrument in return for the strike
price, even if its current value is greater, a call writer gives up some
ability to participate in security price increases.
COMBINED POSITIONS. The Portfolio may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position. For example, the Portfolio may purchase a put option and write a
call option on the same underlying instrument, in order to construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call option
at a lower price, in order to reduce the risk of the written call option in
the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction costs
and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the Portfolio's current or
anticipated investments exactly. The Portfolio may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which it typically invests,
which involves a risk that the options or futures position will not track
the performance of the Portfolio's investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the
Portfolio's investments well. Options and futures prices are effected by
such factors as current and anticipated short-term interest rates, changes
in volatility of the underlying instrument, and the time remaining until
expiration of the contract, which may not affect security prices the same
way. Imperfect correlation may also result from differing levels of demand
in the options and futures markets and the securities markets, from
structural differences in how options and futures and securities are
traded, or from imposition of daily price fluctuation limits or trading
halts. The Portfolio may purchase or sell options and futures contracts
with a greater or lesser value than the securities it wishes to hedge or
intend to purchase in order to attempt to compensate for differences in
historical volatility between the contract and the securities, although
this may not be successful in all cases. If price changes in the
Portfolio's options or futures positions are poorly correlated with its
other investments, the positions may fail to produce anticipated gains or
result in losses that are not offset by gains in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the
Portfolio to enter into new positions or close out existing positions. If
the secondary market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require the Portfolio to
continue to hold a position until delivery or expiration regardless of
changes in its value. As a result, the Portfolio's access to other assets
held to cover its options or futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size and
strike price, the terms of OTC options (options not traded on exchanges)
generally are established through negotiation with the other party to the
option contract. While this type of arrangement allows the Portfolio
greater flexibility to tailor an option to its needs, OTC options generally
involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they are
traded.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Portfolio will
comply with guidelines established by the SEC with respect to coverage of
options and futures strategies by mutual funds, and, if the guidelines so
require, will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account
cannot be sold while the futures or options strategy is outstanding, unless
they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Portfolio's
assets could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.
LOANS AND OTHER DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental, or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve the
risk of loss in case of default or insolvency of the borrower. Direct debt
instruments may offer less legal protection to the Portfolio in the event
of fraud or misrepresentation. In addition, loan participations involve a
risk of insolvency of the lending bank or other financial intermediary.
Direct debt instruments may also include standby financing commitments that
obligate the Portfolio to supply additional cash to the borrower on demand.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio purchases
a security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. The Portfolio may engage in a repurchase agreement with respect
to any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the Portfolio in
connection with bankruptcy proceedings), it is the Portfolio's current
policy to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the Portfolio may be obligated to pay all or part
of the registration expense and a considerable period may elapse between
the time it decides to seek registration and the time the Portfolio may be
permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the
Portfolio might obtain a less favorable price than prevailed when it
decided to seek registration of the security.
REVERSE REPURCHASE AGREEMENTS In a reverse repurchase agreement, the
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the Portfolio will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The Portfolio will enter into reverse repurchase agreements only with
parties whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the
Portfolio's assets and may be viewed as a form of leverage.
SECURITIES LENDING. The Portfolio may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
and a subsidiary of FMR Corp.
Securities lending allows the Portfolio to retain ownership of the
securities loaned and, at the same time, to earn additional income. Since
there may be delays in recovery of loaned securities or even a loss of
rights in collateral supplied should the borrower fail financially, loans
will be made only to parties deemed by FMR to be of good standing.
Furthermore, they will only be made if, in FMR's judgment, the
consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that the
Portfolio may engage in loan transactions only under the following
conditions: (1) the Portfolio must receive at least 100% collateral in the
form of cash or cash equivalents (e.g., U.S. Treasury bills or notes) from
the borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis) rises
above the value of the collateral; (3) after giving notice, the Portfolio
must be able to terminate the loan at any time; (4) the Portfolio must
receive reasonable interest on the loan or a flat fee from the borrower, as
well as amounts equivalent to any dividends, interest, or other
distributions on the securities loaned and to any increase in market value;
(5) the Portfolio may pay only reasonable custodian fees in connection with
the loan; and (6) the Board of Trustees must be able to vote proxies on the
securities loaned, either by terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the Portfolio is authorized to invest. Investing this cash subjects
that investment, as well as the security loaned, to market forces (i.e.,
capital appreciation or depreciation).
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the Portfolio's exposure to long or
short-term interest rates, mortgage securities, corporate borrowing rates,
or other factors such as security prices or inflation rates. Swap
agreements can take many different forms and are known by a variety of
names. The Portfolio is not limited to any particular form of swap
agreement if FMR determines it is consistent with the Portfolio's
investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift the Portfolio's investment exposure from
one type of investment to another. For example, if the Portfolio agreed to
pay fixed rates in exchange for floating rates while holding fixed-rate
bonds, the swap would tend to decrease the Portfolio's exposure to
long-term interest rates. Caps and floors have an effect similar to buying
or writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of the Portfolio's investments
and its share price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate or, other factors that determine the
amounts of payments due to and from the Portfolio. If a swap agreement
calls for payments by the Portfolio, the Portfolio must be prepared to make
such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. The Portfolio expects to be able
to eliminate its exposure under swap agreements either by assignment or
other disposition, or by entering into an offsetting swap agreement with
the same party or a similarly creditworthy party.
The Portfolio will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
If the Portfolio enters into a swap agreement on a net basis, it will
segregate assets with a daily value at least equal to the excess, if any,
of the Portfolio's accrued obligations under the swap agreement over the
accrued amount the Portfolio is entitled to receive under the agreement.
If the Portfolio enters into a swap agreement on other than a net basis, it
will segregate assets with a value equal to the full amount of the
Portfolio's accrued obligations under the agreement.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Portfolio by FMR pursuant to authority contained in the
management contract. FMR also is responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer
firm ; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commis s ions.
The Portfolio may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolio and other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolio may be useful to FMR in rendering investment
management services to the Portfolio and its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying out
its obligations to the Portfolio. The receipt of such research has not
reduced FMR's normal independent research activities; however, it enables
FMR to avoid the additional expenses that could be incurred if FMR tried to
develop comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolio to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolio or its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by, and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the Portfolio or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI, if the commissions are
fair, reasonable, and comparable to commissions charged by non-affiliated
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such regulations, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC
rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolio and review the commissions paid by the Portfolio over
representative periods of time to determine whether they are reasonable in
relation to the benefits to the Portfolio.
For the fiscal year ended February 28, 1994 and the period November 1, 1992
through February 28, 1993 the Portfolio's annual portfolio turnover rate
amounted to 160% and 89% (annualized), respectively. Because a higher
turnover rate increases transaction costs and may increase taxable capital
gains, FMR carefully weighs the anticipated benefits of short-term
investing against these consequences.
From time to time the Trustees will review whether the recapture for the
benefit of the Portfolio of some portion of the brokerage commissions or
similar fees paid by the Portfolio on portfolio transactions is legally
permissible and advisable. The Portfolio seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture agreements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine, in the exercise of their business
judgment, whether it would be advisable for the Portfolio to seek such
recapture.
Although the Trustees and officers of the Trust are substantially the same
as those of other funds managed by FMR, investment decisions for the
Portfolio are made independently from those of other funds or portfolios
managed by FMR or accounts managed by FMR affiliates. It sometimes happens
that the same security is held in the portfolio of more than one of these
funds or accounts. Simultaneous transactions are inevitable when several
funds or portfolios are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund.
When two or more funds are engaged simultaneously in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or volume of the security as far as the Portfolio is
concerned. In other cases, however, the ability of the Portfolio to
participate in volume transactions will produce better executions and
prices for the Portfolio. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
The net asset value per share (NAV) of the Portfolio is determined by
Fidelity Service Co. (Service), under procedures established by the Board
of Trustees of the Trust. Portfolio securities are valued primarily on the
basis of valuations furnished by a pricing service which utilizes both
dealer-supplied valuations and electronic data processing techniques which
take into account appropriate factors such as institutional-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type
of issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or OTC prices, since such
valuations are believed to reflect more accurately the fair value of such
securities. There are a number of pricing services available and the
Trustees or officers acting on behalf of the Trustees, on the basis of
ongoing evaluation of these services, may use other pricing services or
discontinue the use of any pricing service in whole or in part.
Securities not valued by the pricing service and for which quotations are
readily available are valued at market values determined on the basis of
their latest available bid prices as furnished by recognized dealers in
such securities. Securities and other assets for which quotations are not
readily available (including restricted securities, if any) are valued at
their fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the Board of
Trustees of the Trust.
PORTFOLIO PERFORMANCE
The Portfolio may quote its performance in various ways. All performance
information supplied in advertising is historical and is not intended to
indicate future returns. Share price, yield and total returns fluctuate in
response to market conditions and other factors, and the value of shares
when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for the Portfolio used in advertising are
computed by dividing interest and dividend income for a given 30-day or one
month period, net of expenses, by the average number of shares entitled to
receive distributions during the period, dividing this figure by the NAV at
the end of the period and annualizing the result (assuming compounding) in
order to arrive at an annual percentage rate. Income is calculated for
purposes of yield quotations in accordance with standardized methods
applicable to all stock and bonds funds. Dividends from equity investments
are treated as if they were accrued on a daily basis solely for the
purposes of yield calculations. In general, interest income is reduced
with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income. Capital gains and losses generally are
excluded from the calculation.
I nvestors should recognize that in periods of declining interest
rates, yield will tend to be somewhat higher than t he prevailing
market rates, and that in periods of rising interest rates, the yield will
tend to be somewhat lower. Also, w hen interest rates are falling,
the inflow of net new money to the Portfolio from the continuous sale of
shares will l ikely be invested in instruments producing lower yields
than the balance of the Portfolio's holdings, thereby reduc i ng the
current yield. In periods of rising interest rates, the opposite can be
expected to occur.
T he distribution rate, which expresses the historical amount of
income dividends paid as a percentage of the s hare price may also be
quoted. The distribution rate is calculated by dividing the daily dividend
per share by its o ffering price (including the maximum sales charge)
for each day in the 30-day period, averaging the resulting
per c entages, then expressing the average rate in annualized terms.
Income calculated for the purposes of calculating the yield differs from
income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, the yield may not equal its distribution
rate, the income paid to your account, or the income reported in financial
statements.
TOTAL RETURN CALCULATIONS. TOTAL RETURNS quoted in advertising reflect all
aspects of return, including the effect of reinvesting dividends and
capital gain distributions, if any, and any change in the NAV over the
period. AVERAGE ANNUAL TOTAL RETURNS are calculated by determining the
growth or decline in value of a hypothetical historical investment in the
Portfolio over a stated period, and then calculating the annually
compounded percentage rate that would have produced the same result if the
rate of growth or decline in value had been constant over the period. For
example, a cumulative return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate that
would equal 100% growth on a compounded basis in ten years. While average
annual total returns are a convenient means of comparing investment
alternatives, investors should realize that performance is not constant
over time, but changes from year to year, and that average annual returns
represent average figures as opposed to actual year-to-year performance.
In addition to average annual total returns, unaveraged or CUMULATIVE TOTAL
RETURNS reflecting the simple change in value of an investment over a
stated period may be quoted. Average annual and cumulative total returns
may be quoted as a percentage or as a dollar amount, and may be calculated
for a single investment, a series of investments, and/or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. An example of this type of
illustration is given on pag e 15. Total returns and other
performance information may be quoted numerically or in a table, graph or
similar illustration.
T he following chart shows total returns for the Portfolio for the
periods ended February 28, 1994.
A verage Annual Total Returns C umulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
O ne Year L ife of Portfolio* O ne Year Life of Portfolio*
</TABLE>
5 .38% 11.00% 5.38% 51.55%
* Life of Portfolio: March 8, 1990 (Commencement of Operations) to
February 28, 1994.
NET ASSET VALUE. Charts and graphs using net asset values, adjusted net
asset values, and benchmark indices may be used to exhibit performance. An
adjusted NAV includes any distributions paid by the Portfolio and reflects
all elements of its return. Unless otherwise indicated, the Portfolio's
adjusted NAVs are not adjusted for sales charges, if any.
DURATION. Duration is a measure of volatility commonly used in the bond
market. Bonds with long durations are more volatile, or interest rate
sensitive, than bonds with short durations. (Interest rate sensitivity is
the magnitude of the change in a bond's price for a given change in a
bond's yield to maturity.) Duration also can be calculated for other fixed
income securities, or for portfolios of fixed income securities.
Unlike the maturity of a bond, which reflects only the time remaining
until the final principal payment is made to the bondholders, duration
reflects all of the coupon payments made to bondholders during the life of
the bond, as well as the final principal payment made when the bond
matures. More precisely, duration is the weighted average time remaining
for the payment of all cash flows generated by a bond, with the weights
being the present value of these cash flows. Present values are calculated
using the bond's yield to maturity.
Because there is only one payment to take into account, the duration of a
bond that pays all of its interest at maturity (a zero coupon security) is
the same as its maturity. The duration of a coupon bearing security will
be shorter than its maturity, however, because of the effect of its regular
interest payments. Generally, bonds with lower coupons or longer
maturities will have longer durations, and thus be more volatile, than
otherwise similar bonds with higher coupons or shorter maturities.
With the investment in mortgage-backed securities, callable corporate
bonds or other bonds with imbedded options, there is a degree of
uncertainty regarding the timing of these securities' cash flows. As a
result, in order to calculate the durations of these securities, forecasts
of their probable cash flow patterns must be made. These forecasts require
various assumptions to be made as to future interest rate levels and, for
example, mortgage prepayment r ates. Because duration calculation
for these types of securities are based in part on assumptions, duration
figures m ay not be precise and may change as economic conditions
change. The Fund's duration on February 28, 1994 was 4 .6 years.
P ERFORMANCE COMPARISONS. The Portfolio's performance may be
compared to the performance of other m utual funds in general, or to
the performance of particular types of mutual funds. These comparisons may
be ex pr essed as mutual fund rankings prepared by Lipper Analytical
Services, Inc. (Lipper), an independent service lo c ated in Summit,
New Jersey that monitors the performance of mutual funds. Lipper generally
ranks funds on the b asis of total return, assuming reinvestment of
distributions, but does not take sales charges or redemption fees into
c onsideration and is prepared without regard to tax consequences.
Lipper may also rank funds based on yield. In a ddition to mutual
fund rankings, the Portfolio's performance may be compared to mutual fund
performance indices p repared by Lipper.
From time to time, the Portfolio's performance may also be compared to
other mutual funds tracked by financial or business publications and
periodicals. For example, the Portfolio may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating service
that rates mutual funds on the basis of risk-adjusted performance.
Rankings that compare the performance of Fidelity funds to one another in
appropriate categories over specific periods of time may also be quoted in
advertising.
The Portfolio may compare in advertising to Certificates of Deposits
(CDs) or other investments issued by banks. Mutual funds differ from bank
investments in several respects. For example, the Portfolio may offer
greater liquidity or higher potential returns than CDs, and the Portfolio
does not guarantee your principal of your return.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index
(CPI)), and combinations of various capital markets. The performance of
these capital markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to
those of the Portfolio. Ibbotson calculates total returns in the same
method as the Portfolio. The Portfolio may also compare performance to
that of other compilations or indices that may be developed and made
available in the future.
The Portfolio may compare its performance, or the performance of
securities in which it may invest, to averages published by IBC USA
(Publications), Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. THE BOND FUND REPORT AVERAGES All Taxable,
which is reported in the BOND FUND REPORT , covers over 100 taxable bond
funds. When evaluating comparisons to money market funds, investors should
consider the relevant differences in investment objectives and policies.
Specifically, money market funds invest in short-term, high-quality
instruments and seek to maintain a stable $1.00 share price, however, the
Portfolio invests in longer-term instruments and its share price changes
daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging;. In addition, Fidelity may
quote financial or business publications or periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques.
The Portfolio may present its fund number, Quotron number, and CUSIP
number, and discuss or quote its current portfolio manager.
The Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a portfolio at
periodic intervals, thereby purchasing fewer shares when prices are high
and more shares when prices are low. While such a strategy does not assure
a profit or guard against loss in a declining market, the investor's
average cost per share can be lower than if fixed numbers of shares had
been purchased at the same intervals. In evaluating such a plan, investors
should consider their ability to continue purchasing shares through periods
of low price levels.
The Portfolio may be available for purchase through retirement plans or
other programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
Performance may be compared to the following unmanaged indices of bond
prices and yields.
LEHMAN BROTHERS GOVERNMENT BOND INDEX is an index comprised of all public
obligations of the U.S. Treasury, of U.S. Government agencies,
quasi-federal corporations, and corporate debt guaranteed by the U.S.
Government. The index excludes flower bonds, foreign targeted issues and
mortgage-backed securities.
LEHMAN BROTHERS CORPORATE BOND INDEX is an index comprised of all public,
fixed-rate, non-convertible investment grade domestic corporate debt.
Issues included in this index are rated at least Baa by Moody's Investors
Service (Moody's) or BBB by S&P, or in the case of bonds unrated by
Moody's or S&P, BBB by Fitch Investor Service. Collateralized mortgage
obligations are not included in the Corporate Bond Index.
SALOMON BROTHERS HIGH YIELD COMPOSITE INDEX is an index of high yielding
utility and corporate bonds with a minimum maturity of seven years and with
total debt outstanding of at least $50 million. Issues included in the
index are rated Baa or lower by Moody's or BBB or lower by S&P.
SALOMON BROTHERS HIGH GRADE CORPORATE BOND INDEX is an index of high
quality corporate bonds with a minimum maturity of at least ten years and
with total debt outstanding of at least $50 million. Issues included in
the index are rated Aa or better by Moody's or AA or better by S&P.
HISTORICAL PORTFOLIO RESULTS. The following chart shows the income and
capital elements of the Portfolio' s year-by-year total returns from
March 8, 1990 (commencement of operations) through February 28, 1994. The
chart compares the Portfolio' s return to the record of the
Aggregate Bond Index Portfolio over the same period. The
comparisons to the Aggregate Bond Index Portfolio shows the Portfolio's
total re turn compared to the record of a broad average of debt
securities. The Aggregate Bond Index is a total return index
measuring both the capital price changes and the income underlying the
universe of securities weighted by market value outstanding, and,
unlike the Portfolio 's returns, its returns do not include
the effect of paying brokerage commissions and other costs of investing.
During the period from March 8, 1990 (commencement of operations) to
February 28, 1994, a hypothetical $10 0 ,000 investment in Fidelity
U.S. Bond Index Portfolio would have grown to $151,547 assuming all
distributions were reinvested. This was a period of fluctuating bond
prices and should not necessarily be considered a representation of the
income or capital gain or loss which may be realized by an investment in
the Portfolio today.
FIDELITY U.S. BOND INDEX PORTFOLIO INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested Aggregate
Period $100,000 Dividend Capital Gain Total Bond
Ended Investment Distributions Distributions Value Index**
2/18/91* $103,100 $8,955 $0 $112,055 $112,214
2/29/92 $107.100 $19,179 $922 $127,202 $126,575
2/28/93 $110,700 $29,949 $3,164 $143,813 $142,003
2 /28/94 $ 108,300 $ 38,912 $ 4,434 $ 151,547 $ 149,662
</TABLE>
* From commencement of operations 3/8/90.
** From month-end closest to initial investment date.
EXPLANATORY NOTES: With an initial investment of $100,000 made on March 8,
1990, the net amount invested in Portfolio shares was $100,000. The cost
of the initial investment ($100,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(that is, their cash value at the time they were reinvested), amounted to
$142,592. If distributions had not been reinvested, the amount of
distributions earned from the Portfolio over time would have been smaller,
and the cash payments for the period would have come to $32,364 for income
dividends and $3,500 for capital gain distributions. Tax consequences of
different investment have not been factored into the above figures.
TRADITION OF PERFORMANCE. Fidelity's tradition of performance is achieved
through:
Money Management: a proud tradition of money management motivated by the
expectation of excellence backed by solid analysis and worldwide resources.
Fidelity employs a bottom s -up approach to security selection based
upon in-depth analysis of the fundamentals of that investment opportunity.
Innovation: constant attention to the changing needs of today's investors
and vigilance to the opportunities that arise from changing global markets.
Research is central to Fidelity's investment decision-making process.
Fidelity's greatest resource--over 200 skilled investment professionals--is
supported with the most sophisticated technology available.
Fidelity provides:
Global research resources: an opportunity to diversity portfolios and
share in the growth of markets outside the United States.
In-house, proprietary bond-rating system, constantly updated, which
provides extremely sensitive credit analysis.
Comprehensive chart room with over 1 , 500 exhibits to provide
sophisticated charting of worldwide economic, financial, and technical
indicators, as well as to provide tracking of over 800 individual stocks
for portfolio managers.
State-of-the-art trading desk, with access to over 200 brokerage houses,
providing real-time information to achieve the best executions and optimize
the value of each transaction.
Use of extensive on-line computer-based research services.
Service: Timely, accurate and complete reporting. Prompt and expert
attention when an investor or an investment professional needs it.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the Portfolio's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the Portfolio is required to
give shareholders at least 60 days' notice prior to terminating or
modifying their exchange privileges. Under the Rule, the 60-day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee or deferred sales charge ordinarily payable at the time of
exchange, or (ii) the Portfolio temporarily suspends the redemption of the
shares to be exchanged as permitted under the 1940 Act or the rules and
regulations thereunder, or the fund to be acquired suspends the sale of its
shares because it is unable to invest amounts effectively in accordance
with its investment objective and policies.
The Portfolio has notified shareholders that it reserves the right at any
time, without prior notice, to refuse exchange purchases by any person or
group if, in FMR's judgment, the Portfolio would be unable to invest
effectively in accordance with its investment objective and policies, or
would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, the Transfer Agent may reinvest your
distributions at the then-current NAV. All subsequent distributions will
then be reinvested until you provide the Transfer Agent with alternate
instructions.
DIVIDENDS. Because the Portfolio's income is primarily derived from
interest, dividends from the Portfolio will not normally qualify for the
dividends received deduction available to corporate shareholders. A
portion of the Portfolio's dividends derived from certain U.S. government
obligations may be exempt from state and local taxation.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the
Portfolio on the sale of securities and distributed to shareholders are
federally taxable as long-term capital gains, regardless of the length of
time that the shareholders have held their shares. If a shareholder
receives a long-term capital gain distribution on shares of the Portfolio
and such shares are held for less than six months and are sold at a loss,
the portion of the loss equal to the amount of the long-term capital gain
distribution will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by the Portfolio are taxable to
shareholders as dividends, not as capital gains. Distributions from the
short-term capital gains do not qualify for the dividends received
deduction.
TAX STATUS OF THE PORTFOLIO. The Portfolio has qualified and intends to
continue to qualify as a "regulated investment company" for tax purposes,
so that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify as a regulated investment
company and avoid being subject to federal income and excise taxes, the
Portfolio intends to distribute substantially all of its net taxable income
and realized capital gains within each calendar year as well as on a fiscal
year basis. The Portfolio also intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held for less than three months
must constitute less than 30% of the Portfolio's gross income for each
fiscal year. Gains from some forward currency contracts, futures
contracts, and options are included in this 30% of the Portfolio gross
income for which may limit the Portfolio's investments in such
instruments.
The Portfolio is treated as a separate entity from the other portfolios
of Fidelity Institutional Trust (the Trust) for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting the Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, you may be subject to
state and local taxes on distributions received from the Portfolio. You
should consult your tax advisor to determine whether the Portfolio is
suitable to your particular tax situation.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the Portfolio
does not currently anticipate that securities of foreign issuers will
constitute more than 50% of its total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions: Service which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for certain
institutional customers, and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR also are engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far
East), both wholly owned subsidiaries of FMR formed in 1986, supply
investment research, and may supply portfolio management services, to FMR
in connection with certain funds advised by FMR. Analysts employed by FMR,
FMR U.K. and FMR Far East research and visit thousands of domestic and
foreign companies each year. FMR Texas Inc., a wholly owned subsidiary of
FMR formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Portfolio are listed
below. Except as indicated, each individual has held the office shown or
other offices in the same company for the last five years. All persons
named as Trustees and officers serve in similar capacities for other funds
advised by FMR. Unless otherwise noted, the business address of each
Trustee and officer is 82 Devonshire Street, Boston, MA 02109, which is
also the address of FMR. The Trustees who are "interested persons" (as
defined in the 1940 Act ) by virtue of their affiliation with the
Portfolio or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994,
he was President of Greenhill Petroleum Corporation (petroleum exploration
and production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous
waste, 1993) and CH2M Hill Companies (engineering). In addition, he served
on the Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as
a Trustee of First Union Real Estate Investments; Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
In addition, he serves as a Trustee of Corporate Property Investors, the
EPS Foundation at Trinity College, the Naples Philharmonic Center for the
Arts, and Rensellar Polytechnical Institute, and he is a member of the
Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus
Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of
Distributors.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
retirement program under which they receive payments during their lifetime
from the fund based on their basic trustee fees and length of service.
Currently, Messrs. Robert L. Johnson, William R. Spaulding, Bertram H.
Witham, and David L. Yunich participate in the program.
As of March 31, 1994, the Trustees and officers of the Trust owned in the
aggregate less than 1% of the Portfolio's outstanding shares.
MANAGEMENT CONTRACT
The Portfolio employs FMR to furnish investment advisory and other
services. Under its Management Contract with the Portfolio, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the Portfolio in accordance with its
investment objective, policies, and limitations. FMR also p rovides
the Portfolio with all necessary office facilities and personnel for
servicing the Portfolio's investments and c ompensates all officers
of the Trust or FMR performing services relating to research, statistical
and investment acti v ities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provides the management and administrative services necessary
for the operation of the Portfolio. These services include providing
facilities for maintaining the Portfolio's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters, and other persons dealing with the Portfolio; preparing all
general shareholder communications and conducting shareholder relations;
maintaining the Portfolio's records and the registration of the Portfolio's
shares under federal and state law, developing management and shareholder
services for the Portfolio; and furnishing reports, evaluations and
analyses on a variety of subjects to the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC (subject to the reimbursement provision described below), the
Portfolio pays all its expenses, without limitation, that are not assumed
by those parties. The Portfolio pays for the preparing, typesetting,
printing, and mailing of proxy material to existing shareholders, and for
legal expenses and the fees of the custodian, auditor and non-interested
Trustees. Although the Portfolio's management contract provides that the
Portfolio will pay for the typesetting, printing, and mailing of
prospectuses, statements of additional information, notices and reports to
existing shareholders, the Portfolio has entered into a revised transfer
agency agreement with FIIOC, pursuant to which, FIIOC bears the cost of
providing these services to existing shareholders. Other expenses paid by
the Portfolio include interest, taxes, brokerage commissions, the
Portfolio's proportionate share of insurance premiums and association dues
and the cost of registering shares under federal and state securities laws.
The Portfolio is also liable for such nonrecurring expenses as may arise,
including costs of litigation to which the Portfolio is a party and any
obligation it may have to indemnify officers and Trustees of the Trust with
respect to such litigation.
FMR is the p ortfolio's manager pursuant to a management contract
dated January 13, 1988 and approved by the Portfolio's shareholders on
October 3, 1990. The Portfolio pays a monthly management fee to FMR at the
annual rate of .32% of the average net assets of the Portfolio as
determined as of the close of business on each day throughout the month.
The management fee for the fiscal year ended February 28, 1994, the period
November 1, 1992 through February 28, 1993, and the fiscal year ended
October 31, 1992 (before reimbursement of expenses) amounted to $610,385,
$110,207, and $177,713, respectively. During these periods, FMR
voluntarily agreed to reimburse the Portfolio to the extent that the
aggregate operating expenses of the Portfolio were in excess of .32% of its
average net assets.
To comply with the California Code of Regulations, FMR will reimburse the
Portfolio if and to the extent that the Portfolio's aggregate annual
operating expenses exceed specified percentage of average net assets.
The applicable percentages are 2 1/2% of the first $30 million, 2% of the
next $70 million, and 1 1/2% of average net assets in excess of $100
million. When calculating the Portfolio's expenses for purposes of this
regulation, the Portfolio may exclude interest, taxes, brokerage
commissions, and extraordinary expenses, as well as a portion of its
distribution plan expenses.
FMR may from time to time, agree to voluntarily waive its fee or to
reimburse the Portfolio for expenses above a specified percentage of
average net assets. FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior to
the end of the fiscal year. Fee waivers or expense limitations by FMR will
increase the Portfolio's yield.
DISTRIBUTION AND SERVICE PLAN
The Portfolio has adopted a Distribution and Service Plan (the Plan) under
Rule 12b-1 under the 1940 Act (the Rule). The Plan was approved by the
Trustees on January 13, 1988 and was approved by Portfolio shareholders on
October 3, 1990. The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is primarily
intended to result in the sale of shares of the Portfolio except
pursuant to a plan adopted by the Portfolio under the Rule. The
Trust's Board of Trustees has adopted the Plan to allow the Portfolio and
FMR to incur certain expenses that might be considered to constitute
indirect payment by the Portfolio of distribution expenses. Under the
Plan, if the payment by the Portfolio to FMR of management fees should be
deemed to be indirect financing by the Portfolio of the distribution of its
shares, such payment is authorized by the Plan.
The Plan specifically recognizes that FMR, either directly or through
Distributors, may use its management fee revenue, past profits or other
resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Portfolio.
In addition, the Plan provides that FMR may use its resources, including
its management fee revenues, to make payments to third parties that provide
assistance in selling shares of the Portfolio or to third parties,
including banks, that render shareholder support services. The Trustees
have not yet authorized such payments.
As required by the Rule, the Trustees carefully considered pertinent
factors relating to the implementation of the Plan prior to its approval,
and have determined that there is a reasonable likelihood that the Plan
will benefit the Portfolio and its shareholders. In particular, the
Trustees noted that the Plan does not authorize payments by the Portfolio
other than those made to FMR under the management contract with the
Portfolio. To the extent that the Plan gives FMR and Distributors greater
flexibility in connection with the distribution of shares of the Portfolio,
additional sales of the Portfolio's shares may result. Additionally,
certain shareholder support services may be provided more effectively under
the Plan by local entities with whom shareholders have other relationships.
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 clearly defined, in Distributors' opinion
it should not prohibit banks from being paid for shareholder support
services, servicing and record keeping functions. Distributors intends to
engage banks only to perform such functions. However, changes in federal
or state statutes and regulations pertaining to the permissible activities
of banks and their affiliates or subsidiaries, as well as further judicial
or administrative decisions or interpretations, could prevent a bank from
continuing to perform all or a part of the contemplated services. If a
bank were prohibited from so acting, the Trustees would consider what
actions, if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the operation of
the Portfolio might occur, including possible termination of any automatic
investment or redemption or other services then provided by the bank. It
is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. The Portfolio may
execute portfolio transactions with and purchase securities issued by
depository institutions that receive payments under the Plan. No
preference will be shown in the selection of investments for the
instruments of such depository institutions. 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 law.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FIIOC, 82 Devonshire Street, Boston, Massachusetts 02109, is transfer,
dividend disbursing and shareholder servicing agent for the Portfolio. In
addition to providing transfer agent and shareholder servicing functions,
FIIOC will pay all transfer agent out-of-pocket expenses and for
typesetting, printing and mailing prospectuses, statements of additional
information, reports, notices and statements of all related accounts.
Effective January 1, 1993, FIIOC is paid a per account fee of $95 and a
monetary transaction fee of $20 or $17.50 depending on the nature of the
services provided. From June 1, 1990 until December 31, 1992, FIIOC was
paid a per a ccount fee and a monetary transaction fee of $65 and
$14, respectively, or $60 and $12, respectively, depending on t he
nature of services provided. Fees for certain institutional retirement
plan accounts are based on the net asset va lue of all such accounts
in the Portfolio.
Fees and out-of-pocket expenses paid to FIIOC during the fiscal year ended
February 28, 1994, the period November 1, 1992 through February 28, 1993,
and the fiscal year ended October 31, 1992 amounted to $429,436, $95,678,
and $133,533, respectively.
The Trust has a contract with Service under which Service performs the
calculations necessary to determine the Portfolio's NAV an d
dividends and maintain the Portfolio's accounting records. Prior to July
1, 1991, the annual fee for these pricing and bookkeeping services was
based on two schedules, one pertaining to the Portfolio's average net
assets, and one pertaining to the type and number of transactions the
Portfolio made. The fee rates in effect as of July 1, 1991 are based on
the Portfolio's average net assets, specifically, .0 6 % for the first
$500 million of average net assets and .0 3 % for average net assets
in excess of $500 million. The fee is limited to a minimum of $45,000 and
a maximum of $750,000 per year. For the fiscal year ended February 28,
1994, the period November 1, through February 28, 1993, and the fiscal year
ended October 31, 1992 the fees paid to Service for pricing and bookkeeping
services (including related out-of-pocket expenses) were $79,841, $15,660,
and $45,832, respectively.
Service also receives fees for administering the Portfolio's securities
lending program. Securities lending fees are based on the number and
duration of individual securities loans. For the fiscal year ended
February 28, 1994, the period November 1, 1992 through February 28, 1993,
and the fiscal year ended October 31, 1992 no fees were paid to Service for
securities lending services.
DISTRIBUTORS
The Portfolio has a General Distribution Agreement with Fidelity
Distributors Corporation, a Massachusetts corporation organized July 18,
1960. Distributors, located at 82 Devonshire Street, Boston, Massachusetts
02109, is a broker-dealer registered under the Securities Exchange Act of
1934 and is a member of the National Association of Securities Dealers,
Inc. The General Distribution Agreement calls for Distributors to use all
reasonable efforts, consistent with its other business, to secure
purchasers for shares of the Portfolio , which are offered
continuously at N AV. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by
Distribu t ors. Distributors also acts as general distributor for
other publicly offered Fidelity funds. The expenses of these
o perations are borne by FMR or Distributors.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity U.S. Bond Index Portfolio is a portfolio of
Fidelity Institutional Trust (the Trust), an open-end management investment
company organized as a Massachusetts business trust on July 21, 1987.
Currently, there are two portfolios of the Trust: Fidelity U.S. Bond Index
Portfolio and Fidelity U.S. Equity Index Portfolio. The Declaration of
Trust permits the Trustees to create additional portfolios.
In the event that FMR ceases to be the investment adviser to the Portfolio,
the right of the Trust or Portfolio to use the identifying name "Fidelity"
may be withdrawn.
The assets of the Trust received for the issue or sale of shares of each
portfolio and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such
portfolio, and constitute the underlying assets of such portfolio .
The underlying assets of each portfolio are segregated on the books of
account, and are to be charged with the liabilities with respect to such
portfolio and with a share of the general expenses of the Trust. Expenses
with respect to the Trust are to be allocated in proportion to the asset
value of the respective portfolio, except where allocations of direct
expense can otherwise be fairly made. The officers of the Trust, subject to
the general supervision of the Board of Trustees, have the power to
determine which expenses are allocable to a given portfolio, or which are
general or allocable to the portfolio. In the event of the dissolution or
liquidation of the Trust, shareholders of each portfolio are entitled to
receive as a class the underlying assets of such portfolio available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a Trust may, under certain circumstances, be held
personally liable for the obligations of the Trust. The Declaration of
Trust provides that the Trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
Trust or the Trustees shall include a provision limiting the obligations
created thereby to the Trust and its assets. The Declaration of Trust
provides for indemnification out of each portfolio's property of any
shareholders held personally liable for the obligations of the portfolio.
The Declaration of Trust also provides that each portfolio shall, upon
request, assume the defense of any claim made against any shareholder for
any act or obligation of the portfolio and satisfy any judgment thereon.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the portfolio
itself would be unable to meet its obligations. FMR believes that, in view
of the above, the risk of personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each portfolio's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and non assessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the Trust or a portfolio
may, as set forth in the Declaration of Trust, call meetings of the Trust
or a portfolio for any purpose related to the Trust or portfolio, as
the case may be, including, in the case of a meeting of the entire Trust,
the purpose of voting on removal of one or more Trustees. The Trust or any
portfolio may be terminated upon the sale of its assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the outstanding shares of the Trust or the portfolio. If not
so terminated, the Trust and the portfolio will continue indefinitely.
As of March 31, 1994, there were no shareholders owning o f record or
beneficially 5% or more of the outstanding shares of the Portfolio .
CUSTODIAN. The Bank of New York, 48 Wall Street, New York, New York 10286,
is custodian of the assets of the Portfolio. The custodian is responsible
for the safekeeping of the Portfolio's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the Portfolio or in deciding which
securities are purchased or sold by the Portfolio. The Portfolio may,
however, invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the Trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and
personal and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other Portfolio relationships.
AUDITOR. Price Waterhouse, 160 Federal Street, Boston, Massachusetts,
serves as the Trust's independent accountant. The auditor examines
financial statements for the Portfolio and provides other audit, tax, and
related services.
FINANCIAL STATEMENTS
The Portfolio's Annual Report for the fiscal year ended February 28, 1994
is combined with the Prospectus.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days remaining to its maturity, adding
these calculations, and then dividing the total by the value of the
Portfolio assets. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to this
rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call, refunding,
or redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities and some asset-backed
securities, such as collateralized mortgage obligations, are determined on
a weighted average life basis, which is the average time for principal to
be repaid. For a mortgage security, this average time is calculated by
assuming a constant prepayment rate for the life of the mortgage. The
weighted average life of these securities is likely to be substantially
shorter than their stated final maturity.
The descriptions that follow are examples of eligible ratings for the
Portfolio. The Portfolio may, however, consider the ratings for other
types of investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
COMMERCIAL PAPER. Short-term promissory notes of large corporations issued
to finance their current operations. The ratings A-1 and Prime-1 are the
highest commercial paper ratings assigned by Standard & Poor's Ratings
Group and Moody's Investors Service, Inc. Commercial paper which is not
rated is not necessarily of lower quality than that which is rated, but may
be less marketable and therefore provide a higher yield.
BANKERS' ACCEPTANCES: Negotiable obligations of a bank to pay a draft
which has been drawn on it by a customer. These obligations are backed by
large banks and usually backed by goods in international trade.
CERTIFICATES OF DEPOSIT: Negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified
rates of interest over given periods.
TIME DEPOSITS: Non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
D ESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND
RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S CORPORATE BOND
RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
FIDELITY INSTITUTIONAL TRUST
FIDELITY U.S. EQUITY INDEX PORTFOLIO
CROSS REFERENCE SHEET
FORM N-1A ITEM NUMBER PROSPECTUS CAPTION
1 a,b Cover Page
2 a Summary of Portfolio Expenses
b,c *
3 a Financial Highlights
b *
c Performance
4 a(i) Fidelity U.S. Equity Index Portfolio and the Fidelity Organization
a(ii),b,c Investment Objective; Investment Policies, Risks, and
Limitations; Limiting Investment Risks
5 a,b(i) Fidelity U.S. Equity Index Portfolio and the Fidelity
Organization
b(ii,iii),c Management Contract, Distribution Plan, and Service
Agreements
d Fidelity U.S. Equity Index Portfolio and the Fidelity Organization;
Management Contract, Distribution Plan, and Service Agreements
e Management Contract, Distribution Plan, and Service Agreements
f Portfolio Transactions
5A Portfolio Manager Interview; Performance Update
6 a(i) Fidelity U.S. Equity Index Portfolio and the Fidelity Organization
a(ii,iii) *
b Fidelity U.S. Equity Index Portfolio and the Fidelity Organization
c,d *
e How to Invest, How to Exchange, How to Redeem
f *
g Distributions and Taxes
7 a Fidelity U.S. Equity Index Portfolio and the Fidelity Organization
b(i,ii) How to Invest, How to Exchange, How to Redeem
b(iii) *
b(iv) *
b(v) *
c,d How to Invest; How to Exchange; How to Redeem
e Management Contract, Distribution Plan and Service Agreements
8 a How to Invest; How to Exchange; How to Redeem
b *
c *
d How to Invest; How to Exchange; How to Redeem
9 *
FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION CAPTION
10 a,b Cover Page
11 Cover Page
12 *
13 a,b,c Investment Policies and Limitations
d Portfolio Transactions
14 a,b Trustees and Officers
c *
15 a Trustees and Officers
b Description of the Trust
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Distribution and Service Plan
d Contracts with Companies Affiliated with FMR
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Distribution and Service Plan
17 a,b,c Portfolio Transactions
d *
e *
18 a Description of the Trust
b *
19 a Additional Purchase and Redemption Information
b Valuation of Portfolio Securities
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with Companies Affiliated with FMR
a(iii),b,c *
22 a *
b Portfolio Performance
23 Financial Statements for the Portfolio for the fiscal year ended
February 28, 1994 are filed herein.
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 (the Portfolio) offers investors a
convenient and economical way to invest in an open-end, diversified
management investment company. 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 500
Composite Stock Price Index ("S&P 500" or "Index"), while keeping
transaction costs and other expenses low.
This Prospectus is designed to provide you with information that an
investor should know 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 17.
A Statement of Additional Information (dated April 29 , 1994) for the
Portfolio has been filed with the Securities and Exchange Commission (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, Massachusetts 02109.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
For information or assistance in opening a new account:
INDIVIDUAL ACCOUNTS (Participant)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact your plan
sponsor directly.
RETIREMENT PLAN LEVEL ACCOUNTS (Trustees, Plan Sponsors)
Corporate Clients 800-962-1375
"Not for Profit" Clients 800-343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 800-843-3001
TABLE OF CONTENTS
Summary of Portfolio Expenses
Financial Highlights
Investment Objective
Investment Policie s, Risks, and Limitations
Suitability
How to Invest
How to Exchange
How to Redeem
Distributions and Taxes
Portfolio Transactions
Performance
Management Contract, Distribution Plan and Service Agreements
Appendix
Financial Statements. 17
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
6.SUMMARY OF PORTFOLIO EXPENSES
The purpose of the table below is to assist you in understanding the
various costs and expenses that an investor in the Portfolio would bear
directly or indirectly. The expense summary format below was developed for
use by all mutual funds to help you make your investment decisions. Of
course, you should consider this expense information along with other
important information, including the Portfolio's investment
objective and its past performance.
A. ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees .00%*
Other Expenses .28%*
TOTAL PORTFOLIO OPERATING EXPENSES .28%*
* NET OF REIMBURSEMENT.
B. EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming (1) a
5% annual return and (2) full redemption at the end of each time period:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$3 $9 $16 $36
EXPLANATION OF TABLE:
A. ANNUAL PORTFOLIO OPERATING EXPENSES are based on the Portfolio's
historical expenses after reimbursement. Management fees are paid by the
Portfolio to Fidelity Management & Research Company (FMR) for managing
its investments and business affairs. The Portfolio incurs other expenses
for maintaining shareholder records, furnishing shareholder statements and
reports, and providing other services. Expenses eligible for
reimbursement by FMR do not include interest, taxes, brokerage commissions
(if any) or extraordinary expenses. Subject to revision upon 90 days'
notice to shareholders, FMR has voluntarily agreed to temporarily
limit the Portfolio's total operating expenses to .28% of
its average net assets. If this agreement were not in effect,
management fees, other expenses and total portfolio operating expenses
would have been .28%, .33% and .61%, respectively. Management fees and
other expenses are reflected in the Portfolio's share price, and are not
charged directly to individual accounts. 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.
7. FINANCIAL HIGHLIGHTS
The table below gives you information about the Portfolio's financial
history and uses the Portfolio's fiscal year (which ends February 28).
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C>
Year Ended Four Years Ended October 31, February 17,
February 28, Months 1988
Ended (commencemen
February 28, t of operations)
to October 31,
1994 1993 1992 1991 1990 1989 1988
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 16.73 $ 15.77 $ 14.97 $ 11.61 $ 13.23 $ 10.81 $ 10.00
Income from Investment Operations
Net investment income
.44 .15 .42 .42 .44 .38 .23
Net realized and unrealized gain (loss)
.88 .94 .97 3.38 (1.44) 2.41 .74
on investments
Total from investment operations
1.32 1.09 1.39 3.80 (1.00) 2.79 .97
Less Distributions
From net investment income
(.44) (.13) (.43) (.44) (.48) (.35) (.16)
From net realized gain
(.25) - (.16) - (.14) (.02) -
Total distributions
(.69) (.13) (.59) (.44) (.62) (.37) (.16)
Net asset value, end of period
$ 17.36 $ 16.73 $ 15.77 $ 14.97 $ 11.61 $ 13.23 $ 10.81
TOTAL RETURN (dagger) (double dagger)
8.06% 6.93% 9.59% 33.13% (7.98)% 26.30% 9.77%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 1,892,254 $ 1,472,102 $ 1,454,684 $ 960,442 $ 435,641 $ 303,859 $ 34,576
Ratio of expenses to average net assets **
.28% .28%* .28% .28% .28% .28% .28%*
Ratio of expenses to average net assets before
.61% .66%* .64% .67% .66% .97% 1.83%*#
expense reductions **
Ratio of net investment income to average
2.59% 2.95%* 2.78% 3.14% 3.55% 3.79% 4.56%*
net assets
Portfolio turnover rate
4% 28%* 6% 4% 2% 10% 3%*
</TABLE>
* ANNUALIZED
** SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS ON PAGE 33.
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(double dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN
EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. SEE NOTE 7 OF NOTES TO
FINANCIAL STATEMENTS ON PAGE 33.
# 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 Financial Highlights have been audited by Price Waterhouse,
independent accountants. Their unqualified report is included on page 34.
The Annual Report begins on page 17.
8.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 while keeping transaction costs and other expenses low.
Except for the Portfolio's investment 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.
9. INVESTMENT POLICIES, RISKS, AND LIMITATIONS
The S&P 500 is a widely recognized unmanaged index of common stock
prices and represents over 75% 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.
The Portfolio may not always achieve its objective, but will follow the
investment style described herein.
PORTFOLIO SECURITIES. Under normal conditions, 90% of the
Portfolio's assets will be invested in securities of companies which
compose the S&P 500. 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 Ratings Group (S&P) 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.
S&P 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 S&P
as to its attractiveness as an investment, nor is S&P a sponsor or in
any other way affiliated with the Portfolio. At some time in the future FMR
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 futures
contracts and options, illiquid investments, indexed securities, swap
agreements and warrants.
The Portfolio may also invest a portion of its assets in instruments
whose return depends on stock market prices. These may include debt
securities whose prices or interest rates are indexed to the return of the
S&P 500, or swap agreements linked to the S&P 500, and options and
futures contracts. The Portfolio would invest in these types of instruments
in order to seek to match the total return of the S&P 500 in accordance
with its investment objective. However, instruments linked to stock market
returns may not track the return of the S&P 500 in all cases, and may
involve additional credit risks.
10. 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 investors whose objective is to seek a return corresponding to
the return of the S&P 500 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 .
TRACKING THE INDEX. The Portfolio attempts to duplicate the
investment results of the S&P 500 through an investment technique known
as "full replication." The number of shares owned by the Portfolio of each
stock is proportional to the number of shares in the Index. Because the
representation of stocks in the Index is based on each stock's number of
shares outstanding, the weight of each stock in both the Index and the
Portfolio will be proportional to its total market capitalization, which is
its shares outstanding times its market price per share.
FMR believes that with total assets of $20 million or more, the
Portfolio duplicates the investment results of the S&P 500 with a
relatively small margin of tracking error. At this asset level, the
Portfolio seeks 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. FMR 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. In the unlikely event that this correlation is not achieved, the
Board of Trustees will consider alternative arrangements.
The Portfolio may compensate for the omission from its investments 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.
FMR 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. FMR reserves the
right, without obligation, to remove an investment from the Portfolio
following objective criteria if, in the judgment of FMR, 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.
LIMITING INVESTMENT RISKS. FMR 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 25% of total assets would be invested in securities of any single
issuer; or (b) with respect to 75% of total assets, more than 5% of total
assets would be invested in the securities of a single issuer; or (c) it
would hold more than 10% of the outstanding voting securities of such
issuer.
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 may (a) borrow money from banks or from other funds
advised by FMR 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 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 FMR. FMR will
limit all loans to 33 1/3% of total assets.
Limitations 1 and 2 do not apply to U.S. government securities. The
Portfolio's investment objective, Limitations 1 and 2 and the percentage
limitations on borrowing and lending in Limitations 3 and 4 are fundamental
policies and can only be changed by vote of a majority of the Portfolio's
outstanding shares. The limitations and policies discussed in this
Prospectus 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.
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.
11.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 mpany (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 the NAV is
calculated each day the NYSE is open for trading. The NYSE has designated
the following holiday closings for 1994: Presidents' Day, Good Friday,
Memorial Day (observed) , Independence Day (observed) , Labor
Day, Thanksgiving Day, and Christmas Day (observed). Although FMR expects
the same holiday schedule, with the addition of New Year's Day, to be
observed in the future, the NYSE may modify its holiday schedule at any
time. On any day that the NYSE closes early, or as permitted by the SEC,
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 on days when investors do not have access
to the Portfolio to purchase or redeem shares. Certain Fidelity
funds may follow different holiday schedules.
HOW TO INVEST
INITIAL (minimum) INVESTMENT *
$100,000
METHOD
BY WIRE
ADDITIONAL (minimum) INVESTMENT
- --
BY MAIL
$100,000
- --
Fidelity U.S. Equity Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
Please make your check payable to
"Fidelity U.S. Equity Index
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 Fidelity
Investments Institutional
Operations Company (FIIOC)
that your Fidelity Money Line is
active. The maximum transaction
amount is $50,000.)
INDIVIDUAL ACCOUNTS (Participant)
If you are a participant investing through a retirement plan sponsor or
other institution, please refer to
your plan materials or contact your plan sponsor directly for all services.
INITIAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Client Services) "Not for Profit" Retirement Plans 800-343-0860
Financial Institutions 800-843-3001
ADDITIONAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Trading) "Not for Profit" Retirement Plans 800-343-0860
Financial Institutions 800-343-6310
* Minimum may be waived for tax-saving retirement plans.
MINIMUM INVESTMENT AND ACCOUNT BALANCE. The minimum initial investment to
establish a new account in the Portfolio is $100,000. If you do not
already have a Fidelity mutual fund account, a completed, signed
application must precede or accompany your initial investment.
Subsequent investments may be in any amount. 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. You will be given 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. The
minimum investment requirement 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 telephone number in the chart on page 7
to advise Client Services of the investment and to obtain an account
number, wiring instructions, and instructions regarding the establishment
of an account.
To make additional investments by wire, you must call Trading before 4:00
p.m. Eastern time at the appropriate telephone number in the chart above.
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 canceled 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
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
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 canceled and you could be held liable for any losses or fees incurred.
When you purchase by check or via Fidelity Money Line , the Portfolio
may hold payment on redemptions until it is reasonably satisfied that the
investment has been collected (which can take up to seven business
days). To avoid this collection period you can invest by wire (see "To
Invest by Wire," above).
12.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 Trading 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 is available to
certain retirement investors who invest directly through Fidelity. 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 FIIOC that your Fidelity Money Line is
active. When you purchase via Fidelity Money Line, the Portfolio may
hold payment on redemptions until it is reasonably satisfied that the
investment has been collected (which can take up to seven business
days). To avoid this collection period you can invest by wire (see "To
Invest by Wire," above). To make an additional investment via Fidelity
Money Line, or to inquire about the service, please call Client Services
before 4:00 p.m. Eastern time at the appropriate telephone number in the
chart on page .
You may initiate many transactions by telephone. Note that
Fidelity will not be responsible for any losses resulting from
unauthorized telephone transactions if it follows reasonable procedures
designed to verify the identity of the caller. Fidelity will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of your confirmation statements
immediately after you receive them. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
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 investment objective,
policies and limitations will be eligible for exchange. However,
Distributors reserves the right to refuse a tender for any reason. A gain
or loss for federal income tax purposes may be realized by the investor
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.
CHOOSING A DISTRIBUTION OPTION. You may choose from three distribution
options when filling out an application :
A. The SHARE OPTION reinvests your income dividends and capital gain
distributions.
B. The INCOME-EARNED OPTION pays your income dividends in cash and
reinvests your capital gain distributions.
C. With the CASH OPTION you receive income dividends and capital gain
distributions in cash.
On the day the Portfolio goes ex-dividend, the amount of the distribution
is deducted from its share price. Reinvestment of distributions will be
made at that day's NAV. Cash distributions checks will be mailed within
seven days.
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 certain tax-sheltered retirement plans, you may
move any distributions you receive from the plan to a Fidelity Rollover IRA
without incurring a sales charge. You may do so by a direct transfer of
assets or by making the investment within 60 days of the date of the
distribution. Consult your plan administrator or a tax adviser for more
details. You also can elect to take your distributions in kind and
establish an IRA rollover account in the Portfolio. For such IRA rollovers
to the Portfolio, there is no minimum investment required when opening an
account. You may invest in most Fidelity retail funds without paying a
sales charge. See your plan materials for more information.
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.
13.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 Fidelity funds registered for
sale in your state. You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
Please read the prospectus of the fund into which you want to exchange
for relevant information, including any applicable sales charges. Each
exchange may produce a capital loss or taxable capital gain. (Please
consult "Distributions and Taxes," page .)
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 nother Fidelity 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 .
Written requests for exchange should be mailed to:
Fidelity U.S. Equity Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
To exchange by telephone call Trading before 4:00 p.m. Eastern time at the
appropriate telephone number in the chart on 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. Check
each fund's prospectus for details. The exchange limit may be modified for
accounts in certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
The Portfolio reserves the right at any time without prior notice to refuse
exchange purchases by any person or group if, in FMR's judgment, 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.
14.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 ).
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 business
days to pay you. Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day (but
may take up to seven business days) after your telephone call. Remember
that the Portfolio 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 business days).
TO REDEEM BY MAIL. Send a letter of instruction with your signature(s)
guarantee to:
Fidelity U.S. Equity Index Portfolio
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
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.
<TABLE>
<CAPTION>
<S> <C>
Type of Registration Requirements
Individual, Joint Tenants, Sole Proprietorship, Custodial (Uniform Gifts or Letter of instruction
Transfers to Minors Act), General Partners signed by all person(s)
required to sign for the
account exactly as it is
registered, accompanied
by signature
guarantee(s).
Corporations, Associations Letter of instruction and
a corporate 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.)
</TABLE>
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 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. Signature guarantees will be accepted from banks, brokers, dealers,
municipal securities dealers, municipal securities brokers, government
securities dealers, government securities brokers, credit unions (if
authorized under state law), national securities exchanges, registered
securities associations, clearing agencies and savings associations.
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. Provided that your account registration has not changed within
the last 60 days, you may redeem shares of the Portfolio worth $100,000 or
less by telephone. Your redemption proceeds will be sent to the record
address.
To redeem by telephone, call Trading before 4:00 p.m. Eastern time at the
appropriate telephone number below:
INDIVIDUAL ACCOUNTS (Participant)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact your plan
sponsor directly.
RETIREMENT PLANS
Corporate 800-962-1375
"Not for Profit" 800-343-0860
FINANCIAL INSTITUTIONS 800-343-6310
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 $2,500
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, including certain purchases by exchange. 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 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.
15.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 delayed. 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. The Portfolio's 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 Internal Revenue Service (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 should also 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 price 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 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the
Portfolio to withhold 31% of your taxable distributions and redemptions.
16.PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out the Portfolio's transactions.
FMR chooses broker-dealers by judging professional ability and quality of
service. Since FMR places a large number of transactions, including those
of Fidelity's other funds, the Portfolio pays lower commissions than those
paid by most 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, and on an agency basis, to Fidelity Brokerage
Services, Inc. (FBSI) and to Fidelity Brokerage Services, Ltd., affiliates
of FMR. FMR will make such allocations if commissions are comparable to
those charged by non-affiliated, qualified broker-dealers for similar
services.
FMR may also allocate brokerage transactions to the Portfolio's
custodian, acting as a broker-dealer, or to other broker-dealers, so long
as transaction quality and commission rates are comparable to those of
other broker-dealers, where the broker-dealers will allocate a portion of
the commissions paid toward payment of the Portfolio's expenses. These
expenses currently include transfer agent and custodian fees.
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 February 28, 1994 was
4%.
17.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.
YIELD is a way of showing the rate of income the Portfolio earns on its
investments as a percentage of the Portfolio's share price. To calculate
yield, the Portfolio takes the income it earned from its portfolio of
investments for a 30-day period (net of expenses), divides it by the
average number of Portfolio shares entitled to receive dividends, and
expresses the result as an annualized percentage rate based on the
Portfolio's share price at the end of the 30-day period. Yields are
calculated according to accounting methods that are standardized for all
stock and bond funds. Because yield accounting methods differ from the
methods used for other accounting purposes, the Portfolio's yield may not
equal the income paid to your account, or the income reported in the
Portfolio's financial statements.
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 return if the Portfolio's performance had been constant over the
entire period. Because average annual total 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 total 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 as compared to the cumulative total returns
of the S&P 500 for periods ended February 28, 1994 were as
follows:
Average Cumulative Cumulative
Annual Total Total S&P 500 Total
Returns** Returns** Returns
One Year 8.06% 8.06% 8.33%
Five Year 13.29% 86.64% 89.60%
Life of Portfolio* 13.52% 115.09% 119.11%
* Life of Portfolio: February 17, 1988 (commencement of operations) to
February 28, 1994.
** If FMR had not reimbursed certain Portfolio expenses during these
periods, the total returns would have been lower.
The figures for the S&P 500 show the change in value of the S&P 500
and assume reinvestment of all dividends paid by the S&P 500 stocks.
Tax consequences are not included in the illustration, nor are brokerage or
other fees included in the S&P 500 figures. The Portfolio may quote its
adjusted net asset value, including all distributions paid. This may be
averaged over specified periods and may be used to calculate the
Portfolio's moving average. Other illustrations may show moving averages
over specified periods.
18.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 .61% of the Portfolio's average net assets for the fiscal year
ended February 28, 1994.
FIIOC, 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.
Service, 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.
DISTRIBUTION AND SERVICE PLAN. The Portfolio has adopted a Distribution and
Service Plan (the Plan) under Rule 12b-1 under 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. The Board of
Trustees has not yet authorized such payments.
Distributors may, at its own expense, provide promotional incentives to
investment professionals who support the sale of shares of the Portfolio
without reimbursement from the Portfolio. Investment professionals 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 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 for 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, Massachusetts. 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
activities required for its operation.
FMR 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 February 28, 1994, FMR advised funds having more than 15
million shareholder accounts with a total value of more than $ 225
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), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
19.APPENDIX
The following paragraphs provide a brief description of securities in which
the Portfolio may invest and transactions it may make. The Portfolio is not
limited by this discussion, however, and may purchase other types of
securities and enter into other types of transactions if they are
consistent with the Portfolio's investment objective and policies.
OPTIONS AND FUTURES CONTRACTS. The Portfolio may buy and sell options and
futures contracts 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, including selling futures, buying puts, and
writing calls, hedge the Portfolio's investments against price
fluctuations. Other strategies, including buying futures, writing puts, and
buying calls, tend to increase market exposure. Options and futures may be
combined with each other in order to adjust the risk and return
characteristics of the overall strategy. The Portfolio may invest in
options and futures based on any type of security or index related to its
investments, including options and futures traded on foreign exchanges and
options not traded on exchanges.
Options and futures can be volatile investments, and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower the Portfolio's
return. Options and futures traded on foreign exchanges generally are not
regulated by U.S. authorities, and may offer less liquidity and less
protection to the Portfolio in the event of default by the other party to
the contract. The Portfolio could also experience losses if the prices of
its options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market.
The Portfolio intends to use options and futures contracts 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 15% of total assets under normal conditions.
ILLIQUID INVESTMENTS. The Portfolio may invest up to 10% of its net assets
in illiquid investments. Under the supervision of the Board of Trustees,
FMR determines the liquidity of the Portfolio's investments. The absence of
a trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Portfolio to sell them promptly at an acceptable price.
INDEXED SECURITIES. Indexed securities include commercial paper,
certificates of deposit, and other fixed-income securities whose values at
maturity or coupon interest rates are determined by reference to the return
of the S&P 500 or a comparable stock index. Indexed securities can be
affected by changes in interest rates and the creditworthiness of their
issuers as well as stock prices, and may not track the S&P 500 as
accurately as direct investments in S&P 500 stocks.
SWAP AGREEMENTS. Swap agreements typically involve a commitment by the
Portfolio to pay specified amounts (such as fixed or floating interest
rate) at regular intervals in return for all or a portion of the investment
return of the S&P 500 or a comparable stock index. As with stock index
options and futures, swap agreements provide exposure to the stock market,
but may not track market returns as accurately as direct investments in
S&P 500 stocks. Swap agreements may fail to track their indices
effectively if the Portfolio does not hold assets that offset its payment
obligations. In addition, the Portfolio typically depends on the credit of
a single counterparty when investing in swap agreements, and may suffer
losses if the counterparty's credit declines.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, the
Portfolio buys a security at one price and simultaneously agrees to sell it
back at a higher price. The Portfolio may also make securities loans to
broker-dealers and institutional investors, including FBSI . In the
event of bankruptcy of the other party to either a repurchase agreement or
a securities loan, the Portfolio could experience delays in recovering its
cash or the securities it lent. To the extent that, in the meantime, the
value of securities purchased had decreased, or the value of the securities
lent had increased, the Portfolio could experience a loss. In all cases,
FMR must find the creditworthiness of the other party to the transaction
satisfactory.
INTERFUND BORROWING 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 instruments (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 its 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.
PERFORMANCE UPDATE
$100,000 OVER LIFE OF FUND
U.S. Equity Index (650)
02/17/88 100000.00 100000.00
02/29/88 103400.00 103287.20
03/31/88 100200.00 100095.63
04/30/88 100900.00 101206.69
05/31/88 101700.00 102087.19
06/30/88 106307.66 106772.99
07/31/88 106106.12 106367.25
08/31/88 102478.56 102750.77
09/30/88 106727.96 107127.95
10/31/88 109774.43 110106.11
11/30/88 108149.64 108531.59
12/31/88 110097.83 110430.89
01/31/89 118116.15 118514.43
02/28/89 115237.78 115563.42
03/31/89 117909.84 118256.05
04/30/89 124121.07 124393.54
05/31/89 129090.05 129431.48
06/30/89 128241.54 128693.72
07/31/89 139909.33 140314.76
08/31/89 142513.75 143064.93
09/30/89 141893.03 142478.36
10/31/89 138644.37 139172.87
11/30/89 141473.84 142011.99
12/31/89 144725.55 145420.28
01/31/90 134955.50 135662.58
02/28/90 136673.32 137412.63
03/31/90 140223.80 141054.06
04/30/90 136761.49 137527.71
05/31/90 150069.77 150936.66
06/30/90 148987.01 149910.29
07/31/90 148442.06 149430.58
08/31/90 134818.53 135922.05
09/30/90 128134.10 129302.65
10/31/90 127584.64 128746.65
11/30/90 135826.54 137063.68
12/31/90 139466.58 140887.76
01/31/91 145578.66 147030.47
02/28/91 155913.64 157543.14
03/31/91 159698.28 161355.69
04/30/91 160034.02 161742.94
05/31/91 166860.64 168730.24
06/30/91 159228.13 161002.39
07/31/91 166552.85 168505.10
08/31/91 170496.93 172498.67
09/30/91 167580.94 169617.95
10/31/91 169850.14 171890.83
11/30/91 162929.06 164963.63
12/31/91 181531.45 183835.47
01/31/92 178058.27 180416.13
02/29/92 180373.73 182761.54
03/31/92 176779.45 179197.69
04/30/92 181906.87 184466.10
05/31/92 182839.13 185369.98
06/30/92 180038.57 182607.97
07/31/92 187427.77 190076.64
08/31/92 183557.24 186180.06
09/30/92 185665.47 188376.99
10/31/92 186137.60 189036.31
11/30/92 192511.37 195482.45
12/31/92 194881.44 197886.88
01/31/93 196428.12 199549.13
02/28/93 199045.58 202263.00
03/31/93 203226.05 206530.75
04/30/93 198196.36 201532.70
05/31/93 203494.44 206933.78
06/30/93 203984.00 207533.89
07/31/93 203136.08 206703.75
08/31/93 210888.44 214537.82
09/30/93 209194.03 212885.88
10/31/93 213458.32 217292.62
11/30/93 211387.09 215228.34
12/31/93 213970.40 217832.60
01/31/94 221156.43 225238.91
02/28/94 215085.47 219112.41
$100,000 OVER LIFE OF FUND: LET'S SAY YOU INVESTED $100,000 IN FIDELITY
U.S. EQUITY INDEX PORTFOLIO ON FEBRUARY 17, 1988, WHEN THE FUND STARTED. BY
FEBRUARY 28, 1994, THE VALUE OF YOUR INVESTMENT WOULD HAVE GROWN TO
$215,085 - A 115.09% INCREASE ON YOUR INITIAL INVESTMENT. FOR COMPARISON,
LOOK AT HOW A $100,000 INVESTMENT IN THE S&P 500 (WITH DIVIDENDS
REINVESTED) DID OVER THE SAME PERIOD. IT WOULD HAVE GROWN TO $219,112 - A
119.11% INCREASE.
CUMULATIVE TOTAL RETURNS
FOR THE PERIOD ENDED FEBRUARY 28, 1994
Life of
One Five Fund
Year Years
FIDELITY U.S. EQUITY
8.06% 86.64% 115.09%
INDEX PORTFOLIO
S&P 500(Registered trademark) 8.33% 89.60 119.11%
%
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIOD ENDED FEBRUARY 28, 1994
Life of
One Five Fund
Year Years
FIDELITY U.S. EQUITY
8.06% 13.29% 13.52%
INDEX PORTFOLIO
S&P 500(Registered trademark) 8.33% 13.65% 13.87%
THE CHARTS ABOVE SHOW FIDELITY U.S. EQUITY INDEX PORTFOLIO'S TOTAL RETURNS,
WHICH INCLUDE CHANGES IN SHARE PRICE, AND REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS. FIGURES FOR THE S&P 500, AN UNMANAGED INDEX OF COMMON
STOCK PRICES, INCLUDE REINVESTMENT OF DIVIDENDS. S&P 500 IS A
REGISTERED TRADEMARK OF STANDARD & POOR'S CORPORATION.
AVERAGE ANNUAL TOTAL RETURNS ARE LOAD ADJUSTED. FIGURES FOR MORE THAN ONE
YEAR ASSUME A STEADY COMPOUNDED RATE OF RETURN AND ARE NOT THE FUND'S
YEAR-BY-YEAR RESULTS, WHICH FLUCTUATED OVER THE PERIODS SHOWN. THE LIFE OF
FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS, FEBRUARY 17, 1988, TO THE
PERIODS LISTED ABOVE.
ALL PERFORMANCE NUMBERS ARE HISTORICAL; THE FUND'S SHARE PRICE AND RETURN
WILL VARY AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES.
FIDELITY FUND 1ST PAGE PROOF - DISTRIBUTED 2/13/92
AN INTERVIEW WITH
JENNIFER FARRELLY,
PORTFOLIO MANAGER OF
FIDELITY U.S. EQUITY INDEX PORTFOLIO
Q. JENNIFER, HOW DID THE FUND DO?
A. The fund had a total return of 8.06% for the 12 months ended February
28, 1994. That's slightly below the benchmark against which it's measured,
the S&P 500 index, which was up 8.33% for the year. Since the fund
attempts to mirror the index, the slight difference in these returns can be
attributed to management expenses.
Q. WHICH SECTORS LED THE FUND'S PERFORMANCE?
A. Broadly speaking, cyclical stocks - those that tend to rise and fall
with the economy - were among the fund's best performers over the past
year. These stocks benefited from a strengthening U.S. economy, and they
cut across several sectors.
Q. CAN YOU GIVE US SOME EXAMPLES?
A. Although they were only about 5% of the fund on February 28, as measured
by the S&P 500 index industry groupings, consumer durables had the best
return of any sector. The Big Three auto makers - Chrysler, Ford and
General Motors - made up most of this group, and together they returned
more than 42% over the past year. Other stocks that benefited from the
improving economy included those in the capital goods sector - nearly 7% of
the fund. Machinery companies, in particular, effectively cut costs while
experiencing a surge in orders. Clark Equipment - up more than 140% - was
the S&P 500's top performer.
Q. WERE THERE ANY OTHER SECTORS THAT PROVIDED ATTRACTIVE RETURNS?
A. I would add technology, which made up more than 13% of the fund at the
end of February, and basic industries, nearly 8% of the fund, to the list
of winners. On the technology side, the boom in personal computers fueled
strong returns for the stocks of computer manufacturers and companies
specializing in computer networking, semiconductors and software. As for
the basic industries sector, gold and precious metals stocks led the way.
They benefited from an increased demand worldwide, and rose 56% over the
past year.
Q. THERE MUST HAVE BEEN LAGGARDS...
A. By far the most disappointing sector was consumer non-durables, which
made up nearly 20% of the index at the end of the period. These stocks
included food, beverage and tobacco companies, as well as apparel
manufacturers and health-care companies. Together, these stocks had a total
return of about -5% for the year.
Q. WHY THE POOR SHOWING?
A. With inflation remaining low, many of the food, beverage and tobacco
companies lost the ability to raise prices. In addition, consumers flocked
to generic, off-brand items to save money, which left manufacturers of
traditional, brand-name products struggling for sales. Apparel
manufacturers were also hurt by slow sales, as low interest rates enticed
consumers to splurge on larger, durable goods like homes and automobiles.
Q. WHAT ABOUT HEALTH CARE?
A. The health-care group had a split personality. Uncertainty over
health-care reform hurt the performance of many of these stocks; investors
worried about the ability of some health-care companies to raise prices
going forward. For example, hospital supply companies fell 22% for the year
and drug stocks were down about 8%. However, investors felt hospital
management companies, which purchase these supplies, would benefit from
lower prices. So while the health-care sector as a whole finished about -3%
for the year, hospital management companies were the S&P 500's top
performing industry, up more than 80%.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. The volatility of S&P 500 stocks was unusually low last year, and I
expect that might change because the market's valuation - stock prices
compared to other measures like earnings - remains quite high. In fact, in
March, after the period ended, stocks fell on fears of rising interest
rates. It's tough to predict whether this might be part of a correction or
even a longer market downturn. However, history shows that over the long
term, stocks have been one of the best performing asset classes.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - 97.3%
AEROSPACE & DEFENSE - 1.7%
AEROSPACE & DEFENSE - 1.2%
Boeing Co. 187,319 $ 8,757,108 09702310
Grumman Corp. 18,738 702,675 40018110
Lockheed Corp. 34,377 2,255,991 53982110
Martin Marietta Corp. 52,624 2,420,704 57290010
McDonnell Douglas Corp. 21,747 2,593,330 58016910
Northrop Corp. 27,054 1,088,924 66680710
Rockwell International Corp. 121,522 5,058,353 77434710
22,877,085
DEFENSE ELECTRONICS - 0.4%
E-Systems, Inc. 18,536 843,388 26915730
Loral Corp. 45,556 1,759,601 54385910
Raytheon Co. 74,866 4,641,692 75511110
7,244,681
SHIP BUILDING & REPAIR - 0.1%
General Dynamics Corp. 17,050 1,589,913 36955010
TOTAL AEROSPACE & DEFENSE 31,711,679
BASIC INDUSTRIES - 7.4%
CHEMICALS & PLASTICS - 4.3%
Air Products & Chemicals, Inc. 63,028 3,001,709 00915810
Avery Dennison Corp. 32,151 1,004,719 05361110
Cytec Industries, Inc. (WI) (a) 7,072 108,732 23282010
du Pont (E.I.) de Nemours & Co. 373,740 19,948,373 26353410
Dow Chemical Co. 151,186 9,619,209 26054310
Eastman Chemical Co. 45,029 1,879,961 27743210
Engelhard Corp. 52,929 1,455,548 29284510
Ethyl Corp. 65,244 1,198,859 29765910
FMC Corp.(a) 19,753 965,428 30249130
First Mississippi Corp. 11,023 161,211 32089110
Goodrich (B.F.) Company 14,229 583,389 38238810
Grace (W.R.) & Co. 51,298 2,295,586 38388310
Great Lakes Chemical Corp. 39,200 3,067,400 39056810
Hercules, Inc. 23,462 2,701,063 42705610
Minnesota Mining & Manufacturing Co 118,965 12,535,937 60405910
Monsanto Co. 65,378 5,009,589 61166210
Morton International, Inc. 26,855 2,802,991 61933110
NL Industries, Inc. (a) 27,792 246,654 62915640
Nalco Chemical Co. 38,000 1,368,000 62985310
PPG Industries, Inc. 58,635 4,500,236 69350610
Praxair, Inc. 73,795 1,383,656 74005P10
Raychem Corp. 23,200 870,000 75460310
Rohm & Haas Co. 37,380 2,135,333 77537110
Union Carbide Corp. 83,695 1,998,218 90558110
80,841,801
IRON & STEEL - 0.4%
Armco, Inc. (a) 57,301 $ 329,481 04217010
Bethlehem Steel Corp. (a) 50,275 1,093,481 08750910
Inland Steel Industries, Inc. (a) 22,139 736,122 45747210
Nucor Corp. 47,900 2,772,213 67034610
USX-U.S. Steel Group 38,016 1,568,160 90337T10
Worthington Industries, Inc. 49,750 970,125 98181110
7,469,582
METALS & MINING - 0.7%
ASARCO, Inc. 23,045 581,886 04341310
Alcan Aluminium Ltd. 123,815 2,935,962 01371610
Aluminum Co. of America 48,803 3,672,426 02224910
Cyprus Amax Minerals Co. 50,373 1,523,783 23280910
Inco Ltd. 64,310 1,572,605 45325840
Phelps Dodge Corp. 38,872 2,181,691 71726510
Reynolds Metals Co. 32,962 1,672,822 76176310
14,141,175
PACKAGING & CONTAINERS - 0.2%
Ball Corp. 16,282 411,121 05849810
Bemis Co., Inc. 28,160 637,120 08143710
Crown Cork & Seal Co., Inc. (a) 48,608 1,841,028 22825510
2,889,269
PAPER & FOREST PRODUCTS - 1.8%
Boise Cascade Corp. 21,036 546,936 09738310
Champion International Corp. 51,211 1,613,147 15852510
Federal Paper Board Co., Inc. 23,244 621,777 31369310
Georgia-Pacific Corp. 49,423 3,521,389 37329810
International Paper Co. 68,023 4,940,170 46014610
James River Corp. of Virginia 44,959 859,841 47034910
Kimberly-Clark Corp. 88,700 4,900,675 49436810
Louisiana-Pacific Corp. 60,462 2,599,866 54634710
Mead Corp. 32,673 1,437,612 58283410
Potlatch Corp. 16,031 745,442 73762810
Scott Paper Co. 40,784 1,850,574 80987710
Stone Container Corp. (a) 39,227 622,729 86158910
Temple-Inland, Inc. 30,420 1,559,025 87986810
Union Camp Corp. 38,586 1,856,951 90553010
Westvaco Corp. 36,776 1,268,772 96154810
Weyerhaeuser Co. 113,038 5,369,305 96216610
34,314,211
TOTAL BASIC INDUSTRIES 139,656,038
CONGLOMERATES - 1.4%
Allied-Signal, Inc. 78,076 5,963,055 01951210
Crane Co. 16,503 470,336 22439910
Dial Corp. (The) 26,000 1,157,000 25247010
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
CONGLOMERATES - CONTINUED
Harris Corp. 21,948 $ 1,116,605 41387510
ITT Corp. 65,565 6,327,023 45067910
Litton Industries, Inc. (a) 25,060 1,675,888 53802110
Teledyne, Inc. 30,670 640,236 87933510
Textron, Inc. 48,701 2,824,658 88320310
Tyco Laboratories, Inc. 25,500 1,332,375 90212010
United Technologies Corp. 69,053 4,695,604 91301710
Whitman Corp. 59,130 946,080 96647K10
27,148,860
CONSTRUCTION & REAL ESTATE - 0.7%
BUILDING MATERIALS - 0.4%
Armstrong World Industries, Inc. 20,555 1,112,539 04247610
Masco Corp. 84,254 2,959,422 57459910
Owens-Corning Fiberglas Corp. (a) 23,646 957,663 69073420
Sherwin-Williams Co. 48,904 1,723,866 82434810
6,753,490
CONSTRUCTION - 0.1%
Centex Corp. 17,438 649,566 15231210
Kaufman & Broad Home Corp. (a) 17,793 366,981 48616810
Morrison-Knudsen Corp. 17,500 457,188 61844710
Pulte Corp. 15,128 512,461 74586710
Skyline Corp. 6,213 128,920 83083010
2,115,116
ENGINEERING - 0.2%
EG&G, Inc. 31,664 589,742 26845710
Fluor Corp. 45,292 2,009,833 34386110
Foster Wheeler Corp. 19,741 826,654 35024410
3,426,229
TOTAL CONSTRUCTION & REAL ESTATE 12,294,835
DURABLES - 4.7%
AUTOS, TIRES, & ACCESSORIES - 3.9%
Chrysler Corp. 194,312 11,027,206 17119610
Cooper Tire & Rubber Co. 46,200 1,247,400 21683110
Cummins Engine Co., Inc. 20,474 1,000,667 23102110
Dana Corp. 25,552 1,418,136 23581110
Eaton Corp. 38,398 2,222,284 27805810
Echlin, Inc. 32,065 957,942 27874910
Ford Motor Co. 274,113 17,029,270 34537010
General Motors Corp. 391,932 22,830,039 37044210
Genuine Parts Company 68,488 2,602,544 37246010
Goodyear Tire & Rubber Co. 82,832 3,748,148 38255010
Johnson Controls, Inc. 22,344 1,321,089 47836610
NACCO Industries, Inc. Class A 5,010 287,449 62957910
Navistar International Corp. (a) 40,307 $ 972,406 63934E10
PACCAR, Inc. 21,523 1,253,715 69371810
Pep Boys - Manny, Moe & Jack 33,500 954,750 71327810
SPX Corp. 7,614 123,728 78463510
Snap-on Tools Corp. 23,448 1,025,850 83303410
TRW, Inc. 35,169 2,571,733 87264910
72,594,356
CONSUMER ELECTRONICS - 0.4%
Black & Decker Corp. 46,168 940,673 09179710
Fedders USA Inc. (a) 11,115 77,805 31313510
Maytag Co. 59,190 1,035,825 57859210
Newell Co. 43,500 1,750,875 65119210
Stanley Works 24,701 1,062,143 85461610
Whirlpool Corp. 38,781 2,627,413 96332010
7,494,734
HOME FURNISHINGS - 0.0%
Bassett Furniture Industries, Inc. 8,031 238,922 07020310
TEXTILES & APPAREL - 0.4%
Hartmarx Corp. (a) 18,124 117,806 41711910
Liz Claiborne, Inc. 45,101 1,031,685 53932010
NIKE, Inc. Class B 41,800 2,163,150 65410610
Oshkosh B'Gosh, Inc. Class A 8,117 119,726 68822220
Reebok International Ltd. 46,531 1,541,339 75811010
Russell Corp. 22,646 639,750 78235210
Springs Industries, Inc. Class A 9,621 374,016 85178310
Stride Rite Corp. 27,800 476,075 86331410
VF Corp. 35,616 1,816,416 91820410
8,279,963
TOTAL DURABLES 88,607,975
ENERGY - 9.7%
COAL - 0.0%
Eastern Enterprises Co. 12,427 306,015 27637F10
ENERGY SERVICES - 0.8%
Baker Hughes, Inc. 77,395 1,470,505 05722410
Dresser Industries, Inc. 75,976 1,728,454 26159710
Halliburton Co. 63,023 1,977,347 40621610
Helmerich & Payne, Inc. 13,528 358,492 42345210
McDermott International, Inc. 29,443 680,869 58003710
Rowan Companies, Inc. (a) 46,182 334,820 77938210
Schlumberger Ltd. 134,200 7,632,625 80685710
14,183,112
OIL & GAS - 8.9%
Amerada Hess Corp. 50,998 2,365,032 02355110
Amoco Corp. 274,198 14,326,846 03190510
Ashland Oil, Inc. 33,000 1,353,000 04454010
Atlantic Richfield Co. 87,808 8,846,656 04882510
Burlington Resources, Inc. 71,800 3,087,400 12201410
Chevron Corp. 179,598 15,580,127 16675110
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Exxon Corp. 685,059 $ 44,443,203 30229010
Kerr-McGee Corp. 28,556 1,281,451 49238610
Louisiana Land & Exploration Co. 18,236 679,291 54626810
Maxus Energy Corp. (a) 73,904 351,044 57773010
Mobil Corp. 220,278 17,319,358 60705910
Occidental Petroleum Corp. 168,238 3,049,314 67459910
Oryx Energy Co. 53,426 961,668 68763F10
Pennzoil Co. 25,248 1,350,768 70990310
Phillips Petroleum Co. 144,166 3,910,503 71850710
Royal Dutch Petroleum Co. 295,824 31,616,190 78025770
Santa Fe Energy Resources, Inc. 49,632 459,096 80201210
Sun Company, Inc. 58,826 2,007,437 86676210
Texaco, Inc. 142,732 9,259,739 88169410
USX-Marathon Group 158,182 2,728,640 90290582
Unocal Corp. 132,972 3,656,730 91528910
168,633,493
TOTAL ENERGY 183,122,620
FINANCE - 10.9%
BANKS - 5.1%
Banc One Corp. 206,915 7,035,110 05943810
Bank of Boston Corp. 49,239 1,150,962 06071610
Bankers Trust New York Corp. 44,989 3,694,722 06636510
Bank America Corp. 197,235 8,505,759 06605010
Barnett Banks, Inc. 53,644 2,239,637 06805510
Boatmen's Bancshares, Inc. 57,100 1,627,350 09665010
Chase Manhattan Corp. 101,191 3,301,356 16161010
Chemical Banking Corp. 139,127 5,182,481 16372210
Citicorp (a) 207,237 8,600,336 17303410
Core States Financial Corp. 67,500 1,746,563 21869510
First Chicago Corp. 45,848 2,240,821 31945510
First Fidelity Bancorporation 44,404 1,942,675 32019510
First Interstate Bancorp 42,932 2,871,078 32054810
First Union Corp. 92,754 3,802,914 33735810
Fleet Financial Group, Inc. 76,244 2,477,930 33891510
Mellon Bank Corp. 35,310 1,959,705 58550910
Morgan (J.P.) & Co., Inc. 107,179 7,301,569 61688010
NBD Bancorp, Inc. 88,543 2,545,611 62890010
Nations Bank Corp. 149,982 7,330,370 63858510
Norwest Corp. 160,604 3,774,194 66938010
PNC Financial Corp. 129,068 3,565,504 69347510
Shawmut National Corp. 51,900 1,102,875 82048410
SunTrust Banks, Inc. 68,600 3,104,150 86791410
U.S. Bancorp 54,750 1,450,875 91159610
Wachovia Corp. 95,400 $ 3,028,950 92977110
Wells Fargo & Co. 30,863 4,255,236 94974010
95,838,733
CREDIT & OTHER FINANCE - 1.0%
American Express Co. 267,891 7,835,812 02581610
Beneficial Corp. 28,654 1,081,689 08172110
Dean Witter Discover & Co. 93,720 3,373,920 24240V10
Household International, Inc. 52,072 1,802,993 44181510
MBNA Corp. 82,050 1,702,538 55262L10
National Intergroup, Inc. (a) 7,300 114,975 63654010
Transamerica Corporation 42,588 2,161,341 89348510
18,073,268
FEDERAL SPONSORED CREDIT - 0.9%
Federal Home Loan Mortgage Corporation 98,900 5,513,675 31340030
Federal National Mortgage Association 150,700 12,526,938 31358610
18,040,613
INSURANCE - 3.3%
Aetna Life & Casualty Co. 61,532 3,691,920 00814010
Alexander & Alexander Services, Inc. 22,600 460,475 01447610
American General Corp. 119,608 3,214,465 02635110
American International Group, Inc. 175,168 15,370,992 02687410
CIGNA Corp. 39,794 2,606,507 12550910
CNA Financial Corp. (a) 34,174 2,366,550 12611710
Capital Holding Corp. 55,712 1,922,064 14018610
Chubb Corp. (The) 48,294 3,555,646 17123210
Continental Corp. 30,371 766,868 21132710
General Re Corp. 46,700 4,932,688 37056310
Jefferson Pilot Corp. 27,819 1,310,970 47507010
Lincoln National Corp. 51,900 2,114,925 53418710
Marsh & McLennan Companies, Inc. 40,387 3,347,073 57174810
SAFECO Corp. 34,778 1,995,388 78642910
St. Paul Companies, Inc. (The) 23,554 1,957,926 79286010
Torchmark Corp. 40,750 1,752,250 89102710
Travelers, Inc. (The) 237,627 8,851,606 89419010
USF&G Corp. 46,789 666,743 90329010
USLIFE Corp. 12,431 484,809 91731810
61,369,865
SAVINGS & LOANS - 0.2%
Ahmanson (H.F.) & Co. 64,514 1,137,059 00867710
Golden West Financial Corp. 35,400 1,464,675 38131710
Great Western Financial Corp. 72,463 1,240,929 39144210
3,842,663
SECURITIES INDUSTRY - 0.4%
Merrill Lynch & Co., Inc. 115,654 4,698,444 59018810
Salomon, Inc. 60,953 3,032,412 79549B10
7,730,856
TOTAL FINANCE 204,895,998
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
HEALTH - 7.7%
DRUGS & PHARMACEUTICALS - 4.9%
ALZA Corp. Class A 42,700 $ 960,750 02261510
Allergan, Inc. 36,600 860,100 01849010
American Cyanamid Co. 49,506 2,196,829 02532110
American Home Products Corp. 171,142 10,247,127 02660910
Amgen, Inc. (a) 74,400 3,106,200 03116210
Bristol-Myers Squibb Co. 285,814 15,791,224 11012210
IMCERA Group, Inc. 42,196 1,566,527 45245410
Lilly (Eli) & Co. 161,524 8,904,011 53245710
Merck & Co., Inc. 707,531 22,906,316 58933110
Pfizer, Inc. 175,084 10,154,872 71708110
Schering-Plough Corp. 106,574 6,367,797 80660510
Syntex Corporation 121,976 1,890,628 87161610
Upjohn Co. 95,918 2,781,622 91530210
Warner-Lambert Co. 74,668 4,750,752 93448810
92,484,755
MEDICAL EQUIPMENT & SUPPLIES - 2.2%
Abbott Laboratories 456,456 12,609,597 00282410
Bard (C.R.), Inc. 28,768 809,100 06738310
Bausch & Lomb, Inc. 32,670 1,641,668 07170710
Baxter International, Inc. 152,280 3,464,370 07181310
Becton, Dickinson & Co. 41,592 1,632,486 07588710
Biomet, Inc. (a) 63,600 683,700 09061310
Johnson & Johnson 360,604 14,469,236 47816010
McKesson Corp. 22,147 1,417,408 58155610
Medtronic, Inc. 31,660 2,524,885 58505510
Millipore Corp. 15,500 666,500 60107310
Pall Corp. 64,128 1,154,304 69642930
St. Jude Medical, Inc. 25,700 732,450 79084910
U.S. Surgical Corp. 30,900 540,750 91270710
42,346,454
MEDICAL FACILITIES MANAGEMENT - 0.6%
Beverly Enterprises, Inc. (a) 44,967 680,126 08785110
Columbia/HCA Healthcare Corp. 188,817 8,119,131 19767710
Community Psychiatric Centers 23,654 422,815 20401510
Manor Care, Inc. 31,620 830,025 56405410
National Medical Enterprises, Inc. 91,574 1,430,844 63688610
11,482,941
TOTAL HEALTH 146,314,150
INDUSTRIAL MACHINERY & EQUIPMENT - 5.9%
ELECTRICAL EQUIPMENT - 3.7%
Corning, Inc. 111,016 3,385,988 21935010
Emerson Electric Co. 124,373 8,006,512 29101110
General Electric Co. 470,665 49,596,324 36960410
General Signal Corp. 25,872 879,648 37083810
Grainger (W.W.), Inc. 28,166 $ 1,742,771 38480210
Honeywell, Inc. 74,000 2,479,000 43850610
Scientific-Atlanta, Inc. 20,490 553,230 80865510
Westinghouse Electric Corp. 193,634 2,807,693 96040210
Zenith Electronics Corp. (a) 18,730 245,831 98934910
69,696,997
INDUSTRIAL MACHINERY & EQUIPMENT - 1.6%
Briggs & Stratton Corp. 7,917 674,924 10904310
Caterpillar, Inc. 56,015 6,070,626 14912310
Cincinnati Milacron, Inc. 18,428 439,969 17217210
Clark Equipment Co. (a) 9,620 588,023 18139610
Cooper Industries, Inc. 62,914 2,437,918 21666910
Deere & Co. 46,279 3,904,791 24419910
Dover Corp. 31,578 1,934,153 26000310
Giddings & Lewis, Inc. 18,700 476,850 37504810
Harnischfeger Industries, Inc. 14,144 357,136 41334510
Illinois Tool Works, Inc. 62,320 2,679,760 45230810
Ingersoll-Rand Co. 58,122 2,230,432 45686610
Parker-Hannifin Corp. 26,753 946,387 70109410
TRINOVA Corp. 15,740 592,218 89667810
Tenneco, Inc. 93,349 5,204,207 88037010
Timken Co. 16,884 601,493 88738910
Varity Corp. (a) 19,659 894,485 92224R60
30,033,372
POLLUTION CONTROL - 0.6%
Browning-Ferris Industries, Inc. 95,070 2,709,495 11588510
Ogden Corp. 24,045 547,024 67634610
Rollins Environmental Services, Inc. 33,224 170,273 77570910
Safety Kleen Corp. 31,907 498,547 78648410
WMX Technologies, Inc. 266,247 6,556,332 92929Q10
Zurn Industries, Inc. 6,914 195,321 98982410
10,676,992
TOTAL INDUSTRIAL MACHINERY
& EQUIPMENT 110,407,361
MEDIA & LEISURE - 4.9%
BROADCASTING - 1.3%
CBS, Inc. 8,611 2,645,730 12484510
Capital Cities/ABC, Inc. 8,589 5,712,759 13985910
Comcast Corp. Class A 121,650 2,463,413 20030020
Tele-Communications, Inc. Class A (a) 247,952 5,857,866 87924010
Time Warner, Inc. 206,674 7,879,446 88731510
24,559,214
ENTERTAINMENT - 0.8%
Disney (Walt) Co. 295,112 14,202,265 25468710
King World Productions, Inc. 20,450 761,763 49566710
14,964,028
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.3%
Brunswick Corp. 52,503 $ 1,115,689 11704310
Fleetwood Enterprises, Inc. 25,154 562,821 33909910
Hasbro, Inc. 48,441 1,707,545 41805610
Mattel, Inc. 92,548 2,417,817 57708110
Outboard Marine Corp. 10,923 273,075 69002010
6,076,947
LODGING & GAMING - 0.4%
Bally Manufacturing Corp. (a) 23,433 207,968 05873210
Hilton Hotels Corp. 26,458 1,921,512 43284810
Marriott International, Inc. 64,340 1,881,945 57190010
Promus Companies, Inc. (a) 56,343 2,774,893 74342A10
6,786,318
PUBLISHING - 1.3%
American Greetings Corp. Class A 40,700 1,134,513 02637510
Dow Jones & Co Inc. 54,913 2,182,792 26056110
Dun & Bradstreet Corp. 97,620 5,942,618 26483010
Gannett Co., Inc. 80,988 4,373,352 36473010
Harcourt Gen. Inc. 42,298 1,475,143 41163G10
Knight-Ridder, Inc. 30,067 1,721,336 49904010
McGraw-Hill, Inc. 27,159 1,914,710 58064510
Meredith Corp. 8,122 359,399 58943310
New York Times Co. (The) Class A 58,395 1,635,060 65011110
Times Mirror Co., Series A 70,850 2,435,469 88736010
Tribune Co. 36,892 2,148,959 89604710
25,323,351
RESTAURANTS - 0.8%
Luby's Cafeterias, Inc. 15,106 353,103 54928210
McDonald's Corp. 194,842 11,812,296 58013510
Ryan's Family Steak Houses, Inc. (a) 29,400 224,175 78351910
Shoney's, Inc. (a) 22,342 519,452 82503910
Wendy's International, Inc. 54,662 963,418 95059010
13,872,444
TOTAL MEDIA & LEISURE 91,582,302
NONDURABLES - 11.1%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 49,300 1,811,775 72368610
BEVERAGES - 3.3%
Anheuser-Busch Companies, Inc. 148,184 7,335,108 03522910
Brown-Forman Corp. Class B 14,587 1,243,542 11563720
Coca-Cola Company (The) 716,648 30,547,121 19121610
Coors (Adolph) Co. Class B 21,042 391,907 21701610
PepsiCo, Inc. 437,509 17,117,540 71344810
Seagram Co. Ltd. 205,544 5,883,021 81185010
62,518,239
FOODS - 3.0%
Archer-Daniels-Midland Co. 183,846 $ 4,711,054 03948310
Borden, Inc. 77,872 1,158,346 09959910
CPC International, Inc. 82,790 4,056,710 12614910
Campbell Soup Co. 138,802 5,829,684 13442910
ConAgra, Inc. 138,529 3,792,231 20588710
General Mills, Inc. 87,906 4,900,760 37033410
Gerber Products Co. 38,192 1,074,150 37371210
Heinz (H.J.) Co. 139,598 4,554,385 42307410
Hershey Foods Corp. 49,705 2,547,381 42786610
Kellogg Co. 126,088 6,367,444 48783610
Pet, Inc. 57,530 1,129,026 71582510
Quaker Oats Co. 37,393 2,374,456 74740210
Ralston Purina Co. 57,360 2,495,160 75127730
SYSCO Corp. 101,808 2,761,542 87182910
Sara Lee Corp. 267,816 5,992,383 80311110
Wrigley (Wm.) Jr. Company 64,144 2,982,696 98252610
56,727,408
HOUSEHOLD PRODUCTS - 2.9%
Alberto Culver Co. Class B 15,932 352,496 01306810
Avon Products, Inc. 39,682 2,296,596 05430310
Clorox Co. 29,962 1,599,222 18905410
Colgate-Palmolive Co. 85,258 5,552,427 19416210
Gillette Company 123,246 7,610,441 37576610
International Flavors & Fragrances, Inc. 62,232 2,310,363 45950610
Premark International, Inc. 17,500 1,408,750 74045910
Procter & Gamble Co. 376,578 21,606,163 74271810
Rubbermaid, Inc. 88,370 2,673,193 78108810
Unilever NV ADR 88,386 9,976,570 90478450
55,386,221
TOBACCO - 1.8%
American Brands, Inc. 111,156 3,682,043 02470310
Philip Morris Companies, Inc. 483,718 27,088,208 71815410
UST, Inc. 114,660 3,052,823 90291110
33,823,074
TOTAL NONDURABLES 210,266,717
PRECIOUS METALS - 0.6%
American Barrick Resoures Corp. 156,500 3,928,446 02451E10
Echo Bay Mines Ltd. 61,700 794,396 27875110
Homestake Mining Co. 75,610 1,606,713 43761410
Newmont Mining Corp. 37,677 2,043,977 65163910
Placer Dome Inc. 131,235 3,172,687 72590610
11,546,219
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
RETAIL & WHOLESALE - 6.6%
APPAREL STORES - 0.6%
Brown Group, Inc. 9,721 $ 341,450 11565710
Charming Shoppes, Inc. 56,716 737,308 16113310
Gap, Inc. 80,064 3,622,896 36476010
Genesco, Inc. (a) 12,718 57,231 37153210
Limited, Inc. (The) 200,340 3,906,630 53271610
Melville Corp. 58,026 2,248,508 58574510
TJX Companies, Inc. 40,566 1,090,211 87254010
12,004,234
DRUG STORES - 0.2%
Long Drug Stores, Inc. 11,225 444,791 54316210
Rite Aid Corporation 48,496 927,486 76775410
Walgreen Co. 67,844 2,756,163 93142210
4,128,440
GENERAL MERCHANDISE STORES - 4.0%
Dayton Hudson Corp. 39,516 2,825,394 23975310
Dillard Department Stores, Inc. Class A 62,261 2,218,048 25406310
K mart Corp. 225,168 4,278,192 48258410
May Department Stores Co. (The) 137,130 5,999,438 57777810
Mercantile Stores Co., Inc. 20,393 782,581 58753310
Nordstrom, Inc. 45,194 1,762,566 65566410
Penney (J.C.) Co., Inc. 129,924 7,113,339 70816010
Price/Costco, Inc. 119,963 2,399,260 74143W10
Sears, Roebuck & Co. 193,540 8,830,263 81238710
Wal-Mart Stores, Inc. 1,267,928 35,977,457 93114210
Woolworth Corp. 72,852 1,602,744 98088310
73,789,282
GROCERY STORES - 0.7%
Albertson's, Inc. 139,612 4,031,297 01310410
American Stores Co. 39,070 1,865,593 03009610
Bruno's, Inc. 43,000 344,000 11688110
Fleming Companies, Inc. 20,285 522,339 33913010
Giant Food, Inc. Class A 32,870 854,620 37447810
Great Atlantic & Pacific Tea Co., Inc. 21,044 555,036 39006410
Kroger Co. (The) (a) 59,094 1,425,643 50104410
Supervalue, Inc. 39,087 1,446,219 86853610
Winn-Dixie Stores, Inc. 41,296 2,100,934 97428010
13,145,681
RETAIL & WHOLESALE, MISC - 1.1%
Circuit City Stores, Inc. 52,900 1,005,100 17273710
Handleman Co. (Del.) 18,511 212,877 41025210
Home Depot, Inc. (The) 247,100 10,285,538 43707610
Lowe's Companies, Inc. 40,592 2,684,146 54866110
Tandy Corp. 35,265 $ 1,463,498 87538210
Toys "R" Us, Inc. (a) 160,750 5,867,375 89233510
21,518,534
TOTAL RETAIL & WHOLESALE 124,586,171
SERVICES - 1.0%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc 41,400 1,355,850 46069010
LEASING & RENTAL - 0.2%
Blockbuster Entertainment Corp. 124,300 3,278,413 09367610
Ryder Systems, Inc. 42,191 1,133,883 78354910
4,412,296
PRINTING - 0.4%
Alco Standard Corp. 28,634 1,599,925 01378810
Deluxe Corp. 45,599 1,550,366 24801910
Donnelley (R.R.) & Sons Co. 85,282 2,643,742 25786710
Harland (John H.) Co. 16,900 399,263 41269310
Moore Corporation Ltd. 54,807 1,025,473 61578510
7,218,769
SERVICES - 0.3%
Block (H&R), Inc. 58,020 2,676,173 09367110
Ecolab, Inc. 34,600 795,800 27886510
Jostens, Inc. 25,000 446,875 48108810
National Education Corp. (a) 16,200 103,275 63577110
National Service Industries, Inc. 27,257 752,975 63765710
Pittston Company Services Group 22,448 620,126 72570110
Service Corp. International 46,232 1,236,706 81756510
6,631,930
TOTAL SERVICES 19,618,845
TECHNOLOGY - 7.3%
COMMUNICATIONS EQUIPMENT - 0.6%
Andrew Corp. (a) 9,124 447,076 03442510
Cisco Systems, Inc. (a) 68,200 5,029,750 17275R10
DSC Communications Corp. (a) 30,246 1,644,626 23331110
M/A-Com, Inc. (a) 13,836 91,664 55261810
Northern Telecom Ltd. 138,275 4,162,595 66581510
11,375,711
COMPUTER SERVICES & SOFTWARE - 1.1%
Autodesk, Inc. 13,300 768,075 05276910
Automatic Data Processing, Inc. 77,380 3,956,053 05301510
Ceridian Corp. (a) 24,448 556,192 15677T10
Computer Associates International Inc. 91,551 3,364,499 20491210
Computer Sciences Corp. (a) 27,954 1,090,206 20536310
Lotus Development Corp. (a) 24,049 1,671,406 54570010
Novell, Inc. (a) 172,800 4,406,400 67000610
Oracle Systems Corp. (a) 157,100 5,184,300 68389X10
Shared Medical Systems Corp. 12,429 332,476 81948610
21,329,607
VALUE VALUE
SHARES (NOTE 1) SHARES (NOTE 1)
COMMON STOCKS - CONTINUED
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 2.8%
Amdahl Corp. 62,922 $ 369,667 02390510
Apple Computer, Inc. 64,146 2,341,329 03783310
Compaq Computer Corp. (a) 45,500 4,493,125 20449310
Cray Research, Inc. (a) 14,418 434,342 22522410
Data General Corp. (a) 19,432 155,456 23768810
Digital Equipment Corp. (a) 74,547 2,171,181 25384910
Hewlett-Packard Co. 140,200 12,705,625 42823610
Intergraph Corp. (a) 25,366 247,319 45868310
International Business Machines Corp. 319,027 16,868,553 45920010
Pitney Bowes, Inc. 87,178 3,824,935 72447910
Sun Microsystems, Inc. (a) 56,400 1,529,850 86681010
Tandem Computers, Inc. (a) 62,407 928,304 87537010
Unisys Corp. (a) 89,885 1,303,333 90921410
Xerox Corp. 57,273 5,555,481 98412110
52,928,500
ELECTRONIC INSTRUMENTS - 0.1%
Perkin-Elmer Corp. 24,153 908,757 71404110
Tektronix, Inc. 16,932 450,815 87913110
1,359,572
ELECTRONICS - 2.2%
AMP, Inc. 57,926 3,678,301 03189710
Advanced Micro Devices, Inc. (a) 50,290 1,081,235 00790310
Intel Corp. 229,580 15,812,323 45814010
Motorola, Inc. 149,800 15,298,325 62007610
National Semiconductor Corp. (a) 61,120 1,329,360 63764010
Texas Instruments, Inc. 49,891 4,028,698 88250810
Thomas & Betts Corp. 10,320 665,640 88431510
41,893,882
PHOTOGRAPHIC EQUIPMENT - 0.5%
Eastman Kodak Co. 181,919 7,822,517 27746110
Polaroid Corp. 25,891 815,567 73109510
8,638,084
TOTAL TECHNOLOGY 137,525,356
TRANSPORTATION - 1.9%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 41,768 2,641,826 00176510
Delta Air Lines, Inc. 27,557 1,367,516 24736110
UAL Corp. (a) 13,424 1,802,172 90254910
USAir Group, Inc. (a) 32,450 369,119 91190510
6,180,633
RAILROADS - 1.3%
Burlington Northern, Inc. 48,886 3,073,707 12189710
CSX Corp. 57,329 5,044,952 12640810
Conrail, Inc. 43,960 2,731,015 20836810
Norfolk Southern Corp. 76,521 $ 5,279,949 65584410
Santa Fe Pacific Corp. 100,931 2,296,180 80218310
Union Pacific Corp. 113,144 6,760,354 90781810
25,186,157
TRUCKING & FREIGHT - 0.3%
Consolidated Freightways, Inc. (a) 19,445 520,154 20923710
Federal Express Corp. (a) 30,461 2,280,767 31330910
Roadway Services, Inc. 21,797 1,531,239 76974810
Yellow Corp. 15,433 447,557 98550910
4,779,717
TOTAL TRANSPORTATION 36,146,507
UTILITIES - 13.8%
CELLULAR - 0.3%
McCaw Cellular Communications, Inc.
Class A (a) 113,700 5,713,425 57946810
ELECTRIC UTILITY - 4.3%
American Electric Power Co., Inc. 101,725 3,369,641 02553710
Baltimore Gas & Electric Co. 80,038 1,860,884 05916510
Carolina Power & Light Co. 88,600 2,414,350 14414110
Central & South West Corp. 104,020 2,847,548 15235710
Commonwealth Edison Co. 117,740 3,149,545 20279510
Consolidated Edison Co. of New York, Inc. 129,168 3,826,602 20911110
Detroit Edison Company 81,071 2,280,122 25084710
Dominion Resources, Inc. (Va.) 92,415 3,812,119 25747010
Duke Power Co. 112,936 4,362,153 26439910
Entergy Corp. 154,538 5,138,389 29364G10
FPL Group, Inc. 103,651 3,498,221 30257110
Houston Industries, Inc. 71,836 2,900,379 44216110
Niagara Mohawk Power Corp. 78,249 1,467,169 65352210
Northern States Power Co. (Minn.) 36,773 1,516,886 66577210
Ohio Edison Co. 84,077 1,723,579 67734710
PSI Resources, Inc. 31,463 755,112 69363210
Pacific Gas & Electric Co. 238,628 7,546,611 69430810
PacifiCorp. 153,700 2,766,600 69511410
Peco Energy Co. 122,025 3,279,422 69330410
Public Service Enterprise Group, Inc. 133,438 4,053,179 74457310
SCEcorp 247,106 4,447,908 78388210
Southern Co. 353,180 7,262,264 84258710
Texas Utilities Co. 125,134 4,833,301 88284810
Union Electric Co. 56,400 2,086,800 90654810
81,198,784
GAS - 0.9%
Arkla, Inc. 67,600 540,800 04123710
Coastal Corp. (The) 57,529 1,812,164 19044110
Columbia Gas System, Inc. (The) (a) 27,852 790,301 19764810
Consolidated Natural Gas Co. 51,297 2,250,656 20961510
ENSERCH Corp. 36,566 566,773 29356710
Enron Corp. 131,916 4,204,823 29356110
VALUE MATURITY VALUE
SHARES (NOTE 1) AMOUNT (NOTE 1)
COMMON STOCKS - CONTINUED
UTILITIES - CONTINUED
GAS - CONTINUED
NICOR, Inc. 30,200 $ 815,400 65408610
ONEOK, Inc. 14,632 265,205 68267810
Pacific Enterprises 46,369 985,341 69423210
Panhandle Eastern Corp. 65,707 1,437,341 69846210
People's Energy Corp. 19,138 571,748 71103010
Sonat, Inc. 47,894 1,454,780 83541510
Transco Energy Co. 22,200 344,100 89353210
Williams Companies, Inc. 56,788 1,398,405 96945710
17,437,837
TELEPHONE SERVICES - 8.3%
American Telephone & Telegraph Co. 745,086 39,117,015 03017710
Ameritech Corp. 300,444 12,055,316 03095410
Bell Atlantic Corp. 240,462 13,165,295 07785310
BellSouth Corp. 273,660 15,256,545 07986010
GTE Corp. 521,268 17,006,369 36232010
MCI Communications Corp. 295,862 8,099,222 55267310
NYNEX Corp. 227,776 8,484,656 67076810
Pacific Telesis Group 229,203 12,491,564 69489010
Southwestern Bell Corp. 330,598 12,934,647 84533310
Sprint Corporation 188,200 6,986,925 85206110
U.S. West, Inc. 242,642 9,948,322 91288910
155,545,876
TOTAL UTILITIES 259,895,922
TOTAL COMMON STOCKS
(Cost $1,615,063,297) 1,835,327,555
PREFERRED STOCKS - 0.0%
FINANCE - 0.0%
CREDIT & OTHER FINANCE - 0.0%
National Intergroup, Inc., Series A,
$4.20 exchangeable 5,115 189,255 63654030
TOTAL PREFERRED STOCKS
(Cost $158,848) 189,255
PRINCIPAL
AMOUNT
U.S. TREASURY OBLIGATIONS - 0.3%
8 5/8%, 1/15/95 (b) $ 500,000 519,295 912827VT
11 1/4%, 2/15/95 (b) 1,000,000 1,067,030 912827RW
8 1/2%, 5/15/95 (b) 500,000 524,455 912827YQ
8 5/8%, 10/15/95 (b) 3,000,000 3,189,840 912827WT
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,533,358) 5,300,620
Repurchase Agreements - 2.4%
Investments in repurchase agreements,
(U.S. Treasury obligations), in a joint
trading account at 3.47% dated
2/28/94 due 3/1/94 $ 45,282,302 $ 45,278,000
TOTAL INVESTMENTS - 100%
(Cost $1,666,033,503) $ 1,886,095,430
LEGEND:
(c) Non-income producing
(d) A portion of the securities were pledged to cover margin requirements
for futures contracts. At the period end, the value of securities pledged
amounted to $5,300,620.
OTHER INFORMATION:
The fund had the following futures contracts open at period end (see Note 2
of Notes to Financial Statements):
NUMBER OF AGGREGATE EXPIRATION UNREALIZED
CONTRACTS CONTRACTS FACE VALUE DATE GAIN/(LOSS)
Sell:
S&P 500
Stock Index 238 $ 55,471,850 March 1994 $ (580,605)
S&P 500
Stock Index 5 $ 1,168,625 June 1994 $ (125)
$ 56,640,475 $ (580,730)
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 3.0%
INCOME TAX INFORMATION:
At February 28, 1994, the aggregate cost of investment securities for
income tax purposes was $1,667,176,574. Net unrealized appreciation
aggregated $218,918,856, of which $325,010,408 related to appreciated
investment securities and $106,091,552 related to depreciated investment
securities.
The fund hereby designates $4,981,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
February 28, 1994
ASSETS
Investment in securities, at value (including repurchase agreements of $45,278,000) (cost $ 1,886,095,430
$1,666,033,503) (Notes 1 and 2) - See accompanying schedule
Cash 888
Receivable for fund shares sold 3,797,410
Dividends receivable 6,366,934
Interest receivable 118,285
Other receivables 36,772
Receivable from investment adviser for expense reductions (Note 7) 586,777
Total assets 1,897,002,496
LIABILITIES
Payable for investments purchased $ 3,167
Payable for fund shares redeemed 3,134,445
Accrued management fee 444,852
Payable for daily variation on futures contracts 12,735
Other payables and accrued expenses 645,548
Collateral on securities loaned, at value (Note 5) 507,600
Total liabilities 4,748,347
NET ASSETS $ 1,892,254,149
Net Assets consist of (Note 1):
Paid in capital $ 1,657,635,829
Undistributed net investment income 6,424,856
Accumulated undistributed net realized gain (loss) on investments 8,712,267
Net unrealized appreciation (depreciation) on:
Investment securities 220,061,927
Futures contracts (580,730)
NET ASSETS, for 109,011,478 shares outstanding $ 1,892,254,149
NET ASSET VALUE, offering price and redemption price per share ($1,892,254,149 (divided by) 109,011,478 shares) $17.36
</TABLE>
Statement of Operations
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended February 28, 1994
INVESTMENT INCOME $ 45,639,646
Dividends
Interest (including security lending fees of $18,458) (Note 5) 1,588,733
Total income 47,228,379
EXPENSES
Management fee (Note 4) $ 4,629,801
Transfer agent fees (Note 4) 4,446,394
Accounting fees and expenses (Note 4) 652,621
Non-interested trustees' compensation 10,528
Custodian fees and expenses 113,785
Registration fees 126,966
Audit 52,145
Legal 31,749
Interest (Note 6) 20,894
Miscellaneous 22,883
Total expenses before reductions 10,107,766
Expense reductions (Note 7) (5,496,132) 4,611,634
Net investment income 42,616,745
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
Net realized gain (loss) on:
Investment securities 21,628,382
Futures contracts 5,843,140 27,471,522
Change in net unrealized appreciation (depreciation) on:
Investment securities 58,016,820
Futures contracts (3,074,560) 54,942,260
Net gain (loss) 82,413,782
Net increase (decrease) in net assets resulting from operations $ 125,030,527
</TABLE>
Statement of Changes in Net Assets
DRAFT
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED FOUR MONTH YEAR ENDED
FEBRUARY 28, PERIOD OCTOBER 31, 1992
1994 ENDED
FEBRUARY 28,
1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 42,616,745 $ 14,071,349 $ 33,928,421
Net investment income
Net realized gain (loss) on investments 27,471,522 83,803,720 27,083,520
Change in net unrealized appreciation (depreciation) on investments 54,942,260 (1,004,355) 43,192,633
Net increase (decrease) in net assets resulting from operations 125,030,527 96,870,714 104,204,574
Distributions to shareholders (41,085,662) (12,288,344) (33,222,396)
From net investment income
From net realized gain (23,556,130) - (10,417,240)
Total distributions (64,641,792) (12,288,344) (43,639,636)
Share transactions 1,395,243,466 476,652,352 1,348,834,171
Net proceeds from sales of shares
Reinvestment of distributions from: 38,438,715 11,505,440 30,898,358
Net investment income
Net realized gain 22,506,339 - 9,778,815
Cost of shares redeemed (1,096,425,419) (555,321,881) (955,834,705)
Net increase (decrease) in net assets resulting from share transactions 359,763,101 (67,164,089) 433,676,639
Total increase (decrease) in net assets 420,151,836 17,418,281 494,241,577
NET ASSETS
Beginning of period 1,472,102,313 1,454,684,032 960,442,455
End of period (including undistributed net investment income of $6,424,856,$ 1,892,254,149 $ 1,472,102,313 $ 1,454,684,032
$5,295,132, and $3,512,127, respectively)
OTHER INFORMATION
Shares
Sold 85,203,118 29,370,355 86,843,554
Issued in reinvestment of distributions from: 2,265,160 706,722 2,039,602
Net investment income
Net realized gain 1,332,090 - 687,197
Redeemed (67,776,697) (34,311,255) (61,524,484)
Net increase (decrease) 21,023,671 (4,234,178) 28,045,869
</TABLE>
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED FEBRUARY 28, 1994
20. 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 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. 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 certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Dividend and
interest income is recorded net of foreign taxes where recovery of such
taxes is not assured.
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.
Income and capital gain distributions 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
futures and options transactions, foreign currency transactions,
redemptions in kind, non-taxable dividends and losses due to wash sales.
The fund also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes. Permanent book and tax basis differences relating to
shareholder distributions will result in reclassifications to paid in
capital.
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective March 1,
1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of February 28, 1993 have been reclassified to
reflect an increase in paid in capital of $107,671,644, a decrease in
undistributed net investment income of $372,874 and a decrease in
accumulated net realized gain on investments of $107,298,770.
21. 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 OPTIONS. The fund may invest in futures contracts and
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.
22. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $469,000,980 and $67,817,327, respectively, of which U.S.
government and government agency obligations sales aggregated $4,312,500.
The market value of futures contracts opened and closed amounted to
$236,325,050 and $302,709,855, respectively.
23. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee that
is computed daily at an annual rate of .28% of the fund's average net
assets.
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 AND SECURITY LENDING FEES. Fidelity Service Co. (FSC), 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.
24. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $493,500 and
$507,600, respectively.
25. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $8,817,000 and $3,596,362,
respectively. The weighted average interest rate was 3.62%.
26. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .28% of average net assets. For the
period, the reimbursement reduced the expenses by $5,496,132.
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 Trustees of Fidelity Institutional Trust and the Shareholders of
Fidelity U.S. Equity Index Portfolio:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity U.S. Equity Index Portfolio (a fund of Fidelity Institutional
Trust) at February 28, 1994, the results of its operations for the year
then ended, the changes in its net assets and the financial highlights for
the periods indicated in conformity with generally accepted accounting
principles. These financial statements and financial highlights (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, 1994 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
Boston, Massachusetts
April 19, 1994
DISTRIBUTIONS
The Board of Trustees of Fidelity U.S. Equity Index Portfolio voted to pay
on April 11, 1994, to shareholders of record at the opening of business on
April 8, 1994, a distribution of $.06 derived from capital gains realized
from sales of portfolio securities.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
A PORTFOLIO OF FIDELITY INSTITUTIONAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 2 9 , 1994
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Portfolio's current Prospectus (dated April
2 9 , 1994). Please retain this document for future reference. The
Annual Report for the fiscal year ended February 28, 1994 is incorporated
into the Portfolio's Prospectus. Additional copies of the Portfolio's
Prospectus and Annual Report or the Statement of Additional Information are
available upon request from Fidelity Distributors Corporation, 82
Devonshire Street, Boston, Massachusetts 02109.
For more information or assistance in opening a new account, please call
Client Services:
RETIREMENT PLAN ACCOUNTS
Corporate Clients 800-962-1375
"Not for Profit" Clients 800-343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 800-843-3001
TABLE OF CONTENTS PAGE
Investment Policies and Limitation 2
Portfolio Transactions 8
Valuation of Portfolio Securities 10
Portfolio Performance 10
Additional Purchase and Redemption Information 16
Distributions and Taxes. 16
FMR 17
Trustees and Officers 17
Management Contract 19
Distribution and Service Plan 20
Contracts with Companies Affiliated with FMR 21
Distributors 21
Description of the Trust 22
Financial Statements 23
Investment Manager
Fidelity Management & Research Company (FMR)
Distributor
Fidelity Distributors Corporation (Distributors)
Transfer Agent
Fidelity Investments Institutional Operations Company (FIIOC)
Custodian
Brown Brothers Harriman & Company (Brown Brothers)
UEI-PTB-04/94
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Portfolio's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation shall
be determined immediately after and as a result of the Portfolio's
acquisition of such security or other asset. Accordingly, any subsequent
changes in values, net assets, or other circumstances will not be
considered when determining whether the investment complies with the
Portfolio's investment policies and limitations.
The Portfolio's fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the 1940
Act)) of the Portfolio. However, except for the fundamental investment
limitations set forth below, the investment policies and limitations
described in this Statement of Additional Information are not fundamental
and may be changed without shareholder approval. THE FOLLOWING ARE THE
PORTFOLIO'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY.
THE PORTFOLIO MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, (a) more than 25% of the value of its
total assets would be invested in the securities of a single issuer, or (b)
with respect to 75% of its total assets, more than 5% of the value of its
total assets would be invested in the securities of a single issuer, or (c)
it would own more than 10% of the outstanding voting securities of any
single issuer;
(2) issue bonds or any other class of securities preferred over shares of
the Portfolio in respect of the Portfolio's assets or earnings, provided
that the Portfolio may establish additional series or classes of shares in
accordance with its Declaration of Trust;
(3) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts are not deemed to constitute short sales;
(4) purchase securities on margin, except that the Portfolio may obtain
such short-term credits as are necessary for the clearance of transactions,
and provided that the Portfolio may make initial and variation margin
payments in connection with transactions in futures contracts and options
on futures contracts;
(5) borrow money, except that the Portfolio may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (less liabilities other
than borrowings). Any borrowings that come to exceed 33 1/3% of the value
of the Portfolio's total assets by reason of a decline in net assets will
be reduced within three days to the extent necessary to comply with the 33
1/3% limitation. The Portfolio may not purchase any security while
borrowings representing more than 5% of its net assets are outstanding;
(6) underwrite securities issued by others, except to the extent that the
Portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, more than 25% of the 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;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the Portfolio from purchasing and
selling futures contracts or marketable securities issued by companies or
other entities or investment vehicles that deal in real estate or interests
therein, nor shall this prevent the Portfolio from purchasing interests in
pools of real estate mortgage loans);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the Portfolio from
purchasing and selling futures contracts or marketable securities issued by
companies or other entities); and
(10) lend any security or make any other loan, except (a) through the
purchase of a portion of an issue of debt securities in accordance with its
investment objective, policies, and limitations, or (b) by engaging in
repurchase agreements with respect to portfolio securities, if, as a
result, more than 33 1/3% of the value of its total assets would be lent to
other parties.
Investment limitation (5) is construed in conformity with the 1940 Act,
and, accordingly, "three days" means three days exclusive of Sundays and
holidays;
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
i. The Portfolio does not currently intend to sell securities short.
ii. The Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) by engaging in reverse repurchase
agreements with any party (reverse repurchase agreements are treated as
borrowings for purposes of fundamental investment limitation (5)). The
Portfolio will not borrow from other funds advised by FMR or its affiliates
if total outstanding borrowings immediately after such borrowing would
exceed 15% of the Portfolio's total assets.
iii. The Portfolio does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to legal
or contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
iv. The Portfolio does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 5% of the
Portfolio's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
v. The Portfolio does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
vi. The Portfolio does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
vii. The Portfolio does not currently intend to purchase warrants, valued
at the lower of cost or market, in excess of 5% of the Portfolio's net
assets. Included in that amount, but not to exceed 2% of the Portfolio's
net assets, may be warrants which are not listed on the New York Stock
Exchange or the American Stock Exchange. Warrants acquired by the
Portfolio in units or attached to securities are not subject to these
restrictions.
viii. The Portfolio does not currently intend to invest in oil, gas or
other mineral exploration or development programs or leases.
ix. The Portfolio does not currently intend to purchase the securities of
any issuer if those officers and Trustees of the Trust and those officers
and directors of FMR who individually own more than 1/2 of 1% of the
securities of such issuer together own more than 5% of such issuer's
securities.
x. The Portfolio does not currently intend to purchase puts, calls,
straddles, spreads, and any combination thereof, if by reason thereof the
value of its aggregate investment in such classes of securities will exceed
5% of its total assets.
For the Portfolio's limitations on futures and options transactions, see
the section "Limitations on Futures and Options Transactions" on page 5.
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (the SEC), the Portfolio may engage in
certain transactions with banks that are, or may be considered to be,
"affiliated persons" of the Portfolio under the 1940 Act. Such
transactions may be entered into only pursuant to procedures established
and periodically reviewed by the Board of Trustees. These transactions
may include repurchase agreements with custodian banks; purchases, as
principal, of short-term obligations of and repurchase agreements with the
50 largest U.S. banks (measured by deposits); transactions in municipal
securities; and transactions in U.S. government securities with primary
dealers in these securities.
PORTFOLIO'S RIGHTS AS A SHAREHOLDER. The Portfolio does not intend to
direct or administer the day-to-day operations of any company. The
Portfolio, however, may exercise its rights as a shareholder and may
communicate its views on im portant matters of policy to management, the
board of directors, and shareholders of a company when FMR believes
that such matters could have a significant effect upon the value of the
Portfolio's investment in the company. The activities that the Portfolio
may engage in, either individually or in conjunction with others, may
include, among others, supporting or opposing proposed changes in a
company's corporate structure or business activities; seeking changes in a
company's directors or management; seeking changes in a company's direction
or policies; seeking the sale or reorganization of the company or a portion
of its assets; or supporting or opposing third party takeover efforts.
This area of corporate activity is increasingly prone to litigation, and it
is possible that the Portfolio could be involved in lawsuits related to
such activities. FMR will monitor such activities with a view to
mitigating, to the extent possible, the risk of litigation against the
Portfolio, and the risk of actual liability if the Portfolio is involved in
litigation. No guarantee can be made, however, that litigation against the
Portfolio may not be undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the Portfolio's investments and, through reports from FMR,
the Board monitors investments in illiquid instruments. In determining the
liquidity of the Portfolio's investments, FMR may consider various factors
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features) and (5) the nature of the marketplace for
trades (including the ability to assign or offset the Portfolio's rights
and obligations relating to the investment). Investments currently
considered by the Portfolio to be illiquid include repurchase agreements
not entitling the holder to payment of principal and interest within seven
days, over-the-counter options, and swap agreements determined by FMR to be
illiquid. However, with respect to over-the-counter options the Portfolio
writes, all or a portion of the value of the underlying instrument may be
illiquid depending on the assets held to cover the option and the nature
and terms of any agreement the Portfolio may have to close out the option
before expiration. In the absence of market quotations, illiquid
investments are priced at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets or other circumstances, the Portfolio were in a position
where more than 10% of its net assets were invested in illiquid securities,
it would seek to take appropriate steps to protect liquidity.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio purchases
a security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. The Portfolio may engage in a repurchase agreement with respect
to any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the Portfolio in
connection with bankruptcy proceedings), it is the Portfolio's current
policy to limit repurchase agreement transactions to those parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the
Portfolio sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time.
While a reverse repurchase agreement is outstanding, the Portfolio will
maintain appropriate liquid assets in a segregated custodial account to
cover its obligation under the agreement. The Portfolio will enter into
reverse repurchase agreements only with parties whose creditworthiness is
deemed satisfactory by FMR. Such transactions may increase fluctuations in
the market value of the Portfolio's assets and may be viewed as a form of
leverage.
SECURITIES LENDING. The Portfolio may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the Portfolio to retain ownership of the
securities loaned and, at the same time, to earn additional income. Since
there may be delays in recovery of loaned securities or even a loss of
rights in collateral supplied should the borrower fail financially, loans
will be made only to parties deemed by FMR to be of good standing.
Furthermore, they will only be made if, in the judgment of FMR, the
consideration to be earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC staff that the
Portfolio is permitted to engage in loan transactions only under the
following conditions: (1) the Portfolio must receive at least 100%
collateral in the form of cash or cash equivalents, (e.g., U.S. Treasury
bills or notes) from the borrower; (2) the borrower must increase the
collateral whenever the market value of the securities (determined on a
daily basis) rises above the level of the collateral; (3) the Portfolio
must be able to terminate the loan, after notice, at any time; (4) the
Portfolio must receive reasonable interest on the loan or a flat fee from
the borrower, as well as amounts equivalent to any dividends, interest or
other distributions on the securities loaned and any increase in market
value; (5) the Portfolio may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able to
vote proxies on the securities loaned, either by terminating the loan or by
entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the Portfolio is authorized to invest. Investing this cash subjects
that investment, as well as the security loaned, to market forces (i.e.,
capital appreciation or depreciation).
SWAP AGREEMENTS. Under a typical equity swap agreement, a counterparty
such as a bank or broker-dealer agrees to pay the Portfolio a return equal
to the dividend payments and increase in value, if any, of an index or
group of stocks (such as the Standard & Poor's Daily Stock Price of
500 Common Stocks (the S&P 500 -- a registered trademark of Standard
& Poor's Corporation)), and the Portfolio agrees in return to pay a
fixed or floating rate of interest, plus any declines in value of the
index. Swap agreements can also have features providing for maximum or
minimum exposure to the designated index. Swap agreements can take many
different forms and are known by a variety of names. The Portfolio is not
limited to any particular form of swap agreement if FMR determines it is
consistent with the Portfolio's investment objective and policies.
In order to track the return of the designated index effectively, the
Portfolio would generally have to own other assets returning approximately
the same amount as the interest rate payable by the Portfolio under the
swap agreement. In addition, if the counterparty's creditworthiness
declined, the swap would be likely to decline in value relative to the
designated index, impairing the Portfolio's correlation with the S&P
500. The Portfolio expects to be able to eliminate its exposure under swap
agreements either by assignment or other disposition of the swap agreement,
or by entering into an offsetting swap agreement with the same party or a
similarly creditworthy party.
The Portfolio will maintain appropriate liquid assets in a segregated
custodial account to cover its obligations under swap agreements. If the
Portfolio enters into a swap agreement on a net basis, it will segregate
assets with a daily value at least equal to the excess, if any, of the
Portfolio's accrued obligations under the swap agreement over the accrued
amount the Portfolio is entitled to receive under the agreement. If the
Portfolio enters into a swap agreement on other than a net basis, it will
segregate assets with a value equal to the full amount of the Portfolio's
accrued obligations under the agreement.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Portfolio has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in
the futures markets. The Portfolio intends to comply with Rule 4.5 of
the regulations under the Commodity Exchange Act, which limits the extent
to which the Portfolio can commit assets to initial margin deposits and
options premiums.
FMR also intends to follow certain other limitations on the Portfolio's
futures and options activities. The Portfolio will not purchase any option
if, as a result, more than 5% of its total assets would be invested in
option premiums. Under normal conditions, the Portfolio will not enter
into any futures contract or option if, as a result, the sum of (i) the
current value of assets hedged in the case of strategies involving the sale
of securities, and (ii) the current value of the indices or other
instruments underlying the Portfolio's other futures or options positions,
would exceed 35% of the Portfolio's total assets. These limitations do not
apply to options attached to, or acquired or traded together with their
underlying securities, and do not apply to securities that incorporate
features similar to options.
The above limitations on the Portfolio's investments in futures contracts
and options, and the Portfolio's policies regarding futures contracts and
options discussed elsewhere in this Statement of Additional Information,
may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When the Portfolio purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future
date. When the Portfolio sells a futures contract, it agrees to sell the
underlying instrument at a specified future date. The price at which the
purchase and sale will take place is fixed when the Portfolio enters into
the contract. Some currently available futures contracts are based on
specific securities and some are based on indices of securities prices,
such as the S&P 500. Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the Portfolio's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the Portfolio sells a
futures contract, by contrast, the value of its futures position will tend
to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the Portfolio's investment limitations. In the event of
the bankruptcy of an FCM that holds margin on behalf of the Portfolio, the
Portfolio may be entitled to return of margin owed to it only in proportion
to the amount received by the FCM's other customers, potentially resulting
in losses to the Portfolio.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Portfolio
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the
Portfolio pays the current market price for the option (known as the option
premium). Options have various types of underlying instruments, including
specific securities, indices of securities prices, and futures contracts.
The Portfolio may terminate its position in a put option it has purchased
by allowing it to expire or by exercising the option. If the option is
allowed to expire, the Portfolio will lose the entire premium it paid. If
the Portfolio exercises the option, it completes the sale of the underlying
instrument at the strike price. The Portfolio may also terminate a put
option position by closing it out in the secondary market at its current
price, if a liquid secondary market exists
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the Portfolio writes a put option, it
takes the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the Portfolio assumes the obligation to
pay the strike price for the option's underlying instrument if the other
party to the option chooses to exercise it. When writing an option on a
futures contract, the Portfolio will be required to make margin payments to
an FCM as described above for futures contracts. The Portfolio may seek to
terminate its position in a put option it writes before exercise by closing
out the option in the secondary market at its current price. If the
secondary market is not liquid for a put option the Portfolio has written,
however, the Portfolio must continue to be prepared to pay the strike price
while the option is outstanding, regardless of price changes, and must
continue to set aside assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the Portfolio to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options are
similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the effects
of a price decline. At the same time, because a call writer must be
prepared to deliver the underlying instrument in return for the strike
price, even if its current value is greater, a call writer gives up some
ability to participate in security price increases.
COMBINED POSITIONS. The Portfolio may purchase and write options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the overall
position. For example, the Portfolio may purchase a put option and write a
call option on the same underlying instrument, in order to construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call option
at a lower price, in order to reduce the risk of the written call option in
the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction costs
and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Most stock index futures and options are
based on broad-based stock indices reflecting the prices of a broad variety
of common stocks, such as the S&P 500. Some index options are based on
narrow industry averages or market segments. FMR expects that the
Portfolio's futures and options transactions will typically involve the
S&P 500. Since the value of index futures and options depends
primarily on the value of their underlying indices, the performance of
broad-based contracts will generally reflect broad changes in common stock
prices. The Portfolio, however, can invest in many different types of
securities, including securities that are not included in the underlying
indices of the index futures and options available to the Portfolio. In
addition, the Portfolio's investments may be more or less heavily weighted
in securities of particular types of issuers, or securities of issuers in
particular industries, than the indices underlying its index futures or
options positions. Therefore, while the Portfolio's index futures and
options positions should provide exposure to changes in value of the
underlying indices (or protection against declines in their value in the
case of hedging transactions), it is likely that, in the case of hedging
transactions, the price changes of the Portfolio's index futures and
options positions will not match the price changes of the Portfolio's other
investments.
Options and futures prices can diverge from the prices of their underlying
instruments, even if the underlying instruments match the Portfolio's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Portfolio may
purchase or sell options and futures contracts with a greater or lesser
value than the securities it wishes to hedge or intends to purchase in
order to attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in all
cases. If price changes in the Portfolio's options or futures positions
are poorly correlated with its other investments, the positions may fail to
produce anticipated gains or result in losses that are not offset by gains
in other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the
Portfolio to enter into new positions or close out existing positions. If
the secondary market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require the Portfolio to
continue to hold a position until delivery or expiration regardless of
changes in its value. As a result, the Portfolio's access to other assets
held to cover its options or futures positions could also be impaired.
OVER-THE-COUNTER OPTIONS. Unlike exchange-traded options, which are
standardized with respect to the underlying instrument, expiration date,
contract size, and strike price, the terms of over-the-counter (OTC)
options (options not traded on exchanges) generally are established
through negotiation with the other party to the option contract. While
this type of arrangement allows the Portfolio greater flexibility to tailor
an option to its needs, OTC options generally involve greater credit risk
than exchange-traded options, which are guaranteed by the clearing
organization of the exchanges where they are traded.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Portfolio will
comply with guidelines established by the SEC with respect to coverage of
options and futures strategies by mutual funds, and, if the guidelines so
require, will set aside appropriate liquid assets in a segregated custodial
account in the amount prescribed. Securities held in a segregated account
cannot be sold while the futures or option strategy is outstanding, unless
they are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Portfolio's
assets could impede portfolio management or the Portfolio's ability to meet
redemption requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Portfolio by FMR pursuant to authority contained in the
Management Contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR will
consider various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses.
FMR may allocate brokerage transactions to broker-dealers who have
entered into arrangements with FMR under which the broker-dealer allocates
a portion of the commissions paid by the fund toward payment of the fund's
expenses, such as transfer agent fees or custodian fees. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.
The Portfolio may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolio and other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based upon
the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolio may be useful to FMR in rendering investment
management services to the Portfolio and/or its other clients, and
conversely, research provided by brokers or dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolio. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR tried to develop comparable information through its own
efforts.
Subject to applicable limitations of federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Portfolio to pay such higher commissions, FMR must determine in good
faith that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolio and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by, and to place
portfolio transactions with, brokerage firms that have provided assistance
in the distribution of shares of the Portfolio or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with FBSI and Fidelity Brokerage
Services, Ltd. (FBSL), subsidiaries of FMR Corp., if the commissions are
fair, reasonable and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from execut ing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC
rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolio and review the commissions paid by the Portfolio over
representative periods of time to determine if they are reasonable in
relation to the benefits to the Portfolio.
For the fiscal year ended February 28, 1994, and the period November 1,
1992 through February 28, 1993, the Portfo lio's turnover rate was 4%
and 28% (annualized), respectively.
For the fiscal year ending February 28, 1994, the period November 1,
1992 through February 28, 1993 and for the fiscal year ended October 31,
1992, the Portfolio paid brokerage commissions of $93,755, $55,413 and
$171,172, respectively. For the fiscal year ended February 28, 1994, the
period November 1, 1992 through February 28, 1993 and for the fiscal year
ended October 31, 1992, the Portfolio paid approximately 11.6%, 0% and 2%,
respectively, of commissions to brokerage firms which provided research
services, although the providing of such services was not necessarily a
factor in the placement of all of the business with such firms. For the
fiscal year ended February 28, 1994, the period November 1, 1992 through
February 28, 1993 and for the fiscal year ended October 31, 1992, the
Portfolio paid brokerage commissions of $0, $0 and $120, respectively, to
FBSI. This amounted to 0%, 0% and .07% of the aggregate brokerage
commissions paid for transactions involving 0%, 0% and .10% of the
aggregate dollar amount of transactions in which the Portfolio paid
brokerage commissions.
From time to time the Trustees review whether the recapture for the benefit
of the Portfolio of some portion of the brokerage commissions or similar
fees paid by the Portfolio on transactions is legally permissible and
advisable. The Portfolio seeks to recapture soliciting broker-dealer fees
on the tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for the Portfolio to seek such recapture.
Although the Trustees and officers of the Trust are substantially the same
as those of other funds managed by FMR, investment decisions for the
Portfolio are made independently from those of other funds or portfolios
managed by FMR or accounts managed by FMR affiliates. It sometimes happens
that the same security is held in the portfolio of more than one of these
accounts. Simultaneous transactions are inevitable when several portfolios
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or volume of the security as far as the Portfolio is
concerned. In other cases, however, the ability of the Portfolio to
participate in volume transactions will produce better executions and
prices for the Portfolio. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Equity securities for
which the primary market is the U.S. are valued at last sale price or, if
no sale has occurred, at the closing bid price. Equity securities for
which the primary market is outside the U.S. are valued using the official
closing price or the last sale price in the principal market where they are
traded. If the last sale price (on the local exchange) is unavailable, the
last evaluated quote or last bid price is normally used. Short-term
securities are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. Fixed-income
securities are valued primarily by a pricing service that uses a vendor
security valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. This twofold
approach is believed to more accurately reflect fair value because it takes
into account appropriate factors such as institutional trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics, and other market data, without exclusive reliance
upon quoted, exchange, or over-the-counter prices. Use of pricing services
has been approved by the Board of Trustees.
Securities and other assets for which there is no readily available
market are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as
well as corporate bonds, U.S. government securities, money market
instruments, and repurchase agreements, is substantially completed each day
at the close of the NYSE. The values of any such securities held by the
fund are determined as of such time for the purpose of computing the fund's
net asset value. Foreign security prices are furnished by independent
brokers or quotation services which express the value of securities in
their local currency. Service gathers all exchange rates daily at the
close of the NYSE using the last quoted price on the local currency and
then translates the value of foreign securities from their local currency
into U.S. dollars. Any changes in the value of forward contracts due to
exchange rate fluctuations and days to maturity are included in the
calculation of net asset value. If an extraordinary event that is expected
to materially affect the value of a portfolio security occurs after the
close of an exchange on which that security is traded, then the security
will be valued as determined in good faith by a committee appointed by the
Board of Trustees.
PORTFOLIO PERFORMANCE
The Portfolio may quote its performance in various ways. All performance
information supplied by the Portfolio in advertising is historical and is
not intended to indicate future returns. The Portfolio's share price yield
and total returns fluctuate in response to market conditions and other
factors, and the value of Portfolio shares when redeemed may be more or
less than their original cost.
YIELD CALCULATIONS. Yields for the Portfolio used in advertising are
computed by dividing the Portfolio's interest and dividend income for a
given 30-day or one month period, net of expenses, by the average number of
shares entitled to receive distributions during the period, dividing this
figure by the Portfolio's net asset value per share (NAV) at the end of the
period and annualizing the result (assuming compounding) in order to arrive
at an annual percentage rate. Income is calculated for purposes of yield
quotations in accordance with standardized methods applicable to all stock
and bond funds. Dividends from equity investments are treated as if they
were accrued on a daily basis, solely for the purposes of yield
calculations. In general, interest income is reduced with respect to bonds
trading at a premium over their par value by subtracting a portion of the
premium from income on a daily basis, and is increased with respect to
bonds trading at a discount by adding a portion of the discount to daily
income. Capital gains and losses generally are excluded from the
calculation. The Portfolio may also quote its distribution rate, which
expresses the historical amount of income dividends paid by the Portfolio
as a percentage of the Portfolio's share price. Income calculated for the
purposes of determining the Portfolio's yield differs from income as
determined for other accounting purposes. Because of the different
accounting methods used, and because of the compounding assumed in yield
calculations, the yield quoted for the Portfolio may differ from the rate
of distributions the Portfolio paid over the same period or the rate of
income reported in the Portfolio's fina ncial statements.
TOTAL RETURN CALCULATIONS. TOTAL RETURNS quoted in advertising reflect all
aspects of the Portfolio's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the Portfolio's
net asset value per share (NAV) over the period. AVERAGE ANNUAL TOTAL
RETURNS are calculated by determining the growth or decline in value of
a hypothetical historical investment in the Portfolio over a stated
period, and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline in
value had been constant over the period. For example, a cumulative
return of 100% over ten years would produce an average annual total return
of 7.18%, which is the steady annual rate that would equal 100% growth on a
compounded basis in ten years. While average annual total returns are a
convenient means of comparing investment alternatives, investors should
realize that the Portfolio's performance is not constant over time, but
changes from year to year, and that average annual total returns
represent averaged figures as opposed to the actual year-to-year
performance of the Portfolio.
In addition to average annual total returns, the Portfolio may quote
unaveraged or CUMULATIVE TOTAL RETURNS reflec ting the simple change in
value of an investment over a stated period. Average annual and cumulative
total returns may be quoted as a percentage or as a dollar amount, and may
be calculated for a single investment, a series of investments, and/or a
series of redemptions, over any time period. Total returns may be broken
down into their components of income and capital (including capital gains
and changes in share price) in order to illustrate the relationship of
these factors and their contributions to total return. An example of this
type of illustration is given below. Total returns and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL PORTFOLIO RESULTS. The following chart shows the income and
capital elements of the Portfolio's total return from February 17, 1988,
the date it commenced operations, until February 28, 1994. The chart
compares the Portfo lio's returns to the record of the S&P 500, the
Dow Jones Industrial Average (the Dow or DJIA) and the Cost of Living
expenses over the same period. The comparison to the S&P 500 shows the
Portfolio's total return compared to the record of a broad average of U.S.
common stocks. Figures for the S&P 500 are based on the prices of
unmanaged stocks and include dividends reinvested, and, unlike the
Portfolio's returns, its returns do not include the effect of paying
brokerage commissions and other costs of investing.
During the period February 17, 1988 (commencement of operations) through
February 28, 1994, a hypothetical $100,000 investment in Fidelity U.S.
Equity Index Portfolio would have grown to $215,085 assuming all dividends
and capital gains were reinvested. This was a period of widely
fluctuating stock prices and should not necessarily be considered a
representation of the income or capital gain or loss which may be realized
by an investment in the Portfolio today.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
Value of Value of
Initial Value of Reinvested
Period $100,000 Reinvested Cap. Gain Total Cost of
Ended Investment Dividends Distributions Value S&P DJIA Living **
2/29/88* $103,400 $0 $0 $103,400 $103,287 $103,412 $100,000
2/28/89 112,100 2,922 216 115,238 115,563 116,853 104,828
2/28/90 127,300 7,698 1,675 136,673 137,413 141,143 110,345
2/28/91 140,300 13,768 1,846 155,914 157,543 160,886 116,207
2/28/92 155,800 20,536 4,037 180,374 182,762 188,314 119,483
2/28/93 167,300 27,410 4,335 199,046 202,263 200,105 123,362
2/28/94 173,600 33,878 7,608 215,085 219,112 233,887
126,466
* From commencement of operations 2/17/88.
** From month end closest to initial investment date.
EXPLANATORY NOTES: With an initial investment of $100,000 made on February
17, 1988, the net amount invested in Portfolio shares was $100,000. The
cost of the initial investment ($100,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (that is, their cash value at the time they were rein vested),
amounted to $133,561. If distributions had not been reinvested, the amount
of distributions earned from the Portfolio over time would have been
smaller, and the cash payments for the period would have amounted to
$24,300 for income dividends and $5,700 for capital gain distributions.
Tax consequences of different investments have not been factored into the
above figures.
From time to time, the Portfolio may quote its performance in advertising
and other types of literature as compared to the performance of the S&P
500 Index. The S&P 500 is an unmanaged index of common stock prices.
The performance of the S&P 500 is based on changes in the prices of
stocks composing the S&P 500 and assumes the reinvestment of all
dividends paid on such stocks. Taxes, brokerage commissions and other fees
are disregarded in computing the level of the S&P 500.
PERFORMANCE COMPARISONS. The Portfolio's performance may be compared
to the performance of other mutual funds in general, or to the performance
of particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey which monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. In addition to the mutual fund
rankings, the Portfolio's performance may be compared to mutual fund
performance indices prepared by Lipper.
From time to time, in reports and promotional literature, the
Portfolio's performance also may be compared to other mutual funds tracked
by financial or business publications and periodicals. For example, the
Portfolio may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds
on the basis of risk-adjusted performance. In addition, the Portfolio may
quote financial or business publications and periodicals as they relate to
Portfolio management, investment philosophy, and investment techniques.
Rankings that compare the performance of Fidelity funds to one another in
appropriate categories over specific periods of time may also be quoted in
advertising.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index
(CPI)), and combinations of various capital markets. The performance of
these capital markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order
to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to
those of the funds. Ibbotson calculates total returns in the same method
as the funds. The funds may also compare performance to that of other
compilations or indices that may be developed and made available in the
future.
The Portfolio may quote its performance in advertising and other types of
literature as compared to certificates of deposit (CDs), bank-issued money
market instruments and money market mutual funds. Unlike CDs and money
market instruments, money market mutual funds and the Portfolio are not
insured by the FDIC.
The Portfolio also may compare its performance to that of the S&P 500,
the DJIA, and the NASDAQ Composite Index (NASDAQ). The S&P 500 and the
Dow are widely recognized, unmanaged indices of common stock prices. The
performance of the S&P 500 and DJIA is based on changes in the prices
of stocks comprising the indices and assumes the reinvestment of all
dividends paid on such stocks. Taxes, brokerage commissions and other fees
are disregarded in computing the level of the S&P 500, Dow, and NASDAQ
indices. The Portfolio's performance also may be compared to the increase
in the cost of living as measured by the CPI.
The performance indicators discussed above may include securities that are
not eligible for purchase by the Portfolio. The Portfolio may compare its
performance to that of other compilations or indices of comparable quality
to those listed above which may be developed and made available in the
future.
The table below shows the performance of the S&P 500 for the ten years
from 1984 through 1993. Stock prices fluctuated widely during the periods
shown and were higher at the end than at the beginning. The results shown
should not be considered as a representation of the income yield or capital
gain or loss which may be generated by the S&P 500 in the future.
STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
PRICE CHANGE
YEAR-END IN INDEX DIVIDEND
YEAR INDEX VALUE* FOR YEAR REINVESTMENT TOTAL RETURN
1993 466.45 +7.06 +3.02 +10.08
1992 435.71 +4.46 + 3.16 + 7.62
1991 417.09 +26.31 +4.16 +30.47
1990 330.22 -6.56 +3.46 -3.10
1989 353.40 +27.25 +4.44 +31.69
1988 277.72 +12.40 +4.21 +16.61
1987 247.08 +2.03 +3.07 +5.10
1986 242.17 +14.62 +3.94 +18.56
1985 211.28 +26.33 +5.24 +31.57
1984 167.24 +1.40 +4.70 +6.10
*Source: Standard & Poor's Ratings Group. Total returns for the
S&P 500 show the change in share price of the S&P 500 stocks and
assume reinvestment of all dividends paid by the S&P 500 stocks.
As of March 31, 1994, FMR managed over $140 billion in equity fund
assets. From time to time, the portfolio may compare FMR's equity
assets under management to that of other investment advisers.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund
shareholders.
The Portfolio may present its fund number, Quotron number, CUSIP number,
and discuss or quote its current portfolio manager.
VOLATILITY. The Portfolio may quote various measures of volatility and
benchmark correlation in advertising. In addition, the Portfolio may
compare these measures to those of other funds. Measures of volatility
seek to compare the Portfolio's historical share price fluctuations or
total returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.
NET ASSET VALUE. Charts and graphs using the Portfolio's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the
Portfolio and reflects all elements of its return. Unless otherwise
indicated, the Portfolio's adjusted NAVs are not adjusted for sales
charges, if any. In addition to adjusted NAVs, unadjusted closing NAVs may
be used to show the closing price of the Portfolio's share on a particular
day or series of days.
The Portfolio's adjusted NAVs are calculated using an adjustment factor
that is calculated for every business day over the time period in question
on which the Portfolio was priced. The factor for any given day may be
derived by adding the Portfolio's distributions which went ex-distribution
on the following day, dividing by the NAV on the following day, adding one,
and multiplying by the factor of the following day. By convention, the
factor on the last day of the time period is set to equal one; so that the
Portfolio's adjusted NAV on that day is the same as its NAV. On February
28, 1994 the adjusted NAV was $17.26.
MOVING AVERAGES. The Portfolio may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving average
is the average of each day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine adjusted closing NAVs from the
last business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above or
below its moving average.
MOMENTUM INDICATORS may be used to indicate the Portfolio's price
movements over specific periods of time. Each point on the momentum
indicator represents the fund's percentage change in price movements over
that period. For exa mple, a five-week momentum indicator may be
calculated for each week using the closing adjusted NAV for the last
business day of that week and the five weeks prior to it. In short, the
Portfolio's five week momentum indicator is the Portfolio's five week
cumulative total return.
The Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, the investor invests a fixed dollar amount in the Portfolio at
periodic intervals, thereby purchasing fewer shares when prices are high
and more shares when prices are low. While such a strategy does not assure
a profit nor guard against loss in a declining market, the investor's
average cost per share can be lower than if fixed numbers of shares had
been purchased at the same intervals. In evaluating such a plan, investors
should consider their ability to continue purchasing shares through periods
of low price levels.
The Portfolio may be available for purchase through retirement plans or
other programs offering deferral of or exemption from income taxes, which
may produce superior after-tax returns over time. For example, an initial
$1,000 investment earning a taxable return of 10% annually would have an
after-tax value of $1,949 after ten years, assuming tax was deducted from
the return each year at a 31% rate. An equivalent tax-deferred investment
would have an after-tax value of $2,100 after ten years, assuming tax was
deducted at a 31% rate from the tax-deferred earnings at the end of the ten
year period.
TRADITION OF PERFORMANCE. Fidelity's tradition of performance is achieved
through:
Money Management: a proud tradition of money management motivated by the
expectation of excellence backed by solid analysis and worldwide resources.
Fidelity employs a bottom-up approach to security selection based upon
in-depth analysis of the fundamentals of that investment opportunity.
Innovation: constant attention to the changing needs of today's investors
and vigilance to the opportunities that arise from changing global markets.
Research is central to Fidelity's investment decision-making process.
Fidelity's greatest resource--over 200 skilled investment professionals--is
supported with the most sophisticated technology available.
Fidelity provides:
- - Global research resources: an opportunity to diversify portfolios and
share in the growth of markets outside the United States.
- - In-house, proprietary bond-rating system, constantly updated, which
provides extremely sensitive credit analysis.
- - Comprehensive chart room with over 1500 exhibits to provide sophisticated
charting of worldwide economic, financial, and technical indicators, as
well as to provide tracking of over 800 individual stocks for portfolio
managers.
- - State-of-the-art trading desk, with access to over 200 brokerage houses,
providing real-time information to achieve the best executions and optimize
the value of each transaction.
- - Use of extensive on-line computer-based research services.
Service: Timely, accurate and complete reporting. Prompt and expert
attention when an investor or an investment professional needs it.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the Portfolio's NAV. Shareholders receiving any such securities
or other property on redemption may realize either a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, the Portfolio is
required to give shareholders at least 60 days' notice prior to terminating
or modifying its exchange privilege. Under the Rule, the 60-day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) the Portfolio suspends the redemption of the shares to
be exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the Portfolio to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
The Portfolio has notified shareholders that it reserves the right at any
time, without prior notice, to refuse exchange purchases by any person or
group if, in FMR's judgment, the fund would be unable to invest effectively
in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of the Portfolio's income may qualify for the
dividends received deduction available to corporate shareholders to the
extent that the Portfolio's income is derived from qualifying dividends.
Because the Portfolio also may earn other types of income, such as
interest, income from securities loans, non-qualifying dividends and
short-term capital gains, the percentage of the dividend that qualifies for
the deduction generally will be less than 100%.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the
Portfolio on the sale of securities and distributed to shareholders are
federally taxable as long-term capital gains regardless of the length of
time that shareholders have held their shares. If a shareholder receives a
long-term capital gain distribution on shares of the Portfolio and such
shares are held less than six months and are sold at a loss, the portion of
the loss equal to the amount of the long-term capital gain distribution
will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by the Portfolio are federally taxable
to shareholders as dividends, not as capital gains. Distributions from the
short-term capital gains do not qualify for the dividends received
deduction.
TAX STATUS OF THE PORTFOLIO. The Portfolio has qualified and intends to
continue to qualify as a "regulated investment company" for tax purposes,
so that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In addition, the Portfolio intends to
distribute substantially all of its net investment income and realized
capital gains to avoid federal excise taxes. The Portfolio also intends to
comply with other tax rules applicable to regulated investment companies,
including a requirement that capital gains from selling securities held for
less than three months must constitute less than 30% of the Portfolio's
gross income for each fiscal year. Gains from some forward currency
contracts, futures contracts, and options are included in this 30%
calculation, which may limit the Portfolio's investments in such
instruments. The extent to which the Portfolio may engage in short-term
trading in options on indices, futures contracts and options on futures may
be limited by this 30% test.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders of the
Portfolio may be subject to state and local taxes on distributions received
from the Portfolio. Investors should consult their tax advisors to
determine whether the Portfolio is suitable to their particular tax
situation.
FUTURES CONTRACTS AND RELATED OPTIONS ON STOCK INDEX FUTURES. Accounting
for futures contracts will be in accordance with generally accepted
accounting principles. Gain or loss on closing out a futures contract or
related option generally will be treated as 60% long term capital gain or
loss and 40% short term capital gain or loss for tax purposes. Futures
contracts held by the Portfolio at the end of each fiscal year will be
required to be "marked to market" for federal income tax purposes. That
is, they will be treated as having been sold at market value on the last
day of the year, with any resulting gain or loss taxed as described above.
If a futures contract or related option is deemed to be part of a
"straddle" composed of two or more offsetting positions in personal
property, the Portfolio may be required to defer recognition of a loss from
disposition of the futures contract or option to the extent that the loss
is offset by unrealized gains in another part of the straddle.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions: Fidelity Service Co. (Service)
, which is the transfer and shareholder servicing agent for certain of the
funds advised by FMR; FIIOC, which performs shareholder servicing functions
for certain institutional customers, and Fidelity Investments Retail
Marketing Company, which provides marketing services to various companies
within the Fidelity organization.
Several affiliates of FMR also are engaged in the investment advisory
business. Fidelity Management Trust Company (FMTC) provides trustee,
investment advisory and administrative services to retirement plans and
corporate employee benefit accounts. Fidelity Management & Research
(U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East)
Inc. (FMR Far East), both wholly owned subsidiaries of FMR formed in 1986,
supply investment research, and may supply portfolio management services,
to FMR in connection with certain funds advised by FMR. Analysts employed
by FMR, FMR U.K. and FMR Far East research and visit thousands of domestic
and foreign companies each year. FMR Texas Inc. (FMR Texas), a wholly
owned subsidiary of FMR formed in 1989, supplies portfolio management and
research services in connection with certain money market funds advised by
FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. The Trustees who are interested persons (as defined in the
Investment Company Act of 1940) by virtue of their affiliation with either
the Trust or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994,
he was President of Greenhill Petroleum Corporation (petroleum exploration
and production, 1990). Before retiring in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989), Sanifill Corporation (non-hazardous
waste, 1993) and CH2M Hill Companies (engineering). In addition, he served
on the Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as
a Trustee of First Union Real Estate Investments; Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), the National Arts Stabilization Fund, Greenwich
Hospital Association, and Valuation Research Corp. (appraisals and
valuations, 1993).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of
FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
retirement program under which they receive payments during their lifetime
fromt he fund based on their basic trustee fees and length of service.
Currently, Messrs. Robert L. Johnson, William R. Spaulding, Bertram H.
Witham, and David L. Yunich participate in the program.
On February 28, 1994, the Trustees and officers of the Portfolio owned in
the aggregate less than 1% of the Portfolio's outstanding shares.
MANAGEMENT CONTRACT
The Portfolio employs FMR to furnish investment advisory and other
services. Under its Management Contract with the Portfolio, FMR acts as
investment adviser and, subject to the supervision of the Board of
Trustees, directs the investments of the Portfolio in accordance with its
investment objective, policies, and limitations. FMR also provides the
Portfolio with all necessary office facilities and personnel for servicing
the Portfolio's investments and compensates all officers of the Trust, all
Trustees who are "interested persons" of the Trust or FMR, and all
personnel of the Trust or FMR performing services relating to research,
statistical and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provides the management and administrative services necessary
for the operation of the Portfolio. These services include providing
facilities for maintaining the Portfolio's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters, and other persons dealing with the Portfolio; preparing all
general shareholder communications and conducting shareholder relations;
maintaining the Portfolio's records and the registration of the Portfolio's
shares under federal and state law, developing management and shareholder
services for the Portfolio; and furnishing reports, evaluations and
analyses on a variety of subjects to the Board of Trustees.
FMR is the Portfolio's manager pursuant to a management contract dated
January 13, 1988 and approved by the Portfolio's shareholders on October
19, 1988. The Portfolio pays a monthly management fee to FMR for the
services provided under this contract at the annual rate of .28% of the
average net assets of the Portfolio as determined as of the close of
business on each day throughout the month. The management fee for the
fiscal year ended February 28, 1994, the period November 1, 1992 through
February 28, 1993, and for the fiscal year ended October 31, 1992 (before
reimbursement of expenses) amounted to $4,629,801, $1,334,064, and
$3,414,778, respectively.
In addition to the management fee payable to FMR and the fees payable to
Service and FIIOC, and subject to the reimbursement provision described
below, the Portfolio pays all its expenses, without limitation, that are
not assumed by those parties. The Portfolio pays for the typesetting,
printing and mailing of prospectuses, statements of additional information,
and proxy material to shareholders, and for legal expenses and the fees of
the custodian, auditor and non-interested Trustees. Although the
Portfolio's current Management Contract provides that the Portfolio will
pay for the typesetting, printing and mailing of prospectuses, statements
of additional information and notices and reports to existing shareholders,
the Portfolio entered into a revised Transfer Agent Agreement with FIIOC
effective June 1, 1989, pursuant to which FIIOC will now bear the cost of
providing these services to shareholders of the Portfolio. Other charges
paid by the Portfolio include: interest, taxes, brokerage commissions, the
Portfolio's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under federal
and state securities laws. The Portfolio is also liable for such
nonrecurring expenses as may arise, including costs of litigation to which
the Portfolio is a party and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
FMR may, from time to time, agree to voluntarily reimburse the Portfolio
for expenses above a specified percentage of average net assets. FMR
retains the ability to be repaid for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the fiscal
year.
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 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. For the fiscal year ended
February 28, 1994, the period November 1, 1992 through February 28, 1993,
and for the fiscal year ended October 31, 1992, the aggregate operating
expenses reimbursed amounted to $5,496,132, $1,813,056, and $4,427,985,
respectively.
To comply with the California Code of Regulations, FMR will reimburse the
Portfolio if and to the extent that the Portfolio's aggregate annual
operating expenses exceed specified percentages of its average net assets.
The applicable percentages are 2 1/2% of the first $30 million, 2% of the
next $70 million, and 1 1/2% of average net assets in excess of $100
million. When calculating the Portfolio's expenses for purposes of this
regulation, the Portfolio may exclude interest, taxes, brokerage
commissions, and extraordinary expenses, as well as a portion of its
distribution plan expenses.
DISTRIBUTION AND SERVICE PLAN
The Portfolio has adopted a Distribution and Service Plan (the Plan)
pursuant to Rule 12b-1 under the 1940 Act (the Rule). The Plan has been
approved by the Board of Trustees and also by the Portfolio's shareholders
at a special meeting held on October 19, 1988. The Rule provides in
substance that a mutual fund may not engage directly or indirectly in
financing any activity that is primarily intended to result in the sale of
shares of the Portfolio except pursuant to a plan adopted by the Portfolio
under the Rule. The Board of Trustees has adopted the Plan to allow the
Portfolio and FMR to incur certain expenses that might be considered to
constitute indirect payment by the Portfolio of distribution expenses.
Under the Plan, if payment by the Portfolio to FMR of management fees
should be deemed to be indirect financing by the Portfolio of the
distribution of their shares, such payment is authorized by the Plan.
The Plan specifically recognizes that FMR, either directly or through
Distributors, may use its management fee revenue, past profits or other
resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Portfolio.
In addition, the Plan provides that FMR may use its resources, including
its management fee revenues, to make payments to third parties that provide
assistance in selling shares of the Portfolio or to third parties,
including banks, that render shareholder support services.
As required by the Rule, the Trustees carefully considered all pertinent
factors relating to the implementation of the Plan prior to its approval,
and have determined that there is a reasonable likelihood that the Plan
will benefit the Portfolio and its shareholders. In particular, the
Trustees noted that the Plan does not authorize payments by the Portfolio
other than those made to FMR under the Management Contract with the
Portfolio. To the extent that the Plan gives FMR and Distributors greater
flexibility in connection with the distribution of shares of the Portfolio,
additional sales of the Portfolio's shares may result. Additionally,
certain shareholder support services may be provided more effectively under
the Plan by local entities with whom shareholders have other relationships.
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 clearly defined, in Distributors' opinion
it should not prohibit a bank from being paid for shareholder support
services and recordkeeping functions. Distributors intends to engage banks
only to perform such functions. However, changes in federal or state
statutes and regulations pertaining to the permissible activities of banks
and their affiliates or subsidiaries, as well as further judicial or
administrative decisions or interpretations, could prevent a bank from
continuing to perform all or a part of the contemplated services. If a
bank were prohibited from so acting, the Trustees would consider what
actions, if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the operation of
the Portfolio might occur, including possible termination of any automatic
investment or redemption or other services then provided by the bank. It
is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. In addition, state
securities laws on this issue may differ from the opinions expressed
herein, and in some states, banks and other financial institutions may be
required to register as dealers. The Portfolio may execute portfolio
transactions with and purchase securities issued by depository institutions
that receive payments under the Plan. No preference will be shown in the
selection of investments for the instruments of such depository
institutions.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FIIOC, 82 Devonshire Street, Boston, Massachusetts 02109, is transfer,
dividend disbursing and shareholders' serv icing agent for the Portfolio
and maintains its shareholder records. In addition to providing transfer
agent and shareholder servicing functions, FIIOC will pay all transfer
agent out-of-pocket expenses and for typesetting, printing and mailing
prospectuses, statements of additional information, reports, notices and
statements of all related accounts.
Effective January 1, 1993, FIIOC is paid a per account fee of $95 and a
monetary transaction fee of $20 or $17.50 depending on the nature of the
services provided. From June 1, 1990 through December 31, 1992, FIIOC was
paid a per account fee and a monetary transaction fee of $65 and $14, or
$60 and $12, respectively. Prior to June 1, 1990, FIIOC was paid a per
account fee and a monetary transaction fee of $40 and $11.50, respectively,
or $25 and $5, respectively. Fees for certain institutional retirement
plan accounts are based on the net asset value of all such accounts in the
Portfolio.
Fees and out-of-pocket expenses paid to FIIOC during the fiscal year
ended February 28, 1994, the period November 1, 1992 through February 28,
1993 and for the fiscal year ended October 31, 1992, amounted to
$4,446,394, $1,470,539, and $3,446,657, respectively.
Fidelity Institutional Trust has an agreement with Service under which
Service performs the calculations necessary to determine the
Portfolio's NAV and dividends and maintains the Portfolio's accounting
records. Prior to July 1, 1991, the annual fee for these pricing and
bookkeeping services was based on two schedules, one pertaining to the
Portfolio's average net assets, and one pertaining to the type and number
of transactions the Portfolio made. The fee rates in effect as of July 1,
1991 are based on the Portfolio's average net assets, specifically, .06%
for the first $500 million of average net assets and .03% for average net
assets in excess of $500 million. The fee is limited to a minimum of
$45,000 and a maxi mum of $750,000 per year. For the fiscal year ended
February 28, 1994, the period November 1, 1992 through February 28, 1993,
and for the fiscal year ended October 31, 1992, the fees paid to Service
for pricing and bookkeeping services (including related out-of-pocket
expenses) and the Portfolio's securities lending program were $652,621,
$200,809, and $525,623, respectively.
Service also receives fees for administering the Portfolio's securities
lending program. Securities lending fees are based on the number and
duration of individual securities loans. For the fiscal year ended
February 28, 1994, $1,815 in fees were paid to Service. For the period
November 1, 1992 through February 28, 1993, and the fiscal year ended
October 31, 1992, no fees were paid to Service for securities lending
services.
DISTRIBUTORS
The Portfolio has a Distribution Agreement with Distributors, a
Massachusetts corporation organized July 18, 1960. Distributors is a
broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. The
Distribution Agreement calls for Distributors to use all reasonable
efforts, consistent with its other business, to secure purchasers for
shares of the Portfolio, which are continuously offered. Promotional and
administrative expenses in connection with the offer and sale of shares are
paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity U.S. Equity Index Portfolio is a portfolio of
Fidelity Institutional Trust (the Trust), an open-end management investment
company. Currently, there are two portfolios of the Trust: Fidelity U.S.
Equity Index and Fidelity U.S. Bond Index. The Declaration of Trust
permits the Trustees to create additional portfolios.
In the event that FMR ceases to be the investment adviser to the Trust or
Portfolio, the right of the Trust or Portfolio to use the identifying name
"Fidelity" may be withdrawn.
The assets of the Trust received for the issue or sale of shares of each
portfolio and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such
portfolio, and constitute the underlying assets of such portfolio. The
underlying assets of each portfolio are segregated on the books of account,
and are to be charged with the liabilities with respect to such portfolio
and with a share of the general expenses of the Trust. Expenses with
respect to the Trust are to be allocated in proportion to the asset value
of the respective portfolios, except where allocations of direct expense
can otherwise be fairly made. The officers of the Trust, subject to the
general supervision of the Board of Trustees, have the power to determine
which expenses are allocable to a given portfolio, or which are general or
allocable to all of the portfolios. In the event of the dissolution or
liquidation of the Trust, shareholders of each portfolio are entitled to
receive as a class the underlying assets of such portfolio available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the Trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
Trust or the Trustees include a provision limiting the obligations created
thereby to the Trust and its assets. The Declaration of Trust provides for
indemnification out of each portfolio's property of any shareholder held
personally liable for the obligations of the portfolio. The Declaration of
Trust also provides that each portfolio shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation
of the portfolio and satisfy any judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which a portfolio itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they
have exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each portfolio's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the Trust or a portfolio
may, as set forth in the Declaration of Trust, call meetings of the Trust
or a portfolio for any purpose related to the Trust or portfolio, as the
case may be, including, in the case of a meeting of the entire Trust, the
purpose of voting on removal of one or more Trustees. The Trust or any
portfolio may be terminated upon the sale of its assets to another open-end
management investment company, or upon liquidation and distribution of its
assets, if approved by vote of the holders of a majority of the outstanding
shares of the Trust or the portfolio. If not so terminated, the Trust and
its portfolios will continue indefinitely.
CUSTODIAN. Brown Brothers, 40 Water Street, Boston, Massachusetts, is
custodian of the assets of the Portfolio. The custodian is responsible for
the safekeeping of the Portfolio's assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the Portfolio or in deciding which
securities are purchased or sold by the Portfolio. The Portfolio may,
however, invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the Trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. The Boston branch of the Portfolio's custodian leases its office
space from an affiliate of FMR at a lease payment which, when entered into,
was consistent with prevailing market rates. Transactions that have
occurred to date include mortgages and personal and general business loans.
In the judgment of FMR, the terms and conditions of those transactions were
not influenced by existing or potential custodial or other Portfolio
relationships.
AUDITOR. Price Waterhouse, 160 Federal Street, Boston, Massachusetts
serves as the Trust's independent accountant. The auditor examines
financial statements for the Portfolio(s) and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The Portfolio's Annual Report for the fiscal year ended February 28,
1994 is combined with the Prospectus.
THE 500 STOCKS IN THE S&P 500
The following is a list of the 500 Stocks in the S&P 500 as of March
31, 1994.
Abbott Labs
Advanced Micro Devices
Aetna Life & Casualty
Ahmanson (H.F.) & Co.
Air Products & Chemicals
Alberto-Culver
Albertson's
Alcan Aluminum
Alco Standard
Alexander & Alexander
Allergan, Inc.
Allied-Signal
Aluminum Co. of America
ALZA Corp. CI.A
Amdahl Corp.
Amerada Hess
American Barrick Res.
American Brands Inc.
American Cyanamid
American Electric Power
American Express
American General
American Greetings CI A
American Home Products
American Int'l. Group
American Stores
American Tel. & Tel.
Ameritech
Amgen
Amoco
AMP Inc.
AMR Corp.
Andrew Corp.
Anheuser-Busch
Apple Computer
Archer-Daniels Midland
Arkla Inc.
Armco Inc.
Armstrong World
ASARCO Inc.
Ashland Oil
Atlantic Richfield
Autodesk, Inc.
Automatic Data Processing Inc.
Avery Dennison Corp.
Avon Products
Baker Hughes
Ball Corp.
Bally Manufacturing Corp.
Baltimore Gas & Electric
Banc One Corp.
Bank of Boston
BankAmerica Corp.
Bankers Trust N.Y.
Bard (C.R.) Inc.
Barnett Banks Inc.
Bassett Furniture
Bausch & Lomb
Baxter International Inc.
Becton, Dickinson
Bell Atlantic
BellSouth
Bemis Company
Beneficial Corp.
Bethlehem Steel
Beverly Enterprises
Biomet, Inc.
Black & Decker Corp.
Block H&R
Blockbuster Entertainment
Boatmen's Bancshares
Boeing Company
Boise Cascade
Borden, Inc.
Briggs & Stratton
Bristol-Myers Squibb
Brown Group
Browning-Ferris Ind.
Brown-Forman Inc.
Bruno's Inc.
Brunswick Corp.
Burlington Northern
Burlington Resources
Campbell Soup
Capital Cities/ABC
Capital Holding
Carolina Power & Light
Caterpillar Inc.
CBS Inc.
Centex Corp.
Central & SouthWest
Ceridian Corp.
Champion International
Charming Shoppes
Chase Manhattan
Chemical Banking Corp.
Chevron Corp.
Chrysler Corp.
Chubb Corp.
CIGNA Corp.
Cincinnati Milacron
Circuity City Stores
cicso Systems
Citicorp
Clark Equipment
Clorox Co.
Coastal Corp.
Coca Cola Co.
Colgate-Palmolive
Columbia Gas System
Columbia/HCA Healthcare Corp.
Comcast Class A Special
Commonwealth Edison
Community Psych Centers
Compaq Computer
Computer Associates Intl.
Computer Sciences Corp.
ConAgra Inc.
Consolidated Edison
Consolidated Freightways
Consolidated Natural Gas
Consolidated Rail
Continental Corp.
Cooper Industries
Cooper Tire & Rubber
Coors (Adolph)
CoreStates Financial
Corning Inc.
CPC International
Crane Company
Cray Research
Crown Cork & Seal
CSX Corp.
Cummins Engine Co., Inc.
Cyprus Minerals Co.
Dana Corp.
Data General
Dayton Hudson
Dean Witter, Discover & Co.
Deere & Co.
Delta Air Lines
Deluxe Corp.
Detroit Edison
Dial Corp.
Digital Equipment
Dillard Department Stores
Dominion Resources
Donnelley (R.R.) & Sons
Dover Corp.
Dow Chemical
Dow Jones & Co.
Dresser Industries
DSC Communications
Du Pont (E.I.)
Duke Power
Dun & Bradstreet
E G & G Inc.
Eastern Enterprises
Eastman Chemical
Eastman Kodak
Eaton Corp.
Echlin Inc.
Echo Bay Mines Ltd.
Ecolab Inc.
Emerson Electric
Engelhard Corp.
Enron Corp.
Enserch
Entergy Corp.
Exxon Corp.
E-Systems
Fedders Corp.
Federal Express
Federal Home Loan Mtg.
Federal Natl. Mtge.
Federal Paper Board
First Chicago Corp.
First Fidelity Bancorp
First Interstate Bancorp
First Mississippi Corp.
First Union Corp.
Fleet Financial Group
Fleetwood Enterprises
Fleming Cos. Inc.
Fluor Corp.
FMC Corp.
Ford Motor
Foster Wheeler
FPL Group
Gannett Co.
Gap (The)
Gemeral Dynamics
General Electric
General Mills
Gemeral Motors
General Re Corp.
General Signal
Genesco Inc.
Genuine Parts
Georgia-Pacific
Gerber Products
Giant Food CI. A
Giddings & Lewis
Gillette Co.
Golden West Financial
Goodrich (B.F.)
Goodyear Tire & Rubber
Grace (W.R.) & Co.
Grainger (W.W.) Inc.
Great A & P
Great Lakes Chemical
Great Western Financial
Grumman Corp.
GTE Corp.
Halliburton Co.
Handleman Co.
Harcourt General Inc.
Harland (J.H.)
Harnischfeger Indus.
Harris Corp.
Hartmarx Corp.
Hasbro Inc.
Heinz (H.J.)
Helmerich & Payne
Hercules, Inc.
Hershey Foods
Hewlett-Packard
Hilton Hotels
Home Depot
Homestake Mining
Honeywell
Household International
Houston Industries
Illinois Tool Works
Inco, Ltd.
Ingersoll-Rand
Inland Steel Ind. Inc.
Intel Corp.
Interpublic Group
Intergraph Corp.
International Bus. Machines
International Flav/Frag
International Paper
ITT Corp.
James River
Jefferson-Pilot
Johnson Controls
Johnson & Johnson
Jostens Inc.
K Mart
Kaufman & Broad Home Corp.
Kellogg Co.
Kerr-McGee
KeyCorp
Kimberly-Clark
King World Productions
Knight-Ridder Inc.
Kroger Co.
Lilly (Eli) & Co.
Limited, The
Lincoln National
Liz Claiborne, Inc.
Lockheed Corp.
Longs Drug Stores
Loral Corp.
Lotus Development
Louisiana Land & Exploration
Louisiana Pacific
Lowe's Cos.
Luby's Cafeterias
Maillinckrodt Group Inc.
Manor Care
Marriott Int'l
Marsh & McLennan
Martin Marietta
Masco Corp.
Mattel, Inc.
Maxus Energy
May Dept. Stores
Maytag Co.
MBNA Corp.
McCaw Cellular Commun.
McDermott International
McDonald's Corp.
McDonnell Douglas
McGraw-Hill
MCI Communications
McKesson Corp.
Mead Corp.
Medtronic Inc.
Mellon Bank Corp.
Melville Corp.
Mercantile Stores
Merck & Co.
Meredith Corp.
Merrill Lynch
Millipore Corp.
Minn. Mining & Mfg.
Mobil Corp.
Monsanto Company
Moore Corp. Ltd.
Morgan (J.P.) & Co.
Morrison Knudsen
Morton International
Motorola Inc.
M/A Com. Inc.
Nacco Ind. CI. A
Nalco Chemical
National Education
National Intergroup
National Medical Enterprise
National Semiconductor
National Service Ind.
NationsBank
Navistar International Corp.
NBD Bancorp Inc.
New York Times CI. A
Newell Co.
Newmont Mining
Niagara Mohawk Power
NICOR Inc.
Nike Inc.
Nordstrom
Norfolk Southern Corp.
Northern States Power
Northern Telecom
Northrop Corp.
Norwest Corp.
Novell Inc.
Nucor Corp.
Nynex
Occidental Petroleum
Ogden Corp.
Ohio Edison
ONEOK Inc.
Oracle Systems
Oryx Energy
Oshkosh B'Gosh
Outboard Marine
Owens-Corning Fiberglas
PACCAR Inc.
Pacific Enterprises
Pacific Gas & Electric
Pacific Telesis
PacifiCorp
Pall Corp.
Panhandle Eastern
Parker-Hannifin
Penney (J.C.)
Pennzoil Co.
Peoples Energy
Pep Boys
PepsiCo Inc.
Perkin-Elmer
Pet Inc.
Pfizer, Inc.
Phelps Dodge
PECO Energy Co.
Philip Morris
Phillips Petroleum
Pioneer Hi-Bred Int'l
Pitney-Bowes
Pittston Services Group
Placer Dome Inc.
PNC Bank Corp.
Polaroid Corp.
Potlatch Corp.
PPG Inc.
Praxair, Inc.
Premark International
Price/Costco
Procter & Gamble
Promus Inc.
PSI Resources Inc.
Public Serv. Enterprise Inc.
Pulte Corp
Quaker Oats
Ralston Purina
Raychem Corp.
Raytheon Co.
Reebok International
Reynolds Metals
Rite Aid
Roadway Service
Rockwell International
Rohm & Haas
Rollins Environmental
Rowan Cos.
Royal Dutch Petroleum
Rubbermaid inc.
Russell Corp.
Ryan's Family Steak Hse
Ryder System
SAFECO Corp.
Safety-Kleen
Salomon Inc.
Santa Fe Energy Resources
Santa Fe Pacific Corp.
Sara Lee Corp.
SCE Corp.
Schering-Plough
Schlumberger Ltd.
Scientific-Atlanta
Scott Paper
Seagram Ltd.
Sears, Roebuck & Co.
Service Corp. International
Shared Medical Systems
Shawmut National
Sherwin-Williams
Shoney's Inc.
Skyline Corp.
Snap-On Tools
Sonat Inc.
Southern Co.
Southwest Bell Corp.
Springs Industries Inc.
Sprint Corp.
SPX Corp.
Stanley Works
Stone Container
Stride Rite
St. Jude Medical
St. Paul Cos.
Sun Co., Inc.
Sun Microsystems
SunTrust Banks
Supervalu Inc.
Syntex Corp.
Sysco Corp.
Tandem Computers Inc.
Tandy Corp.
Tektronix Inc.
Teledyne Inc.
Tele-Communications
Temple-Inland
Tenneco Inc.
Texaco Inc.
Texas Instruments
Texas Utilities
Textron Inc.
Thomas & Betts
Time Warner nc.
Times Mirror
Timken Co.
TJX Companies Inc.
Torchmark Corp.
Toys R Us
Transamerica Corp.
Transco Energy
Travelers Inc.
Tribune Co.
Trinova Corp.
TRW Inc.
Tyco Int'l Limited
UAL Corp.
Unilever N.V.
Union Camp
Union Carbide
Union Electric Co.
Union Pacific
Unisys Corp.
United Technologies
Unocal Corp.
UNUM Corp.
Upjohn Co.
US West Inc.
USAir Group
USF&G Corp.
USLIFE Corp.
UST Inc.
USX-Marathon Group
USX-U.S. Steel Group
U.S. Bancorp
U.S. Surgical
Varity Corp.
V.F. Corp.
Wachovia Corp.
Walgreen Co.
Walt Disney Co.
Wal-Mart Stores
Warner-Lambert
WMX Technologies
Wells Fargo & Co.
Wendy's International
Western Atlas
Westinghouse Electric
Westvaco Corp.
Weyerhaeuser Corp.
Whirlpool Corp.
Whitman Corp.
Williams Cos.
Winn-Dixie
Woolworth Corp.
Worthington Ind.
Wrigley (Wm) Jr.
Xerox Corp.
Yellow Freight Systems
Zenith Electronics
Zurn Industries
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Audited Financial Statements for Fidelity U.S. Bond Index Portfolio
and Fidelity U.S. Equity Index Portfolio for the fiscal year ended February
28, 1994 are incorporated by reference into the portfolios' prospectuses.
(b) Exhibits:
(1)
Declaration of Trust dated as of July 21, 1987 is electronically
filed herein as Exhibit 1. Supplement to the Declaration of Trust dated
November 30, 1988 is electronically filed herein as Exhibit 1a.
(2) Bylaws of the Trust are electronically filed herein as Exhibit 2.
(3) None.
(4) None.
(5)(a) Management Contract between the Fidelity U.S. Bond Index Portfolio
and Fidelity Management & Research Co. is incorporated herein by
reference to Exhibit 5(a) to Post-Effective Amendment No. 6.
(b) Management Contract between the Fidelity U.S. Equity Index
Portfolio and Fidelity Management & Research Co. is electroncially
filed herein as Exhibit 5(b).
(6)(a) General Distribution Agreement between the Fidelity U.S. Bond
Index Portfolio and Fidelity Distributors Corporation is incorporated
herein by reference to Exhibit 6(a) to Post-Effective Amendment No. 2.
(b) General Distribution Agreement between the Fidelity U.S. Equity
Index Portfolio and Fidelity Distributors Corporation is electroncially
filed herein as Exhibit 6(b).
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Post-Effective Amendment No. 11.
(8)(a) Custodian Agreement between Registrant and Shawmut Bank, N.A. is
incorporated herein by reference to Exhibit 8(a) to Post-Effective
Amendment No. 6.
(b) Custodian Agreement between Registrant and Brown Brothers Harriman
& Co. is incorporated herein by reference to Exhibit 8(b) to
Post-Effective Amendment No. 2.
(c) Subcustodian Agreement between Brown Brothers Harriman and Shawmut
Bank, N.A. is incorporated herein as Exhibit 8(c) to Post-Effective
Amendment No. 2.
(9)(a) Amended Service Agreement (including Schedules B and C for U.S.
Bond Index Portfolio and U.S. Equity Index Portfolio) between the
Registrant, FMR Corp. and Fidelity Service Co. is incorporated herein by
reference to Exhibit 9(a) to Post-Effective Amendment No. 6.
(b) Amended Transfer Agency Agreement (including Schedule A for
Fidelity U.S. Bond Index Portfolio and Fidelity U.S. Equity Index
Portfolio) between the Registrant, FMR Corp. and Fidelity Investments
Institutional Operations Company is electronically filed herein as Exhibit
9(b).
(c) Form of Transfer Agency Agreement (including Schedule A for State
and Local Asset Management Series: Term Portfolio) between the Registrant,
FMR Corp. and Fidelity Investments Institutional Operations Company was
filed as Exhibit 9(d) to Post-Effective Amendment No. 7.
(d) Form of Amended Schedule B to the Service Agreement between
Fidelity U.S. Bond Index Portfolio, FMR Corp. and Fidelity Service Co. was
filed as Exhibit 9(e) to Post-Effective Amendment No. 10.
(e) Form of Amended Schedule B to the Service Agreement between
Fidelity U.S. Equity Index Portfolio, FMR Corp. and Fidelity Service Co.
was filed herein as Exhibit 9(f) to Post-Effective amendment No. 10.
(10) Not applicable.
(11) Consent of Price Waterhouse is filed herein as Exhibit 11 on page
___.
(12) None.
(13) Written assurances that purchase representing initial capital was
made for investment purposes without any present intention of redeeming a
reselling are electronically filed herein as Exhibit 13.
(14)(a) IRA Custodial Agreement and Disclosure Statement prototype is
incorporated herein by reference to Exhibit 14(a) to Post-Effective
Amendment No. 10, filed October 27, 1991.
(b) Defined Contribution Retirement Plan and Trust Agreement
prototype is incorporated herein by reference to Exhibit 14(b) to
Post-Effective Amendment No. 10, filed October 27, 1991.
(c) Defined Benefit Pension Plan and Trust prototype is incorporated
herein by reference to Exhibit 14(c) to Post-Effective Amendment No. 10,
filed October 27, 1991.
(d) IRA Custodial Agreement and Disclosure Statement ("Group") is
incorporated herein by reference to Exhibit 14(d) to Post-Effective
Amendment No. 10, filed October 27, 1991.
(e) Master Plan for Savings Investments prototype is incorporated
herein by reference to Exhibit 14 (e) to Post-Effective amendment No. 10,
filed October 27, 1991.
(f) 401(a) Prototype Plan for Tax-Exempt Employees is incorporated
herein by reference to Exhibit 14(f) to Post-Effective amendment No. 10,
filed October 27, 1991.
(15) 12b-1 Plan for:
(a) Fidelity U.S. Bond Index Portfolio is incorporated herein by
reference to Exhibit 15(a) to Pre-Effective Amendment No. 2.
(b) Fidelity U.S. Equity Index Portfolio is electronically filed
herein as Exhibit 15(b).
(16)(a) Schedules for computations of performance quotations for Fidelity
U.S. Equity Index Portfolio are electronically filed herein as Exhibit
16(a).
(b) Schedules for computations of performance quotations for
Fidelity U.S. Bond Index Portfolio are incorporated herein by reference to
Exhibit 16 to Post-Effective Amendment No. 3.
Item 25. Persons Controlled by or Under Common Control with Registrant
Fidelity Management & Research Company, the investment adviser, owns a
majority of shares of the Registrant. All of the outstanding stock of
Fidelity Management & Research Company, a Massachusetts corporation, is
owned by FMR Corp., a Massachusetts corporation. FMR Corp. is controlled
by Edward C. Johnson 3d, by reason of his current ownership of more than
50% of the voting common stock of the company. Fidelity Management &
Research Company owns all of the outstanding voting securities of Fidelity
Distributors Corporation, a Massachusetts corporation. Fidelity Service
Co., Fidelity Investments Institutional Operations Company, and Fidelity
Investments Retail Services are divisions of FMR Corp. FMR Corp. also
owns all of the outstanding voting securities of FMR Investment Management
Service, Inc. and Fidelity International Investment Management, Inc.,
Delaware corporations, and Fidelity Investors Credit Corp., a Massachusetts
corporation.
Item 26. Number of Holders of Securities
March 31, 1994
Title of Class Number of
Record Holders
Fidelity U.S. Equity Index Portfolio 372,052
Fidelity U.S. Bond Index Portfolio 39,409
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee, or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; President and
Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President
and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research
(Far East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR; Corporate
Preferred Group Leader.
Will Danof Vice President of FMR (1993) and of a fund advised by FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of the
Fidelity funds; Treasurer of FMR Texas Inc., Fidelity Management
& Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised by
FMR. Prior to assuming the position as Treasurer he was Senior
Vice President, Fund Accounting - Fidelity Accounting &
Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group Leader and
International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
<TABLE>
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John Hickling Vice President of FMR (1993) and of funds advised by FMR.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income Group
Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised by
FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income Division
Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised by
FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by
FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of FMR;
Vice President, Legal of FMR Corp.; and Secretary of funds
advised by FMR.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
custodian, Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 17 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 29th day
of April, 1994.
FIDELITY INSTITUTIONAL TRUST
By /s/Edward C. Johnson 3d(dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
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<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee April 29, 1994
Edward C. Johnson 3d (Principal Executive Officer)
/s/Gary L. French Treasurer April 29, 1994
Gary L. French
/s/J. Gary Burkhead Trustee April 29, 1994
J. Gary Burkhead
/s/Ralph F. Cox* Trustee April 29, 1994
Ralph F. Cox
/s/Phyllis Burke Davis* Trustee April 29, 1994
Phyllis Burke Davis
/s/Richard J. Flynn* Trustee April 29, 1994
Richard J. Flynn
/s/E. Bradley Jones* Trustee April 29, 1994
E. Bradley Jones
/s/Donald J. Kirk* Trustee April 29, 1994
Donald J. Kirk
/s/Peter S. Lynch* Trustee April 29, 1994
Peter S. Lynch
/s/Edward H. Malone* Trustee April 29, 1994
Edward H. Malone
/s/Marvin L. Mann* Trustee April 29, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee April 29, 1994
Gerald C. McDonough
/s/Thomas R. Williams* Trustee April 29, 1994
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuand to a power of attorney
dated October 20, 1993and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
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<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
Exhibit 1
DECLARATION OF TRUST
DATED July 10, 1987
DECLARATION OF TRUST, made July 10, 1987 by Edward C. Johnson 3d,
J. Gary Burkhead, and Frank Nesvet (the "Trustees")
WHEREAS, the Trustees desire to establish a trust fund for the investment
and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed in Trust
under this Declaration of Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "Fidelity Institutional Trust."
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the context
or specifically provided:
(a) The Terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Majority Shareholder Vote" and "Principal Underwriter" shall have
the meanings given them in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to Fidelity Institutional Trust and reference to
the Trust, when applicable to one or more Series of the Trust, shall refer
to any such Series;
(c) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refers to the individual trustees in their capacity as
trustees hereunder of the Trust and their successor or successors for the
time being in office as such trustee or trustees;
(f) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest of each Series shall be divided from
time to time, and includes fractions of shares as well as whole shares
consistent with the requirements of Federal and/or other securities laws;
and
(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
(h) "Series" refers to series of Shares of the Trust established in
accordance with the provisions of Article III.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of
managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided into such
transferable Shares of one or more separate and distinct Series as the
Trustees shall from time to time create and establish. The number of
Shares is unlimited and each Share shall be without par value and shall be
fully paid and nonassessable. The Trustees shall have full power and
authority, in their sole discretion and without obtaining any prior
authorization or vote of the Shareholders of the Trust to create and
establish (and to change in any manner) Shares with such preferences,
voting powers, rights and privileges as the Trustees may from time to time
determine, to divide or combine the Shares into a greater or lesser number,
to classify or reclassify any issued Shares into one or more Series of
Shares, to abolish any one or more Series of Shares, and to take such other
action with respect to the Shares as the Trustees may deem desirable.
ESTABLISHMENT OF SERIES
Section 2. The establishment of any Series shall be effective upon the
adoption of a resolution by a majority of the then Trustees setting forth
such establishment and designation and the relative rights and preferences
of the Shares of such Series. At any time that there are no Shares
outstanding of any particular Series previously established and designated,
the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books of the
Trust. The Trustees may make such rules as they consider appropriate for
the transfer of Shares and similar matters. The record books of the Trust
shall be conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the
appropriate Series is authorized to invest, valued as provided in Article
X, Section 3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in the Trustees'
discretion be considered as outstanding and the amount received by the
Trustees on account of the contribution shall be treated as an asset of the
Trust. Subsequent investments in the Trust shall be credited to each
Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however,
that the Trustees may, in their sole discretion, (a) impose a sales charge
upon investments in the Trust and (b) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for the issue or sale
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which
are not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in
such manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders
of all Series for all purposes, and shall be referred to as assets
belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held by the
Trustees in Trust for the benefit of the holders of Shares of that Series.
The assets belonging to each particular Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series. Any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees between or among any one or more of the Series in such manner as
the Trustees in their sole discretion deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all
Series for all purposes. Any creditor of any Series may look only to the
assets of that Series to satisfy such creditor's debt.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust
or the Trustees.
LIMITATION OF PERSONAL LIABILITY
Section 7. The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of
money or assessment whatsoever other than such as the Shareholder may at
any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust shall include a
recitation limiting the obligation represented thereby to the Trust and its
assets (but the omission of such a recitation shall not operate to bind any
Shareholder).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility.
ELECTION: INITIAL TRUSTEES
Section 2. On a date fixed by the Trustees, the Shareholders shall elect
not less than three Trustees. A Trustee shall not be required to be a
Shareholder of the Trust. The initial Trustees shall be Edward C. Johnson
3d, J. Gary Burkhead and Frank Nesvet and such other individuals as the
Board of Trustees shall appoint pursuant to Section 4 of the Article IV.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except (a) that
any Trustee may resign his trust by written instrument signed by him and
delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) that any Trustee may
be removed at any time by written instrument, signed by at least two-thirds
of the number of Trustees prior to such removal, specifying the date when
such removal shall become effective; (c) that any Trustee who requests in
writing to be retired or who has become incapacitated by illness or injury
may be retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may be
removed at any Special Meeting of the Trust by a vote of two-thirds of the
outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal, incapacity, or inability of any of the Trustees, or in case a
vacancy shall, by reason of an increase in number, or for any other reason,
exist, the remaining Trustees shall fill such vacancy by appointing such
other person as they in their discretion shall see fit consistent with the
limitations under the Investment Company Act of 1940. Such appointment
shall be evidenced by a written instrument signed by a majority of the
Trustees in office or by recording in the records of the Trust, whereupon
the appointment shall take effect. Within three months of such appointment
the Trustees shall cause notice of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the Trust. An
appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as aforesaid in anticipation of a
vacancy to occur by reason of retirement, resignation or increase in number
of Trustees effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said retirement,
resignation or increase in number of Trustees. As soon as any Trustee so
appointed shall have accepted this trust, the trust estate shall vest in
the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of Section 16(a) of
the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his power for
a period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more than
twelve (12), serving hereunder at any time shall be determined by the
Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until such
vacancy is filled, or while any Trustee is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy,
absence or incapacity, shall be conclusive, provided, however, that no
vacancy shall remain unfilled for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal,
incapacity, or inability of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee
hereunder by the Trustees or any successor Trustees. All of the assets of
the Trust shall at all times be considered as vested in the Trustees. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof, but
each Shareholder shall have a proportionate undivided beneficial interest
in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. Subject to the limits of the 1940 Act, the Trustees in all
instances shall act as principals, and are and shall be free from the
control of the Shareholders. The Trustees shall have full power and
authority to do any and all acts and to make and execute any and all
contracts and instruments that they may consider necessary or appropriate
in connection with the management of the Trust. The Trustees shall not in
any way be bound or limited by present or future laws or customs in regard
to trust investments, but shall have full authority and power to make any
and all investments which they, in their uncontrolled discretion, shall
deem proper to accomplish the purpose of this Trust. Subject to any
applicable limitation in the Declaration of Trust or the Bylaws of the
Trust, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited by
any present or future law or custom in regard to investments by Trustees,
and to sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal them to the extent that they do not reserve that right to the
Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ any person meeting the requirements of the 1940 Act as
custodian of any assets of the Trust subject to any conditions set forth in
this Declaration of Trust or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or both.
(f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both.
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any officers
of the Trust and to any agent, custodian or underwriter.
(i) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article XII, Section 4(b) hereof.
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in its
own name or in the name of a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual practice of
Massachusetts trust companies or investment companies.
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III.
(n) To allocate assets, liabilities and expenses of the Trust to a
particular Series or to apportion the same between or among two or more
Series, provided that any liabilities or expenses incurred by a particular
Series shall be payable solely out of the assets belonging to that Series
as provided for in Article III.
(o) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or concern, and to pay
calls or subscriptions with respect to any security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited
to, claims for taxes.
(q) To make distributions of income and of capital gains to Shareholders
in the manner hereinafter provided for.
(r) To borrow money and to pledge, mortgage and hypothecate the assets of
the Trust, subject to applicable requirements of the 1940 Act.
(s) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving notice
to such Shareholder.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or
upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be issued
and sold Shares to and buy such Shares from any such person of any firm or
company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone
consent provided a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken
only at a meeting of the Trustees. At any meeting of the Trustees, a
majority of the Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman of the Trustees
or by any two other Trustees. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the meeting to
each Trustee by telephone or telegram sent to his home or business address
at least twenty-four hours in advance of the meeting or by written notice
mailed to his home or business address at least seventy-two hours in
advance of the meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who executes
a written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to
any one of their number their authority to approve particular matters or
take particular actions on behalf of the Trust.
CHARIMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5, the
Trustees shall be reimbursed from the Trust estate or the assets belonging
to the appropriate Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who are not Interested
Persons of the Trust, interest expense, taxes, fees and commissions of
every kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of shares including expenses attributable
to a program of periodic repurchases or redemptions, expenses of
registering and qualifying the Trust and its Shares under Federal and State
laws and regulations, charges of custodians, transfer agents, and
registrars, expenses of preparing and setting up in type Prospectuses and
Statements of Additional Information, expenses of printing and distributing
prospectuses sent to existing Shareholders and for regulatory purposes,
auditing and legal expenses, reports to Shareholders, expenses of meetings
of Shareholders and proxy solicitations therefor, insurance expense,
association membership dues and for such non-recurring items as may arise,
including litigation to which the Trust is a party, and for all losses and
liabilities by them incurred in administering the Trust, and for the
payment of such expenses, disbursements, losses and liabilities the
Trustees shall have a lien on the assets belonging to the appropriate
Series prior to any rights or interests of the Shareholders thereto. This
section shall not preclude the Trust from directly paying any of the
aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees may in
their discretion from time to time enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof
whereby the other party(ies) to such contract(s) shall undertake to furnish
the Trustees such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any, and
all upon such terms and conditions, as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration of Trust,
the Trustees may authorize the investment adviser(s) (subject to such
general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales or exchanges of portfolio securities and
other investment instruments of the Trust on behalf of the Trustees or may
authorize any officer, agent, or Trustee to effect such purchases, sales or
exchanges pursuant to recommendations of the investment adviser (and all
without further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by all of the Trustees.
The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to Shareholder approval, authorize the investment
adviser to employ one or more sub-advisers from time to time to perform
such of the acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the investment adviser
and sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time enter
into (a) contract(s) providing for the sale of the Shares, whereby the
Trust may either agree to sell the Shares to the other party to the
contract or appoint such other party its sales agent for such Shares. In
either case, the contract shall be on such terms and conditions as may be
prescribed in the Bylaws, if any, and such further terms and conditions as
the Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII, or of the Bylaws, if any; and such contract
may also provide for the repurchase or sale of Shares by such other party
as principal or as agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time enter
into a transfer agency and Shareholder service contract whereby the other
party shall undertake to furnish the Trustees with transfer agency and
Shareholder services. The contract shall be on such terms and conditions
as the Trustees may in their discretion determine not inconsistent with the
provisions of this Declaration of Trust or of the Bylaws, if any. Such
services may be provided by one or more entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2 and 3
of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more
of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, and no
such contract shall be invalidated or rendered voidable by reason of the
existence of any relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable
for any profit realized directly or indirectly therefrom, provided that the
contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article VII or the Bylaws, if any. The same
person (including a firm, corporation, partnership, trust, or association)
may be the other party to contracts entered into pursuant to Sections 1, 2
and 3 above or Article IX, and any individual may be financially interested
or otherwise affiliated with persons who are parties to any or all of the
contracts mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2 of this
Article VII shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act (including any amendments thereof or other
applicable Act of Congress hereafter enacted) with respect to its
continuance in effect, its termination, and the method of authorization and
approval of such contract or renewal thereof, and no amendment to any
contract, entered into pursuant to Section 1 shall be effective unless
assented to by a Majority Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote (i) for the election
of Trustees as provided in Article IV, Section 2, (ii) for the removal of
Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII,
Section 1, (iv) with respect to the amendment of this Declaration of Trust
as provided in Article XII, Section 7, (v) to the same extent as the
shareholders of a Massachusetts business corporation, as to whether or not
a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a particular Series
shall not be entitled to bring any derivative or class action on behalf of
any other Series of the Trust, (vi) to amend the fundamental investment
policy of the Trust; and (vii) with respect to such additional matters
relating to the Trust as may be required or authorized by law, by this
Declaration of Trust, or the Bylaws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all shares shall be voted
by individual Series, except (i) when required by the 1940 Act, Shares
shall be voted in the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects only the interests of
one or more Series, then only the Shareholders of such Series shall be
entitled to vote thereon. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required or permitted by
law, this Declaration of Trust or any Bylaws of the Trust to be taken by
Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other
place as the Trustees may designate. Special meetings of the Shareholders
of any Series may be called by the Trustees and shall be called by the
Trustees upon the written request of Shareholders owning at least one-tenth
of the outstanding Shares entitled to vote. Whenever ten or more
Shareholders meeting the qualifications set forth in Section 16(c) of the
1940 Act, as the same may be amended from time to time, seek the
opportunity of furnishing materials to the other Shareholders with a view
to obtaining signatures on such a request for a meeting, the Trustees shall
comply with the provisions of said Section 16(c) with respect to providing
such Shareholders access to the list of the Shareholders of record of the
Trust or the mailing of such materials to such Shareholders of record.
Shareholders shall be entitled to at least fifteen days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of
Trust permits or requires that holders of any Series shall vote as a
Series, then a majority of the aggregate number of Shares of that Series
entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that Series. Any lesser number shall be
sufficient for adjournments. Any adjourned session or sessions may be
held, within a reasonable time after the date set for the original meeting,
without the necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the Bylaws, a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where any
provision of law or of this Declaration of Trust permits or requires that
the holders of any Series shall vote as a Series, then a majority of the
Shares of that Series voted on the matter shall decide that matter insofar
as that Series is concerned.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank or trust company
or other person otherwise meeting the requirements of the 1940 Act having
capital, surplus and undivided profits of at least two million dollars
($2,000,000) as custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be
contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
and
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian or other person as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical and
accounting services; and
(2) to compute, if authorized to do so by the Trustees, the Net Asset Value
of any Series in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian or such other person. If so directed by a
Majority Shareholder Vote, the custodian shall deliver and pay over all
property of the Trust held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees,
provided that in every case such sub-custodian shall be a bank or trust
company organized under the laws of the United States or one of the states
thereof and having capital, surplus and undivided profits of at least two
million dollars ($2,000,000) or such other person as may be permitted by
the Commission, or otherwise in accordance with the 1940 Act as from time
to time amended.
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit all
or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by the Commission, or otherwise in accordance with the
1940 Act as from time to time amended, pursuant to which system all
securities of any particular class or series of any issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided
that all such deposits shall be subject to withdrawal only upon the order
of the Trust.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and pay dividends. The
amount of such dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have power, to the fullest extent permitted by the
laws of Massachusetts, at any time to declare and cause to be paid
dividends on Shares of a particular Series, from the assets belonging to
that Series, which dividends, at the election of the Trustees, may be paid
daily or otherwise pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, and may be
payable in Shares of that Series at the election of each Shareholder of
that Series.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute pro rata among the
Shareholders of a particular Series as of the record date of that Series
fixed as provided in Section 3 hereof a "stock dividend".
REDEMPTIONS
Section 2. In case any holder of record of Shares of a particular Series
desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of that Series a written request
or such other form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in accordance
with this Section 2; and the Shareholder so requesting shall be entitled to
require the Series to purchase, and the Series or the principal underwriter
of the Series shall purchase his said Shares, but only at the Net Asset
Value thereof (as described in Section 3 hereof). The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or
property from the assets of that Series and payment for such Shares shall
be made by the Series or the principal underwriter of the Series to the
Shareholder of record within seven (7) days after the date upon which the
request is effective.
DETERMINATION OF NET ASSET VALUE AND
VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series, exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value per Share
shall be determined separately for each Series of Shares and shall be
determined on such days and at such times as the Trustees may determine.
Such determination shall be made with respect to securities for which
market quotations are readily available, at the market value of such
securities; and with respect to other securities and assets, at the fair
value as determined in good faith by the Trustees, provided, however, that
the Trustees, without Shareholder approval, may alter the method of
appraising portfolio securities insofar as permitted under the 1940 Act and
the rules, regulations and interpretations thereof promulgated or issued by
the Commission or insofar as permitted by any Order of the Commission
applicable to the Series. The Trustees may delegate any of its powers and
duties under this Section 3 with respect to appraisal of assets and
liabilities. At any time the Trustees may cause the value per Share last
determined to be determined again in similar manner and may fix the time
when such redetermined value shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall
specify but not later than the close of business on the business day next
following the declaration of suspension, and thereafter there shall be no
right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share existing after the
termination of the suspension.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of
the Trust, the Trustees shall not be responsible for or liable in any event
for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained herein shall protect
any Trustee against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
INDEMNIFICATION
Section 2.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as "Covered Person") shall be indemnified by the
appropriate Series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes involved as
a party or otherwise by virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which the
proceeding was brought to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither interested
persons of the Trust nor are parties to the matter based upon a review of
readily available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a review
of readily available facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees, or by
independent counsel.
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now
or hereafter be entitled, shall continue as to a person who has ceased to
be such Trustee or officer and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein
shall affect any rights to indemnification to which Trust personnel, other
than Trustees and officers, and other persons may be entitled by contract
or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described
in paragraph (a) of this Section 2 may be paid by the applicable Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the applicable Series if it is ultimately determined
that he is not entitled to indemnification under this Section 2; provided,
however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust is insured against
losses arising out of any such advance payments or (c) either a majority of
the Trustees who are neither interested persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a
trial-type inquiry or full investigation), that there is reason to believe
that such Covered Person will be found entitled to indemnification under
this Section 2.
SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder of any Series of
the Trust shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his
heirs, executors, administrators or other legal representatives or in the
case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets belonging to the applicable
Series to be held harmless from and indemnified against all loss and
expense arising from such liability. The Series shall, upon request by the
Shareholder, assume the defense of any claim made against the Shareholder
for any act or obligation of the Series and satisfy any judgment thereon.
ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power
to bind personally either the Trust's officers or any Shareholder. All
persons extending credit to, contracting with or having any claim against
the Trust or the Trustees shall look only to the assets of the appropriate
Series for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past,
present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect a Trustee against any liability to which
the Trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to the
provisions of Section 1 of this Article XII and to Article XI, the Trustees
shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust, and subject to the
provisions of Section 1 of this Article XII and to Article XI, shall be
under no liability for any act or omission in accordance with such advice
or for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the Trust
for a period not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for the payment of any dividends, or
the date for the allotment of rights, or the date when any change or
conversion or exchange of Shares shall go into effect; or in lieu of
closing the stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding sixty (60) days preceding the date of any
meeting of Shareholders, or the date for payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion
or exchange of Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of, and to vote at,
any such meeting, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record
on the date so fixed shall be entitled to such notice of, and to vote at,
such meeting, or to receive payment of such dividend, or to receive such
allotment or rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the Trust after
any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but subject to
the provisions of sub-section (b) of this Section 4.
(b) Subject to a Majority Shareholder Vote of each Series affected by the
matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may
(i) sell and convey the assets of the Trust or any affected Series to
another trust, partnership, association or corporation organized under the
laws of any state which is a diversified open-end management investment
company as defined in the 1940 Act, for adequate consideration which may
include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any affected Series,
and which may include shares of beneficial interest or stock of such trust,
partnership, association or corporation; or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series.
Upon making provision for the payment of all such liabilities in either
(i) or (ii), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably among the
holders of the Shares of the Trust or any affected Series then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in sub-section (b), the Trust or any affected
Series shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and interest
of all parties shall be cancelled and discharged.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed by
the Trustees with the Secretary of the Commonwealth of Massachusetts and
the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust
may rely on a certificate by an officer or Trustee of the Trust as to
whether or not any such supplemental declarations of trust have been made
and as to any matters in connection with the Trust hereunder, and with the
same effect as if it were the original, may rely on a copy certified by an
officer or Trustee of the Trust to be a copy of this instrument or of any
such supplemental declaration of trust. In this instrument or in any such
supplemental declaration of trust, references to this instrument, and all
expressions like "herein," "hereof" and "hereunder," shall be deemed to
refer to this instrument as amended or affected by any such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed
in any number of counterparts each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The trust set forth in this instrument is made in the
Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily exercised by such a
trust.
AMENDMENTS
Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable
law or this Declaration of Trust in any particular case, the Trustees shall
amend or otherwise supplement this instrument, by making a declaration of
trust supplemental hereto, which thereafter shall form a part hereof,
except that an amendment which shall affect the Shareholders of one or more
Series but not the Shareholders of all outstanding Series shall be
authorized by vote of the Shareholders holding a majority of the Shares
entitled to vote of each Series affected and no vote of Shareholders of a
Series not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing any
ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require authorization by
Shareholder vote. Copies of the supplemental declaration of trust shall be
filed as specified in Section 5 of this Article XII.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall end on a specified date as
set forth in the Bylaws, provided, however, that the Trustees may, without
Shareholder approval, change the fiscal year of the Trust.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument this day of July, 1987.
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
/s/J. Gary Burkhead
J. Gary Burkhead
/s/Frank Nesvet
Frank Nesvet
dot-fit/dl
Exhibit 1a
THE COMMONWEALTH OF MASSACHUSETTS
MICHAEL JOSEPH CONNOLLY
SECRETARY OF THE COMMISSION
SUPPLEMENT TO THE DECLARATION OF TRUST
We, J. Gary Burkhead, Senior Vice President, and Arthur S. Loring,
Secretary of
FIDELITY INSTITUTIONAL TRUST
82 Devonshire Street
Boston, Massachusetts 02109
do hereby certify that, in accordance with Article XII, Section 7 of the
Declaration of Trust of FIDELITY INSTITUTIONAL TRUST, the following
Supplement to said Declaration of Trust was duly adopted by a majority of
shareholders of the Trust at a meeting held on October 19, 1988.
VOTED: That Article IX, Section IX, Section 1 of the Declaration of Trust
dated July 10, 1987, be and it hereby is amended as follows:
"The Trustees shall at all times employ a bank or trust company having
capital, surplus and undivided profits of at least two million dollars
($2,000,000), or such other amount or such other entity as shall be allowed
by the Commission or by the 1940 Act, as custodian with authority as its
agents, but subject to such restrictions, limitations or other
requirements, if any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same upon
written order or oral order, if confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust and
the custodian, if such procedures have been authorized in writing by the
Trust;
(2) to receive and receipt for any moneys due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical and
accounting services; and
(2) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian or such other person. If so directed by a
Majority Shareholder Vote, the custodian shall deliver and pay over all
property of the Trust held by it as specified in such votes.
The Trustees also may authorize the custodian to employ one or more
subcustodians from time to time to perform such of the acts and services of
the custodian, and upon such terms such terms and conditions, as may be
agreed upon between the custodian and such sub-custodian and approved by
the Trustees, provided that in every case such sub-custodian shall be a
bank or trust company organized under the laws of the United States or one
of the states thereof and having capital, surplus and undivided profits of
at least two million dollars ($2,000,000) or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act
as from time to time amended."
The foregoing supplement to the Declaration will become effective December
1, 1988 so long as this is filed in accordance with Chapter 182, Section 2,
of the General Laws.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto
signed our names this 30th day of November, 1988.
/s/J. Gary Burkhead /s/Arthur S. Loring
J. Gary Burkhead Arthur S. Loring
Senior Vice President Secretary
/2crm-19
LG941050016
Exhibit 2
BYLAWS
of
FIDELITY INSTITUTIONAL TRUST
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers as the Trustees may from
time to time elect. It shall not be necessary for nay Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be
chosen annually by the Trustees. The President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their
successors are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign
by filing a written resignation with the President or with the Trustees or
with the Secretary, which shall take effect on being so filed at such time
as may be therein specified. The Trustees may at any meeting remove any
officer.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers necessary and
desirable to carry out the responsibility, so far as such powers are not
inconsistent with the laws of the Commonwealth of Massachusetts, the
Declaration of Trust, or with these Bylaws.
SECTION 2. Executive and other Committees. The Trustees may elect from
their own number an executive committee to consist of not less than three
nor more than five members, which shall have the power and duty to conduct
the current and ordinary business of the Trust, including the purchase and
sale of securities, while the Trustees are not in session, and such other
powers and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other
committees from time to time, the number composing such committees and the
powers conferred upon the same to be determined by vote of the Trustees.
SECTION 3. Chairman of the Trustees. The Trustees may, but need not
appoint from among their number a Chairman. He shall perform any such
duties as the Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief executive officers
of the Trust and, subject to the Trustees, shall have general supervision
over the business and policies of the Trust. When present, he shall
preside at all meetings of the shareholders and the Trustees, and he may,
subject to the approval of the Trustees, appoint a Trustee to preside at
such meetings in his absence. The President shall perform such duties
additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. he shall deliver all funds and securities
of the Trust which may come into his hands to such company as the Trustees
shall employ as custodian. He shall have the custody of the seal of the
Trust. He shall make annual reports shall be preserved upon its records,
and he shall furnish such other reports regarding the business and
condition as the Trustees may from time to time require. The Treasurer
shall perform such duties additional to foregoing as the Trustees may from
time to designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the
purpose all votes and proceedings of the Trustees and the shareholders at
their respective meetings.
The Secretary shall perform such duties additional to the foregoing as the
Trustees may from time to time designate.
SECTION 7. Vice President. Each Vice President of the Trust shall perform
such duties as the Trustees may from time to time designate.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust
shall perform such duties as the Trustees may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION 1. Special Meetings. A special meeting of the shareholders shall
be called by the Secretary whenever ordered by the Trustees or requested in
writing by the holder or holders of at least one-tenth of the outstanding
shares entitled to vote. If the Secretary, when so ordered or requested,
refuses or neglects for more than two days to call such special meeting
promptly, the Trustees or the shareholders so requesting may, in the name
of the Secretary, call the meeting by giving notice thereof in the manner
required when notice is given by the Secretary.
SECTION 2. Notices. Except as above provided, notices of any special
meeting of the shareholders shall be given by the Secretary by delivering
or mailing, postage prepaid, to each shareholder entitled to vote at said
meeting promptly, a written or printed notification of such meeting, at
least fifteen days before the meeting, to such address as may be registered
with the Trust by the shareholder, provided, however, that notice of a
meeting need not be given to a shareholder to whom such notice need not be
given under the proxy rules of the Securities and Exchange Commission under
the Investment Company Act of 1940 and the Securities and Exchange Act of
1934, each as amended.
SECTION 3. Place of Meeting. All special meetings of the shareholders
shall be held at the principal place of business of the Trust in Boston,
Massachusetts or at such other place in the United States as the Trustees
may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Special Meetings. Special meetings of the Trustees shall be
called by the Secretary at the written request of the President, the
Treasurer, or any two Trustees, and if the Secretary when so requested
refuses or fails to call such meeting promptly, the President, the
Treasurer, or such two Trustees, may in the name of the Secretary call such
meeting by giving due notice in the manner required when notice is given by
the Secretary.
SECTION 2. Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may
from time to time determine, provided that any Trustee who is absent when
such determination is made shall be given notice of the determination.
SECTION 3. Quorum. A majority of the Trustees shall constitute a quorum
for the transaction of business.
SECTION 4. Notices. Except as otherwise provided, notice of any special
meeting of the Trustees shall be given by the Secretary to each Trustee, by
mailing to him, postage prepaid, addressed to him at his address as
registered on the books of the Trust or, if not so registered, at his last
known address, a written or printed notification of such meeting at least
three days before the meeting, or by sending to him at least 24 hours
before the meeting, by prepaid telegram, addressed to him at his said
registered address, if any, or if he has no such registered address, at his
last known address, notice of such meeting.
SECTION 5. Place of Meeting. All special meetings of the Trustees shall
be held at the principal place of business of the Trustees in Boston,
Massachusetts, or such other place within or without the Commonwealth as
the person or persons requesting said meeting to be called may designate,
but any meeting may adjourn to any other place.
SECTION 6. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding
of the meeting without notice, or after the meeting shall sign a written
assent thereto on the record of such meeting, the acts of such meeting
shall be valid as if such meeting had been regularly held.
SECTION 7. Action by Consent. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the
Trustees and filed with the records of the Trustees meetings, or by
telephone consent provided a quorum of Trustees participate in any such
telephone meeting. Such consent shall be treated as vote of the Trustees
for all purposes.
ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust
shall at all times be divided into an unlimited number of transferable
Shares without par value, each of which shall represent an equal
proportionate interest in the class with each other Share of the class
outstanding, none having priority or preference over another.
SECTION 2. Transfer of Stock. The Shares of the Trust shall be
transferable, so as to affect the rights of the Trust, only by transfer
recorded on the books of the Trust, in person or by attorney.
SECTION 3. Equitable Interest Not Recognized. The Trust shall be entitled
to treat the holder of record of any share or shares of stock as the holder
in fact thereof, and shall not be bound to recognize any equitable or other
claim or interest in such share or shares on the part of any other person
except as may be otherwise expressly provided by law.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right to
inspecting any account or book or document of the Trust except as conferred
by law or otherwise by the Trustees or by resolution of the shareholders.
ARTICLE VII
Seal
The seal of the Trust shall be circular in form bearing the inscription:
"FIDELITY INSTITUTIONAL TRUST - 1987"
ARTICLE VIII
Fiscal Year
The fiscal year of the Trust shall be in the period of twelve months
ending on the ___ day of _________ in each calendar year.
ARTICLE IX
Amendments
These Bylaws may be amended at any meeting of the Trustees of the Trust by
a majority vote.
ARTICLE X
Reports to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including
financial statements which shall at least annually be certified by
independent public accountants.
by-fit/mm
LG941050026
Exhibit 5(b)
MANAGEMENT CONTRACT
between
FIDELITY INSTITUTIONAL TRUST:
Fidelity U.S. Equity Index Portfolio
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 13th day of January 1988, by and between Fidelity
Institutional Trust a Massachusetts business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Fidelity U.S. Equity Index Portfolio (hereinafter
called the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the
supervision of the Fund's Board of Trustees, direct the investments of the
Portfolio in accordance with the investment objective, policies and
limitations as provided in the Portfolio's Prospectus or other governing
instruments, as amended from time to time, the Investment Company Act of
1940 and rules thereunder, as amended from time to time (the "1940 Act"),
and such other limitations as the Portfolio may impose by notice in writing
to the Adviser. The Adviser shall also furnish for the use of the
Portfolio office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Portfolio; and shall pay the
salaries and fees of all officers of the Fund, of all Trustees of the Fund
who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to
research, statistical and investment activities. The Adviser is
authorized, in its discretion and without prior consultation with the
Portfolio, to buy, sell, lend and otherwise trade in any stocks, bonds and
other securities and investment instruments on behalf of the Portfolio.
The investment policies and all other actions of the Portfolio are and
shall at all times be subject to the control and direction of the Fund's
Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares
under federal and state law; and (vii) investigating the development of and
developing and implementing, if appropriate, management and shareholder
services designed to enhance the value or convenience of the Portfolio as
an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates which are reasonable
in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms
are defined in Section 28(e) of the Securities Exchange Act of 1934) to the
Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the value
of the brokerage and research services provided by such broker or dealer.
This determination may be viewed in terms of either that particular
transaction or the overall responsibilities which the Adviser and its
affiliates have with respect to accounts over which they exercise
investment discretion. The Trustees of the Fund shall periodically review
the commissions paid by the Portfolio to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee at the annual fate of .28% of the
average daily net assets of the Portfolio (computed in the manner set forth
in the Declaration of Trust) throughout the month; provided
that in the case of initiation or termination of the Contract druing any
month, the fee for that month shall be reduced proportionately on the basis
of the number of business days during which it is in effect and the fee
computed upon the average net assets for the business days it is so in
effect for that month.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding meetings
of the Portfolio's shareholders, including proxy solicitations therefor;
(ix) a pro rata share, based on relative net assets of the Portfolio and
other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for
fidelity and other coverage; (x) its proportionate share of association
membership dues; (xi) expenses of typesetting for printing Prospectuses and
Statements of Additional Information and supplements thereto; (xii)
expenses of printing and mailing Prospectuses and Statements of Additional
Information and supplements thereto sent to existing shareholders; and
(xiii) such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Portfolio is a
party and the legal obligationwhich the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, 1988
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust are separate and distinct from those of any and all
other Portfolios.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY INSTITUTIONAL TRUST on behalf
of Fidelity U.S. Equity Index Portfolio
SEAL By /s/ Edward C. Johnson 3d
Edward C. Johnson 3d
President
FIDELITY MANAGEMENT & RESEARCH COMPANY
SEAL By /s/ J. Gary Burkhead
J. Gary Burkhead
President
mc-useip/dl
Exhibit 6(b)
GENERAL DISTRIBUTION AGREEMENT
between
Fidelity U.S. Equity Index Portfolio
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 13th day of January 1988, between Fidelity
Institutional Trust, a Massachusetts business trust which may issue one or
more series of beneficial interest ("Issuer"), with respect to shares of
Fidelity U.S. Equity Index Portfolio, a series of the Issuer, and Fidelity
Distributors Corporation, a Massachusetts corporation having its principal
place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributors except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in
connection with the preparation, setting in type and filing of any
registration statement, Prospectus and Statement of Additional Information
under the 1933 Act and amendments for the issuer of its shares, (b) in
connection with the registration and qualification of shares for sale in
the various states in which the Board of Trustees of the Issuer shall
determine its advisable to qualify such shares for sales (including
registering the Issuer as a broker or dealer or any officer of the Issuer
as agent or salesman in any state), (c) of preparing, setting in type,
printing and mailing any report or other communication to shareholders of
the Issuer in their capacity as such, and (d) of preparing, setting in
type, printing and mailing Prospectuses, Statements of Additional
Information and any supplements thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
under this Agreement, or (ii) is the Issuer to be liable under its
indemnity agreement contained in this paragraph wither respect to any claim
made against the Distributor or any person indemnified unless the
Distributor or person, as the case may be, shall notified the Issuer in
writing of the claim within a reasonable time after the summons or other
first written notification giving information of the nature of the claim
shall have been served upon the Distributor or any such person (or after
the Distributor or such person shall have received notice of service on any
designated agent). However, failure to notify the Issuer of any claim
shall not relieve the Issuer from any liability which it may have to the
Distributor or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph.
The Issuer shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any claims, but if the Issuer elects to assume the defense, the
defense shall be conducted by counsel chosen by it and defendants in the
suit. In the event the Issuer elects to assume the defense of any suit and
retain counsel, the Distributor, officers or directors or controlling
person or persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional counsel retained by them. If the Issuer
does not elect to assume the defense of any suit, it will reimburse the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses
of any counsel retained by them. The Issuer agrees to notify the
Distributor promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the Issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issuer and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1988 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice
of the limitation of shareholder liability as set forth in the Declaration
of Trust of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the obligation from
the shareholders or any shareholder of the Issuer. Nor shall the
Distributor seek satisfaction of any such obligation from the Trustees or
any individual Trustee of the Issuer. The Distributor understands that the
rights and obligations of each series of shares of the Issuer under the
Issuer's Declaration of Trust are separate and distinct from those of any
and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and the Distributor has executed this instrument in its name and behalf,
and its corporate seal affixed, by one of its officers duly authorized, as
of the day and year first above written.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
Attest: /s/Arthur S. Loring By /s/ J. Gary Burkhead
Secretary
FIDELITY DISTRIBUTORS CORPORATION
Attest: /s/Arthur S. Loring By /s/ John L. O'Brien
Clerk
gd-useip/dl
LG941050033
Exhibit 9(b)
FIDELITY INSTITUTIONAL TRUST
AMENDED TRANSFER AGENT AGREEMENT WITH
FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY
Required authorizations and approvals having been obtained, amendment in
its entirety is hereby made this 1st day of June, 1989 by and between FMR
Corp., a Massachusetts corporation, and its division, Fidelity Investments
Institutional Operations Company ("FIIOC"), and Fidelity Institutional
Trust (the "Fund"), a Massachusetts business trust which may issue one or
more series of shares of beneficial interest ("Portfolio(s)") all with
principal offices at 82 Devonshire Street, Boston, Massachusetts, of the
existing Transfer Agent Agreement with FMR Corp. and FIIOC, as set forth
below.
Reference to the Fund, when applicable to one or more Portfolios of the
Fund, shall refer to any such Portfolio;
1. Appointments. The Fund hereby appoints and employs FIIOC as agent to
provide those services described in the schedules attached to this
Agreement for each of the Portfolio(s) of the Fund upon notice in writing
that a Portfolio requests such services. FIIOC shall perform the
obligations and the services set forth in the attached schedules upon the
terms and conditions hereinafter set forth.
2. Documents. The Fund has furnished FIIOC copies of the Fund's
Declaration of Trust, Bylaws, Advisory and Service or Management Contract,
Custodian Contract, current prospectus and Statement of Additional
Information (the "Prospectus"), any other governing documents and all forms
relating to any plan, program or service offered by the Fund. The Fund
shall furnish promptly to FIIOC a copy of any amendment or supplement to
the above-mentioned documents. The Fund shall furnish to FIIOC any
additional documents requested by it as necessary for it to perform the
services required hereunder.
3. Services to be Performed. FIIOC shall be responsible for performing
as agent, as of the date of this Agreement, the services described in the
following schedules attached hereto and made a part hereof, as said
schedules may be amended from time to time:
Schedule A: Transfer agent, dividend and distribution disbursing agent,
and shareholders' servicing agent.
Operating procedures and standards to be followed for each function may be
established from time to time by agreement between the Fund and FIIOC. The
above schedules may be amended or deleted, or additional schedules may be
included, as deemed necessary from time to time by agreement between the
Fund and FIIOC. Deletion of any schedule shall be in accordance with the
termination provisions of Section 15 of this Agreement. Each schedule and
any amendments thereto shall be dated and signed by the parties to this
Agreement.
4. Record Keeping and Other Information. FIIOC shall create and maintain
all records required by all applicable laws, rules and regulations relating
to the services to be performed as set forth in the schedules attached
hereto, including but not limited to records required by Section 31(a) of
the Investment Company Act of 1940 and the Rules thereunder, as the same
may be amended from time to time. All records shall be the property of the
Fund and shall be available for inspection and use by the Fund at all
times. Where applicable, such records shall be maintained by FIIOC for the
periods and in the places required by Rule 31a-2 under the Investment
Company Act of 1940.
5. Audits, Inspections and Visits. FIIOC shall make available during
regular business hours all records and other data created and maintained
pursuant to this Agreement for reasonable audit and inspection by the Fund,
any agent or person designated by the Fund, or any regulatory agency having
authority over the Fund. Upon reasonable notice by the Fund, FIIOC shall
make available during regular business hours its facilities and premises
employed in connection with its performance of this Agreement for
reasonable visits by the Fund, any agent or person designated by the Fund,
or any regulatory agency having authority over the Fund.
6. Compensation. For the performance of its obligations hereunder, the
Fund shall pay FIIOC in accordance with the fee arrangements described in
each schedule attached hereto.
7. Appointment of Agents. FIIOC, at its expense, may at any time or times
in its discretion appoint (and may at any time remove) one or more other
parties as Agent to perform any or all of the services specified hereunder
and carry out such provisions of this Agreement as FIIOC may from time to
time direct; provided, however, that the appointment of any such Agent
shall not relieve FIIOC of any of its responsibilities or liabilities
hereunder.
8. Use of FIIOC's Name. The Fund shall not use the name of FIIOC in any
Prospectus, sales literature or other material relating to the Fund in a
manner not consented to prior to use; provided, however, that FIIOC shall
approve all uses of its name which merely refer in accurate terms to its
appointments, duties or fees hereunder or which are required by the
Securities and Exchange Commission or a state securities commission; and
further provided, that in no event shall such approval be unreasonably
withheld.
9. Use of Fund's Name. FIIOC shall not use the name of the Fund or
material relating to the Fund on any forms (including any checks, bank
drafts or bank statements) for other than internal use in a manner not
consented to prior to use, provided, however, that the Fund shall approve
all uses of its name which merely refer in accurate terms to the
appointment of FIIOC hereunder or which are required by the Securities and
Exchange Commission or a state securities commission; and further, provided
that in no event shall such approval be unreasonably withheld.
10. Security. FIIOC represents and warrants that, to the best of its
knowledge, the various procedures and systems which FIIOC has implemented
with regard to the safeguarding from loss or damage attributable to fire,
theft or any other cause (including provision for twenty-four hours a day
restricted access) of the Fund's blank checks, certificates, records and
other data and FIIOC's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate,
and that it will make such changes therein from time to time as in its
judgment are required for the secure performance of its obligations
hereunder. FIIOC shall review such systems and procedures on a periodic
basis and the Fund shall have access to review these systems and
procedures.
11. Insurance. FIIOC shall maintain insurance of the types and in the
amounts deemed by it to be appropriate and shall notify the Fund should any
of its insurance coverage be changed for any reason. Such notification
shall include the date of change and the reason or reasons therefor. FIIOC
shall notify the Fund of any material claims against FIIOC, whether or not
they may be covered by insurance, and shall notify the Fund from time to
time as may be appropriate of the total outstanding claims made by FIIOC
under its insurance coverage. To the extent that policies of insurance may
provide for coverage of claims for liability or indemnity by the parties
set forth in this Agreement, the contracts of insurance shall take
precedence, and no provision of this Agreement shall be construed to
relieve an insurer of any obligation to pay claims to the Fund, FIIOC or
other insured party which would otherwise be a covered claim in the absence
of any provision of this Agreement.
12. Indemnification.
A. The Fund shall indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Fund, including by a shareholder, which names FIIOC and/or the Fund as
a party and is not based on and does not result from FIIOC's willful
misfeasance, bad faith or negligence or reckless disregard of duties, and
arises out of or in connection with FIIOC's performance hereunder; or
(2) any claim, demand, action or suit (except to the extent contributed
to by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Fund, or from
FIIOC's acting upon any instruction(s) reasonably believed by it to have
been executed or communicated by any person duly authorized by the Fund, or
as a result of FIIOC's acting in reliance upon advice reasonably believed
by FIIOC to have been given by counsel for the Fund, or as a result of
FIIOC's acting in reliance upon any instrument or stock certificate
reasonably believed by it to have been genuine and signed, countersigned or
executed by the proper person.
B. FIIOC shall indemnify and hold the Fund harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from any claim, demand, action or suit brought by
any person other than FIIOC, which names the Fund and/or FIIOC as a party
and is based upon and arises out of acts, errors or omissions of FIIOC
constituting negligence, lack of good faith or willful misconduct in the
performance of FIIOC's duties under this Agreement.
In the event that either party requests the other to indemnify or hold it
harmless hereunder, the party requesting indemnification (the "Indemnified
Party") shall inform the other party (the "Indemnifying Party") of the
relevant facts known to Indemnified Party concerning the matter in
question. The Indemnified Party shall use reasonable care to identify and
promptly to notify the Indemnifying Party concerning any matter which
presents, or appears likely to present, a claim for indemnification. The
Indemnifying Party shall have the election of defending the Indemnified
Party against any claim which may be the subject of indemnification or of
holding the Indemnified Party harmless hereunder. In the event the
Indemnifying Party so elects, it will so notify the Indemnified Party and
thereupon the Indemnifying Party shall take over defense of the claim and,
if so requested by the Indemnifying Party, the Indemnified Party shall
incur no further legal or other expenses related thereto for which it shall
be entitled to indemnity or to being held harmless hereunder; provided,
however, that nothing herein shall prevent the Indemnified Party from
retaining counsel at its own expense to defend any claim. Except with the
Indemnifying Party's prior written consent, the Indemnified Party shall in
no event confess any claim or make any compromise in any matter in which
the Indemnifying Party will be asked to indemnify or hold Indemnified Party
harmless hereunder.
13. Acts of God, etc. FIIOC shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot,
or failure of communication equipment of common carriers or power supply.
In the event of equipment breakdowns beyond its control, FIIOC shall, at no
additional expense to the Fund, take reasonable steps to minimize service
interruptions and mitigate their effects but shall have no liability with
respect thereto. FIIOC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment.
14. Amendments. FIIOC and the Fund shall regularly consult with each
other regarding FIIOC's performance of its obligations and its compensation
hereunder. In connection therewith, the Fund shall submit to FIIOC at a
reasonable time in advance of filing with the Securities and Exchange
Commission copies of any amended or supplemented registration statements
(including exhibits) under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and, a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Fund. Any change
in such material which would require any change in FIIOC's obligations
hereunder shall be subject to FIIOC's approval, which shall not be
unreasonably withheld. In the event that a change in such documents or in
the procedures contained therein materially increases the cost to FIIOC of
performing its obligations hereunder, FIIOC shall be entitled to receive
reasonable compensation therefor.
15. Duration, Termination, etc. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged or terminated orally,
but only by written instrument which shall make specific reference to this
Agreement and which shall be signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
This Agreement shall continue in effect until December 31, 1989 and
indefinitely thereafter so long as such continuance is approved at least
annually by vote of the Fund's Board of Trustees; provided, however, that
this Agreement may be terminated at any time by six months' written notice
given by FIIOC to the Fund or six months' written notice given by the Fund
to FIIOC; and provided further that this Agreement may be terminated
immediately at any time for cause either by the Fund or by FIIOC in the
event that such cause remains unremedied for a reasonable period of time
not to exceed ninety days after receipt of written specification of such
cause. Any such termination shall not affect the rights and obligations of
the parties under paragraph 12 hereof.
Upon the termination hereof, the Fund shall pay to FIIOC such compensation
as may be due for the period prior to the date of such termination. In the
event that the Fund designates a successor to any of FIIOC's obligations
hereunder, FIIOC shall, at the expense and direction of the Fund, transfer
to such successor all relevant books, records and other data established or
maintained by FIIOC hereunder (including, if FIIOC has been acting as
Transfer Agent, a certified list of the shareholders of the Fund with name,
address, and, if provided, taxpayer identification or Social Security
number, and a complete record of the account of each shareholder). To the
extent that FIIOC incurs expenses related to a transfer of responsibilities
to a successor, FIIOC shall be entitled to be reimbursed for such expenses,
including any out-of-pocket expenses reasonably incurred by FIIOC in
connection with the transfer.
16. Shareholder Liability. FMR Corp. and FIIOC are hereby expressly put
on notice of the limitation of shareholder liability as set forth in the
Declaration of Trust of the Fund and agree that obligations assumed by the
Fund pursuant to this Agreement shall be limited in all cases to the
Portfolio and its assets. FMR Corp. and FIIOC agree that they shall not
seek satisfaction of any such obligation from the shareholders or any
individual shareholder of the Fund, nor from the Trustees or any individual
Trustee of the Fund.
17. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with
and governed by the laws of the Commonwealth of Massachusetts. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two counterparts, each of which taken together shall
constitute one and the same instrument. FMR Corp. and Service understand
that the rights and obligations of each Portfolio under the Declaration of
Trust are separate and distinct from those of any and all other Portfolios.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
FMR CORP.
By
Treasurer
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By
President
FIDELITY INSTITUTIONAL TRUST
By
Treasurer
ta2fidit/cl
- -6-
Dated June 1, 1989
FIDELITY INSTITUTIONAL TRUST: U.S. BOND INDEX PORTFOLIO (the "Portfolio")
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING AGENT, AND
SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: FIIOC shall be responsible for the following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption
instructions (including redemptions by check transmitted to FIIOC by any
duly appointed check processing agent) and process payments for redemption
to shareholders in accordance with the terms, conditions and rules
governing each shareholder's account as set forth in the Portfolio's
prospectus, statement of additional information and each shareholder's
account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A:
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by other divisions and
subsidiaries of FMR Corp. or any other entity to whom FIIOC has delegated
all or a portion of its duties under the Agreement; but such term shall not
include an account maintained on any subaccounting system operated by
broker, bank or other intermediary who is acting on behalf of its customer
and who is not acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, a Centralized Service Institutional Trading Account, a
Remote Institutional Trading Account or an Institutional Employee Benefit
Account.
"Centralized Service Institutional Trading Account" shall mean each
account of the Portfolio maintained on behalf of an institutional customer
(such as a bank trust department, corporation or investment adviser), or
its clients, who has no remote system access and for whom FIIOC inputs all
account activity information and performs all account maintenance
functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Remote Institutional Trading Account" shall mean any account or accounts
of the Portfolio maintained on behalf of an institutional customer (such as
a bank, investment adviser, insurance company or law firm), or its clients,
who utilizes remote system access equipment to input account activity
information and to perform account maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates of $7.00 for Basic Retail Accounts with a value of less than $2,000
and $21.00 for Bond Funds for Basic Retail Accounts with a value of $2,000
or more.
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee of $5.00 for each transaction described in Exhibit A-1 to this
Schedule A.
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $11.00 for each USA
Account.
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee,
in lieu of the fees set forth in II.B.(1)(b), of $0.65 for each transaction
described in Exhibit A-2 to this Schedule A.
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Centralized Service Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $40.00 for each
Centralized Service Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $11.50 for each transaction of such
Centralized Service Institutional Trading Account described in Exhibit A-1
to this Schedule A.
(4) Remote Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $24.00 for each Remote
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $5.00 for each transaction of such Remote
Institutional Trading Account described in Exhibit A-1 to this Schedule A.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.35%.
C. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter
through December 31, even though the value of such account may become zero.
The net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under the Agreement. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is cancelled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
D. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on June 1, 1989, as disclosed in the
Portfolio's prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently cancelled because the check was dishonored by the
shareholder's bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending cancelled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Centralized Service
Institutional Trading Accounts, Remote Institutional Trading Accounts and
Institutional Employee Benefit Accounts, associated with: (1) the
printing, handling, forwarding or mailing of shareholder reports and
notices to shareholders who own shares through an account of a broker, bank
or other intermediary if FIIOC is not compensated by an account fee for
each sub-account, (2) the charges of any bank for establishing and
operating accounts for the receipt of funds for share purchases and the
payment of dividends, distributions and redemption proceeds, (3) all fees
and expenses of registering shares for sale under the state securities
laws, and (4) the holding of annual or special meetings of Portfolio
shareholders, including: the costs of typesetting, printing, postage and
mailing notices, proxy cards and proxy statements (and, if required, annual
reports sent to shareholders who have opened accounts subsequent to the
last regular mailing date of such reports to shareholders); the fees and
other disbursements of any agent hired to mail proxy materials and/or
tabulate
proxies; all charges incurred by any proxy soliciting agent; the reasonable
and customary fees and handling charges of brokers, banks and other
intermediaries for forwarding proxy materials; and all other customary
expenses associated with the holding of shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Co. with which FIIOC
has Transfer Agent Agreements (the "Funds") a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR CORP.
By
Treasurer
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By
President
FIDELITY INSTITUTIONAL TRUST:
U.S. BOND INDEX PORTFOLIO
By
Treasurer
sa2itbi/cl
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by FIIOC under the
Transfer Agent Agreement with Fidelity Investments Institutional Operations
Company
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
sa2itbi/cl
Dated June 1, 1989
FIDELITY INSTITUTIONAL TRUST: U.S. EQUITY INDEX PORTFOLIO (the "Portfolio")
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING AGENT, AND
SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: FIIOC shall be responsible for the following:
A. FIIOC shall administer and/or perform transfer agent functions for the
Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption
instructions (including redemptions by check transmitted to FIIOC by any
duly appointed check processing agent) and process payments for redemption
to shareholders in accordance with the terms, conditions and rules
governing each shareholder's account as set forth in the Portfolio's
prospectus, statement of additional information and each shareholder's
account application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. FIIOC shall act as service agent of the Portfolio in connection with
dividend and capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which FIIOC serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, FIIOC shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay FIIOC in accordance with this Schedule A:
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
FIIOC or on a transfer agency system operated by other divisions and
subsidiaries of FMR Corp. or any other entity to whom FIIOC has delegated
all or a portion of its duties under the Agreement; but such term shall not
include an account maintained on any subaccounting system operated by
broker, bank or other intermediary who is acting on behalf of its customer
and who is not acting pursuant to a delegation of duties by FIIOC.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, a Centralized Service Institutional Trading Account, a
Remote Institutional Trading Account or an Institutional Employee Benefit
Account.
"Centralized Service Institutional Trading Account" shall mean each
account of the Portfolio maintained on behalf of an institutional customer
(such as a bank trust department, corporation or investment adviser), or
its clients, who has no remote system access and for whom FIIOC inputs all
account activity information and performs all account maintenance
functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Remote Institutional Trading Account" shall mean any account or accounts
of the Portfolio maintained on behalf of an institutional customer (such as
a bank, investment adviser, insurance company or law firm), or its clients,
who utilizes remote system access equipment to input account activity
information and to perform account maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates of $7.00 for Basic Retail Accounts with a value of less than $2,000
and $19.00 for Equity Funds for Basic Retail Accounts with a value of
$2,000 or more.
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee of $5.00 for each transaction described in Exhibit A-1 to this
Schedule A.
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $11.00 for each USA
Account.
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee,
in lieu of the fees set forth in II.B.(1)(b), of $0.65 for each transaction
described in Exhibit A-2 to this Schedule A.
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Centralized Service Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $40.00 for each
Centralized Service Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $11.50 for each transaction of such
Centralized Service Institutional Trading Account described in Exhibit A-1
to this Schedule A.
(4) Remote Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $24.00 for each Remote
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $5.00 for each transaction of such Remote
Institutional Trading Account described in Exhibit A-1 to this Schedule A.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.35%.
C. Schedule of Payments
FIIOC shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter
through December 31, even though the value of such account may become zero.
The net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. FIIOC may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom FIIOC has delegated all or a portion
of its duties under the Agreement. Transaction fees with respect to an
account are billable by FIIOC as of the end of each month in which the
transaction occurs. In the event that a transaction is cancelled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
D. Shareholder Charges - FIIOC shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - FIIOC may from time to time receive, through payment by
shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to FIIOC pursuant to this Agreement in accordance
with the allocation authorization by the Board of Trustees of the Fund.
(2) Wire fees - any fees in effect on June 1, 1989, as disclosed in the
Portfolio's prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
FIIOC when a shareholder purchases shares by check and the purchase is
subsequently cancelled because the check was dishonored by the
shareholder's bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
FIIOC to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by FIIOC or any
affiliate of FIIOC for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. FIIOC will be responsible for all expenses, costs
and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of FIIOC
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending cancelled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Centralized Service
Institutional Trading Accounts, Remote Institutional Trading Accounts and
Institutional Employee Benefit Accounts, associated with: (1) the
printing, handling, forwarding or mailing of shareholder reports and
notices to shareholders who own shares through an account of a broker, bank
or other intermediary if FIIOC is not compensated by an account fee for
each sub-account, (2) the charges of any bank for establishing and
operating accounts for the receipt of funds for share purchases and the
payment of dividends, distributions and redemption proceeds, (3) all fees
and expenses of registering shares for sale under the state securities
laws, and (4) the holding of annual or special meetings of Portfolio
shareholders, including: the costs of typesetting, printing, postage and
mailing notices, proxy cards and proxy statements (and, if required, annual
reports sent to shareholders who have opened accounts subsequent to the
last regular mailing date of such reports to shareholders); the fees and
other disbursements of any agent hired to mail proxy materials and/or
tabulate
proxies; all charges incurred by any proxy soliciting agent; the reasonable
and customary fees and handling charges of brokers, banks and other
intermediaries for forwarding proxy materials; and all other customary
expenses associated with the holding of shareholder meetings.
B. Reports. Once each year, FIIOC shall submit to the Fund and the other
funds advised by Fidelity Management & Research Co. with which FIIOC
has Transfer Agent Agreements (the "Funds") a report setting forth the
total amount of costs and expenses incurred by FIIOC in the performance of
its obligations to the Funds under the Transfer Agent Agreements and the
total amounts payable by the Funds for such services. FIIOC shall also
provide annually a report by an independent certified public accounting
firm (who may be the auditors of FIIOC) on FIIOC's income and expenses.
The term "Transfer Agent Agreements" shall mean this agreement between
FIIOC and the Fund and agreements of like tenor between FIIOC and other
Funds.
FMR CORP.
By
Treasurer
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By
President
FIDELITY INSTITUTIONAL TRUST:
U.S. EQUITY INDEX PORTFOLIO
By
Treasurer
sa2itei/cl
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by FIIOC under the
Transfer Agent Agreement with Fidelity Investments Institutional Operations
Company
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
sa2itei/cl
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by FIIOC under the
Transfer Agent Agreement with Fidelity Investments Institutional Operations
Company in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
sa2itei/cl
Exhibit A-2
USA Account Transaction Fees
The following monetary transactions may be billed by FIIOC under the
Transfer Agent Agreement with Fidelity Investments Institutional Operations
Company in connection with a USA Account:
Cash Advances - Each cash advance to a shareholder from a participating
financial institution for which the debit balance in the Fidelity USA
account is satisfied by a redemption of Portfolio shares.
Checks Paid - Each check drawn by a shareholder (other than a check issued
in connection with the Fidelity USA bill payment program) which is
presented for payment and results in a redemption of Portfolio shares.
Checks Received - Each check which is deposited into a Fidelity USA account
and results in the purchase of Portfolio shares.
Debit Card Purchases - Each use of a debit (or credit) card issued to a
Fidelity USA account participant to pay for goods or services which results
in the redemption of Portfolio shares in an account sufficient to cover the
debit (or credit) card charge.
Direct Deposit - Each pre-authorized deposit of funds through a
participating financial institution by a Fidelity USA program participant
to such program participant's Fidelity USA account which results in a
purchase of Portfolio shares.
EFT Received - Each electronic transfer of funds to a Fidelity USA account
by a Fidelity USA program participant which results in a purchase of
Portfolio shares.
EFT Paid - Each electronic transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Wire Received - Each wire transfer of funds by a Fidelity USA program
participant to a Fidelity USA account, which results in a purchase of
Portfolio shares.
Wire Sent - Each wire transfer of funds by a Fidelity USA program
participant from such program participant's Fidelity USA account, which
results in a redemption of Portfolio shares.
Automatic Teller - Each use of an automatic teller machine by a Fidelity
USA program participant to secure cash or to transfer funds, which results
in a redemption of Portfolio shares.
sa2itbi/cl
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectuses constituting part of this
Post-Effective Amendment No. 17 to the registration statement on Form N-1A
(the "Registration Statement") of our reports dated April 19, 1994 and
April 20, 1994, relating to the financial statements and financial
highlights of Fidelity U.S. Equity Index Porffolio and Fidelity U.S. Bond
Portfolio, respectively, each a portfolio of Fidelity Institutional Trust,
which are included in such Registration Statement. We further consent to
the references to us under the headings "Auditor" in the Statements of
Additional Information and "Financial Highlights" in the Prospectuses.
PRICE WATERHOUSE
/s/PRICE WATERHOUSE
Boston, Massachusetts
April 22, 1994
Exhibit 13
November 23, 1987
Fidelity Institutional Trust:
Fidelity U.S. Equity Portfolio
82 Devonshire Street
Boston, MA 02109
Gentlemen:
Please be advised that the 5,000 shares of beneficial interest of Fidelity
Institutional Trust: Fidelity U.S. Equity Portfolio which we have today
purchased from you were purchased as an investment with no present
intention of redeeming or reselling such shares.
Very truly yours,
/s/Arthur S. Loring
Arthur S. Loring
Vice President
Exhibit 15(b)
DISTRIBUTION AND SERVICE PLAN
of Fidelity Institutional Trust:
U.S. Equity Index Portfolio
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Institutional Trust: U.S. Equity Index Portfolio (the "Portfolio"), a
series of Fidelity Institutional Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest ("shares").
Under the agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection
with the offering of shares of the Portfolio for sale to the public. It is
understood that the Adviser may reimburse the Distributor for these
expenses from any source available to it, including management fees paid to
it by the Portfolio.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until July 31, 1987, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust, any obligations assumed by the
Portfolio pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to the Portfolio and its assets, and shall
not constitute obligations of any other series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
d&s-usei/dl
Exhibit 16(a)
FIDELITY U.S. EQUITY INDEX PORTFOLIO
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
The historical listings supplied on the following pages show the net asset
values, dividends, capital gain distributions and reinvestment prices used
in calculating total returns for the period shown in the Statement of
Additional Information. Cumulative Total Returns and their income and
capital components are described in the Portfolio's Statement of Additional
Information, and are based on historical listings of this type. Cumulative
Total Returns may include or omit the effect of reinvestment of income or
capital gain distributions and of subsequent investments or redemptions.
For example; the Cumulative Total Return for the life of the Portfolio
shown in the Statement of Additional Information on page _____ is the
percentage change in the total value of a hypothetical investment including
the effect of the reinvestment of all income and capital gain
distributions.
Average Annual Returns are calculated according to the following formula:
Average Annual Return = (1 + Cumulative Return) 1/n -1 where n = the
number of years in the base period.
