SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-15983) UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 20 [x]
and
REGISTRATION STATEMENT (No. 811-5251) UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 20 [x]
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)
(X) On (April 19, 1995) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) On ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) 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, 1995.
FIDELITY INSTITUTIONAL TRUST:
FIDELITY U. S. BOND INDEX PORTFOLIO
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 a,b Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a,b Financial Highlights
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and Investment
Practices; Fundamental Investment Policies and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and its Affiliates
b(ii) FMR and Its Affiliates; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c FMR and Its Affiliates
d Cover Page; Charter; Breakdown of Expenses; FMR and Its Affiliates
e FMR and Its Affiliates, Breakdown of Expenses
f Expenses
g Expenses; FMR and Its Affiliates, Breakdown of Expenses
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii) *
b *
c How to Buy Shares; Exchange Restrictions
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details
f,g Dividends, Capital Gains, and Taxes
7 a Cover page; FMR and its Affiliates
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e Breakdown of Expenses
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not Applicable
FIDELITY
U.S. BOND INDEX
PORTFOLIO
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated April 19, 1995. The SAI
has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, or for information or assistance in
opening a new account , call the appropriate number listed below or
call your Investment Professional.
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact that institution
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
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.
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.
UBI-pro-495
A fund of Fidelity Institutional Trust
The fund 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).
PROSPECTUS
DATED APRIL 19, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
FEBRUARY 28, 1995
CONTENTS
PROSPECTUS
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KEY FACTS WHO MAY WANT TO INVEST
EXPENSES The fund's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
PERFORMANCE How the fund has done over time.
THE FUND IN DETAIL CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The fund's overall
approach to investing.
BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and making
additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
ANNUAL REPORT
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PERFORMANCE A-1 How the fund has done over time.
FUND TALK A-4 The manager's review of fund performance, strategy
and outlook.
INVESTMENTS A-6 A complete list of the fund's investments with their
market values.
FINANCIAL STATEMENTS A-11 Statement of assets and liabilities, operations, and
changes in net assets.
NOTES A-14 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-16 The auditor's opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who seek investment
results that correspond to those of an index that includes various types of
domestic and foreign medium to high quality debt obligations, with
reasonable consistency over time .
Because the fund seeks to track, rather than beat, the performance of the
Aggregate Bond Index , the fund is not managed in the same manner as
other mutual funds. FMR generally does not judge the merits of any
particular debt security as an investment. Therefore, you should not
expect to achieve the potentially greater results that could be obtained by
a fund that aggressively seeks income.
The value of the fund's investments and the income the y generate
vary from day to day, and generally reflect changes in interest rates,
market conditions, and other economic and political news. The fund's
investments are also subject to prepayments of principal, which can lower
the fund's yield, particularly in periods of declining interest rates.
The fund is not in itself a balanced investment plan. You should
consider your investment objective and tolerance for risk when making an
investment decision. When you sell your fund shares, they may be worth
more or less than what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge on redemptions
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). The fund
also incurs other expenses for services such as maintaining shareholder
records, and furnishing shareholder account statements and financial
reports.
The fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of the fund, and
are calculated as a percentage of average net assets.
Management fee (after reimbursement) 0.0 7
%
12b-1 fee (Distribution Fee) None
Other expenses 0. 25
%
Total operating expenses (after reimbursement) 0.32
%
EXPENSE TABLE 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 3 5 10
Year Years Years Years
$ 3 $ 10 $ 18 $ 41
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
Subject to revision upon 90 days' notice to shareholders, FMR has
voluntarily agreed to reimburse the fund to the extent that total operating
expenses are in excess of 0.32% of its average net assets. If this
agreement were not in effect, the management fee, other expenses, and total
operating expenses would have been 0.32%, 0.25 %, and
0. 57% , respectively, as percentages of average net assets .
Interest, taxes, brokerage commissions, or extraordinary expenses are not
included in this expense limitation.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows and the fund's financial
statements are included in the fund's Annual Report and have been
audited by Price Waterhouse LLP, independent accountants. Their
report on the financial statements and financial highlights is included in
the Annual Report. The financial statements, the financial
highlights, and the report are attached.
SELECTED PER-SHARE DATA
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<C> <C> <C> <C> <C> <C>
1.Years ended February 28
1990D 1991E 1992E 1993F 1994 1995
2.Net asset value, beginning of period
$ 10.000 $ 10.040 $ 10.710 $ 10.910 $ 11.070 $ 10.830
3.Income from Investment Operations
.559 .863 .839 .260 .697 .718
Net investment income
4. Net realized and unrealized gain (loss) on
.040 .668 .277 .324 (.110) (.542)
investments
5. Total from investment operations
.599 1.531 1.116 .584 .587 .176
6.Less Distributions
(.559) (.861) (.836) (.254) (.727) (.756)
From net investment income
7. From net realized gain on investments
- -- -- (.080) (.170) (.070) --
8. In excess of net realized gain on investments
- -- -- -- -- (.030) --
9. Total distributions
(.559) (.861) (.916) (.424) (.827) (.756)
10.Net asset value, end of period
$ 10.040 $ 10.710 $ 10.910 $ 11.070 $ 10.830 $ 10.250
11.Total returnB,C
6.14% 15.86% 10.84% 5.50% 5.38% 1.90%
12.RATIOS AND SUPPLEMENTAL DATA
13.Net assets, end of period (000 omitted)
$ 25,600 $ 39,144 $ 86,149 $ 123,351 $ 288,504 $ 354,682
14.Ratio of expenses to average net assets
.32%A .32% .32% .32%A .32% .32%
15.Ratio of expenses to average net assets before
.84%A .90% .83% .87%A .66% .57%
expense reductions
16.Ratio of net investment income to average net assets
8.62%A 8.33% 7.70% 7.34%A 6.93% 7.58%
17.Portfolio turnover rate
62%A 50% 113% 89%A 160% 73%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS ON PAGE A-15).
D MARCH 8, 1990 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1990.
E FOR THE YEAR ENDED OCTOBER 31.
F FOR THE FOUR MONTHS ENDED FEBRUARY 28.
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The total
returns and yields that follow are based on historical fund results and do
not reflect the effect of taxes.
The fund's fiscal year runs from March 1 to February 28. The tables below
show the fund's performance history compared to the Aggregate Bond Index
and a measure of inflation.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended
Past 1
Life of
February 28 , 1995 year [C] fund [A][C]
U.S. Bond Index 1.90% 9.11%
Lehman Brothers
1.78% 8.92% [B]
Aggregate Bond Index
Consumer Price
2.86% 3.34% [B]
Index
CUMULATIVE TOTAL RETURNS
Fiscal periods ended
Past 1
Life of
February 28 , 1995 year[C] fund[A][C]
U.S. Bond Index 1.90% 54.42%
Lehman Brothers
1.78% 52.22% [B]
Aggregate Bond Index
Consumer Price
2.86% 17.89% [B]
Index
[A] FROM MARCH 8, 1990
[B] TOTAL RETURNS ARE FROM MONTH END CLOSEST TO COMMENCEMENT OF OPERATIONS.
[C] IF FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THESE PERIODS,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
For the 30-day period ended February 28, 1995, the fund's 30-day yield was
7.50 %.
If FMR had not reimbursed certain fund expenses during these periods, the
30-day yield would have been 7.25 %.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
LEHMAN BROTHERS AGGREGATE BOND INDEX , comprised of the Lehman
Brothers Government Bond Index, Corporate Bond Index and Mortgage-Backed
Securities 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 fund's returns, its returns do
not include the effect of paying brokerage commissions and other costs of
investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Client Services at the appropriate
number listed on page .
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL
CHARTER
U.S. BOND INDEX IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. The fund is a diversified
fund of Fidelity Institutional Trust, an open-end management investment
company organized as a Massachusetts business trust on July 21, 1987.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent, will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
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, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs.
As of February 28, 1995, FMR advised funds having approximately
20 million shareholder accounts with a total value of more than
$ 270 billion.
Christine Thompson is vice president and manager of U.S. Bond Index,
which she has managed since 1990. She is also responsible for the bond
portions of Balanced and Puritan. Ms. Thompson joined Fidelity in 1985.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corp oration (FDC) distributes and markets
Fidelity's funds and services. Fidelity Investments Institutional
Operations Company (FIIOC) performs transfer agent servicing functions for
the fund.
FMR Corp. is the ultimate parent company of FMR. Through ownership of
voting common stock, members of the Edward C. Johnson 3d family form a
controlling group with respect to FMR Corp. Changes may occur in the
Johnson family group, through death or disability, which would result in
changes in each individual family member ' s holding of stock. Such
changes could result in one or more family members becoming holders of over
25% of the stock. FMR Corp. has received an opinion of counsel that changes
in the composition of the Johnson family group under these circumstances
would not result in the termination of the fund's management or
distribution contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The fund seeks to match the performance of the Aggregate Bond Index while
keeping expenses low. FMR normally invests at least 80% of its assets in
securities included in the Aggregate Bond Index. If the fund's assets drop
below $50 million, the percentage of the fund's assets invested in such
securities may drop to as low as 65%.
The Aggregate Bond Index is comprised of the Lehman Brothers Government
Bond Index, Corporate Bond Index and Mortgage-Backed Securities Index.
Inclusion of a security in the Aggregate Bond Index in no way implies an
opinion by Lehman Brothers, Inc. as to its attractiveness or
appropriateness as an investment for the fund. Lehman Brothers, Inc. is
neither an affiliate nor a sponsor of the fund and inclusion of a security
in the Aggregate Bond Index does not imply that it is a good investment. In
seeking a 90% or better correlation of the fund's performance to that of
the Aggregate Bond Index, the fund utilizes a "passive" or "indexing"
approach and tries to allocate its assets similarly to those of the
Aggregate Bond Index. The fund's composition may not always be identical to
that of the Aggregate Bond Index.
FMR will attempt to maintain the weightings of securities held by the fund
to correspond to their respective weighting in the Aggregate Bond Index.
FMR expects to be able to invest within +/-10% of the actual Aggregate Bond
Index weighting of broad market sectors.
FMR monitors the correlation between the performance of the fund and the
Aggregate Bond Index on a regular basis. In the unlikely event that the
fund cannot achieve a correlation of 90% or better, the Trustees will
consider alternative investment arrangements. The fund's ability to
duplicate the performance of the Aggregate Bond Index will depend, to some
extent, on the size and frequency of cash flow into and out of the fund.
The fund's yield and share price change daily and are based on changes in
domestic or foreign interest rates and in an issuer's creditworthiness. In
general, bond prices rise when interest rates fall, and vice versa. This
effect is usually more pronounced for longer-term securities. General
economic and political factors in the various world markets can also impact
the value of your investment. FMR may use various investment techniques to
hedge the fund's risk, but there is no guarantee that these strategies will
work as intended. When you sell your shares, they may be worth more or less
than what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
investment-grade money market or short-term debt instruments for temporary,
defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, and strategies FMR may employ in
pursuit of the fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of the fund's policies
and limitations and more detailed information about the fund's investments
is contained in the fund's SAI. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
fund achieve its goal. Current holdings and recent investment strategies
are described in the fund's financial reports, which are sent to
shareholders twice a year. For a free SAI , call the appropriate
number listed on page P- 12.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
MONEY MARKET INSTRUMENTS are high-quality instruments that present minimal
credit risk. They may include U.S. Government obligations, commercial paper
and other short-term corporate obligations, and certificates of deposit,
bankers' acceptances, bank deposits, and other financial institution
obligations. These instruments may carry fixed or variable interest rates.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. G overnment. Not all U.S. G overnment securities are
backed by the full faith and credit of the United States. For example,
securities issued by the Federal Farm Credit Bank or by the Federal
National Mortgage Association are supported by the instrumentality's right
to borrow money from the U.S. Treasury under certain circumstances.
However, securities issued by the Financing Corporation are supported only
by the credit of the entity that issued them.
EXPOSURE TO FOREIGN MARKETS. Foreign securities and securities issued by
U.S. entities with substantial foreign operations may involve additional
risks and considerations. These include risks relating to political or
economic conditions in foreign countries, withholding or other taxes,
operational risks, increased regulatory burdens, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
Additionally, governmental issuers of foreign securities may be unwilling
to repay principal and interest when due, and may require that the
conditions for payment be renegotiated. All of these factors can make
foreign investments, especially those in developing countries, more
volatile.
RESTRICTION: The fund may only invest in U.S. dollar-denominated foreign
securities.
AMERICAN DEPOSITARY RECEIPTS AND EUROPEAN DEPOSITARY RECEIPTS (ADRS AND
EDRS) are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
ASSET-BACKED SECURITIES represent interests in pools of lower rated debt
securities, or consumer loans. The value of these securities may be
significantly affected by changes in the market's perception of the issuers
and the creditworthiness of the parties involved.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized
mortgage obligations and stripped mortgage-backed securities. Mortgage
securities may be issued by the U.S. G overnment or by private
entities. For example, Ginnie Maes are interests in pools of mortgage loans
insured or guaranteed by a U.S. G overnment agency. Because mortgage
securities pay both interest and principal as their underlying mortgages
are paid off, they are subject to prepayment risk. This is especially true
for stripped securities. Also, the value of a mortgage security may be
significantly affected by changes in interest rates. Some mortgage
securities may have a structure that makes their reaction to interest rates
and other factors difficult to predict, making their value highly volatile.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt
securities, although they may be more volatile and the value of certain
types of stripped securities may move in the same direction as interest
rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and selling
options and futures contracts, entering into swap agreements and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other borrower.
They have additional risks beyond conventional debt securities because they
may entail less legal protection for the fund, or there may be a
requirement that the fund supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some securities, including illiquid securities, may be subject
to legal restrictions. Difficulty in selling securities may result in a
loss or may be costly to the fund.
RESTRICTIONS. The fund may not purchase a security if, as a result, more
than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the fund's yield.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS. With respect to 75% of its total assets, the fund may not
purchase a security if, as a result, more than 5% would be
invested in the securities of any one issuer. This limitation
does not apply to U.S. G overnment securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI) , an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a delay in
recovering the fund's securities. The fund may also lend money to other
funds advised by FMR and to issuers in connection with certain direct debt
transactions.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks to provide investment results that correspond to the
aggregate price and interest performance of the debt securities in the
Aggregate Bond Index .
With respect to 75% of its total assets, the fund may not purchase a
security if, as a result, more than 5% would be invested in the
securities of any issuer.
The fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. The fund also pays OTHER EXPENSES, which are explained
below.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund pays
the fee at the annual rate of 0.32% of its average net assets.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the fund has other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for the fund. Fidelity Service Co. (FSC) calculates the
net asset value per share (NAV) and dividends for the fund,
maintains the fund's general accounting records , and administers the
fund's securities lending program. In fiscal 199 5 , the fund paid
FIIOC and FSC fees equal to 0.16 % (before reimbursement, if
any) and 0.04 % (before reimbursement, if any) ,
respectively, of the fund's average net assets.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its resources, including management fees, to
pay expenses associated with the sale of fund shares. This may include
payments to third parties, such as banks or broker-dealers, that provide
shareholder support services or engage in the sale of the fund's shares.
The Board of Trustees has not authorized such payments. The fund does not
pay FMR any separate fees for this service.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelit y.
The fund's portfolio turnover rate for fiscal 1995 was 73 %. This
rate varies from year to year.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an Investment Professional, read that Investment
Professional's program materials in conjunction with this prospectus for
additional service features or fees that may apply. Certain features of
the fund, such as minimum initial or subsequent investment amounts, may be
modified in these programs, and administrative charges may be imposed for
the services rendered.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer. Otherwise, call your Fidelity toll-free
retirement number .
WAYS TO SET UP YOUR ACCOUNT
TRUST
FOR MONEY BEING INVESTED BY A TRUST.
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS.
For more specific information, call the appropriate number listed on page .
TAX SAVING RETIREMENT PLANS. Fidelity can set up your new account in the
fund 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 , and the corresponding information
may not apply. Retirement plan participants should refer to their
retirement plan's guidelines for further information.
(solid bullet) DEFINED CONTRIBUTION PLANS, such as 401(k) Plan,
employer-sponsored IRA programs, Thrift, Keogh or Corporate Profit-Sharing
or Money-Purchase Plans: open to self-employed people and their partners or
to corporations, to benefit themselves and their employees.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are open to employees of most
non-profit organizations.
(solid bullet) DEFINED BENEFIT PLANS are open to corporations of all sizes
to benefit their employees.
(solid bullet) 457 PLANS are open to employees of most government agencies.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called NAV, is calculated every business day. The
fund's shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent . NAV is normally
calculated at 4:00 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account by wire as
described on page . If there is no account application accompanying
this prospectus, call the appropriate number listed on page .
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Open your account by exchanging from another
Fidelity fund,
(small solid bullet) Wire money into your account, or
(small solid bullet) Contact your Investment Professional.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
SECURITIES EXCHANGE. Shares of the fund may be purchased in exchange for
securities you hold which meet the fund's investment objective,
policies and limitations. FDC reserves the right to refuse a securities
exchange for any reason. You may realize a gain or loss for federal
income tax purposes upon a securities exchange.
For further information call Client Services at the appropriate telephone
number on page . DO NOT SEND SECURITIES TO THE FUND OR TO
FDC.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $100,000
TO ADD TO AN ACCOUNT $2,500
MINIMUM BALANCE $100,000
FOR INFORMATION OR ASSISTANCE IN OPENING A NEW ACCOUNT:
<TABLE>
<CAPTION>
<S> <C> <C>
18.Initial Investment Corporate Retirement Plans 800-962-1375
(Client Services) 800-343-0860
"Not for Profit" Retirement Plans 800-843-3001
Financial and Other Institutions
Additional Investment Corporate Retirement Plans 800- 962 - 1375
( Client Services ) 800-343-0860
"Not for Profit" Retirement Plans 800-343-6310
Financial and Other Institutions
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TO 19. OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Exchange from
another Fidelity fund (small solid bullet) Exchange from another Fidelity
account with the same registration, fund account with the same
including name, address, and registration, including name,
taxpayer ID number. address, and taxpayer ID number.
(phone_graphic) (small solid bullet) Use Fidelity Money Line(registered trademark) to
transfer from your bank account.
Call before your first use to verify
that this service is in place on your
account. Minimum Money Line:
$250 . Maximum Money Line:
$50,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the
account (small solid bullet) Make your check payable to
application. Make your check "Fidelity U.S. Bond Index Portfolio."
payable to "Fidelity U.S. Bond Index Indicate your fund account number
Portfolio." Mail to the address on your check and mail to the
indicated on the application. address printed on your account
statement.
(small solid bullet) C all the appropriate number listed
above for instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call the appropriate
number listed (small solid bullet) You must sign up for the wire
above to set up your account and to feature before using it. Call the
arrange a wire transaction. appropriate number listed above for
instructions.
(small solid bullet) Call Client Services
before 4:00 p.m. (small solid bullet) Call Client Services before 4:00
Eastern time. p.m. Eastern Time.
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent . NAV is normally calculated at 4:00 p.m. Eastern time.
If you are selling shares of the fund as offered through an
employer-sponsored retirement plan, please contact your employer or call
your Fidelity toll-free retirement plan number.
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described on
these two pages.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE(registered trademark),
you will need to sign up for these services in advance.
TO SELL SHARES IN A RETIREMENT ACCOUNT, your request must be made in
writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing.
IF YOU ARE SELLING SOME, BUT NOT ALL OF YOUR SHARES, leave at least
$100,000 worth of shares in the account to keep it open.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner, or
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration.
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank,
broker - dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the
following table.
Mail your letter to the following address:
Fidelity U.S. Bond Index Portfolio
Fidelity Investments Institutional Operations Company
P.O. Box 1182
Boston, MA 02103-1182
Unless otherwise instructed, the transfer agent will send a check to the
record address.
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PHONE All account types , except retirement (small solid bullet) Maximum check request: $100,000.
(small solid bullet) For Fidelity Money Line
(registered trademark) transfers
to your bank account: Minimum:
$2,500. Maximum: $50,000.
(phone_graphic) (small solid bullet) You may exchange to other Fidelity
funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(phone_
graphic) Retirement account (small solid bullet) If you have invested through an
employer-sponsored retirement
plan, contact your employer or call
the appropriate number listed on
page .
Mail or in Person
(mail_graphic)(hand_
graphic) Retirement account (small solid bullet) The account owner should complete
a retirement distribution form. Call
the appropriate number listed on
Trust page or your Fidelity toll-free
retirement number.
(small solid bullet) The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
registration, provide a copy of the
trust document certified within the last
60 days with a signature guaranteed
letter.
Business or Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the
account must sign the letter. Must
be accompanied by a signature
guarantee.
Wire (wire_
graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. Call the
appropriate number listed on page
to verify that it is in place.
Minimum wire: $100,000
(small solid bullet) Your wire redemption request must
be received by the transfer agent
before 4:00 p.m. Eastern time for
money to be wired on the next
business day.
</TABLE>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired:
1-800-544-0118
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly for retirement plans ,
monthly for all others)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in the fund. Call the appropriate
number listed on page if you need additional copies of financial
reports.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see
"Exchange Restrictions," page .
FIDELITY MONEY LINE(registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains to shareholders each year. Income dividends are declared
daily and paid monthly. Capital gains are normally distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The fund offers three options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 1/2 years old, you can receive distributions in cash.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of the
date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON D ISTRIBUTIONS. Distributions are subject to federal income
tax, and may also be subject to state or local taxes. If you live outside
the United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains.
During fiscal 1995, 42.9% of the fund's income distributions was derived
from interest on U.S. Government securities which is generally exempt from
state income tax.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least
quarterly. However, it is up to you or your tax preparer to determine
whether this sale resulted in a capital gain and, if so, the amount of tax
to be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount of
your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the fund
and its investments and these taxes generally will reduce the fund's
distributions.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its efforts to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. FSC normally calculates the fund's NAV as of the close of business
of the NYSE, normally 4:00 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding.
The fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, or if the values have been
materially affected by events occurring after the closing of a foreign
market, assets are valued by a method that the Board of Trustees believes
accurately reflects fair value.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your request is received and accepted by the
transfer agent . Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
(small solid bullet) You begin to earn dividends as of the first
business day following the day of your purchase.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line (registered trademark)
redemptions generally will be credited to your bank account on the second
or third business day after your phone call.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money
Line (registered trademark) have been collected, which can take up to
seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
For purposes of determining the minimum balance, multiple accounts
registered in the same name within the fund will be aggregated.
IF YOUR ACCOUNT BALANCE FALLS BELOW $100,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincide s with a "market timing" strategy may be disruptive to the
fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative or any other person has been authorized
to give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
FIDELITY INSTITUTIONAL TRUST
FIDELITY U.S. BOND INDEX PORTFOLIO
CROSS REFERENCE SHEET
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 Trustees and Officers
15a Description of the Trust
b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Management Contract
d *
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17a Portfolio Transactions
b Portfolio Transactions
c Portfolio Transactions
d *
e *
18a Description of the Trust
b *
19a Additional Purchase, Exchange and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21a(i,ii) Contracts with FMR Affiliates
a(iii),b,c *
22a *
b Performance
23 Financial Statements for the fiscal period ended
February 28, 1995 are incorporated herein by reference
* Not Applicable
FIDELITY U.S. BOND INDEX PORTFOLIO
A FUND OF FIDELITY INSTITUTIONAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 19 , 199 5
This Statement of Additional Information (SAI) is not a prospectus
but should be read in conjunction with the fund 's current Prospectus
(dated April 19 , 199 5 ). Please retain this document for
future reference. The fund's financial s tatements and
financial highlights, included in the Annual Report, for the fiscal
year ended February 28, 199 5, are incorporated herein by
reference . To obtain an additional copy of the Prospectus and Annual
Report, or this SAI please call Fidelity Distributors Corporation at the
appropriate number listed below:
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact that
institution directly.
RETIREMENT PLAN LEVEL ACCOUNT S (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
Portfolio Transactions
Valuation
Performance
Additional Purchase , Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation ( FDC )
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
The Bank of New York
UBI-ptb-495
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 fund'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 fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding shares" (as
defined in the Investment Company Act of 1940 (1940 Act)) of the fund.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this SAI are
not fundamental and may be changed without shareholder approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND 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 fund in respect of the fund's assets or earnings, provided that the
fund 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 fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that the fund may make initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts;
(5) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (less liabilities other
than borrowings). Any borrowings that come to exceed 33 1/3% of the value
of the fund's total assets by reason of a decline in net assets will be
reduced within three days to the extent necessary to comply with the 33
1/3% limitation. The fund 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
fund 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 fund's total assets (taken at current
value) would be invested in the securities of issuers having their
principal business activities in the same industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling investment vehicles that deal in real estate or interests therein,
nor shall this prevent the fund from purchasing interests in pools of real
estate mortgage loans);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts or marketable securities issued by
companies or other entities); or
(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 fund may borrow money only (a) from a bank or from a registered
investment company or fund 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 fund will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings after such borrowings would exceed 15% of the fund's
total assets.
(ii) The fund does not currently intend to purchase any security if, as
a result, more than 10% of its net assets would be invested in
securities that are deemed 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.
(iii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in 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.
(iv) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 7.5% of the
fund's net assets) to a registered investment company for which FMR or an
affiliate serves as investment adviser or (b) acquiring 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 agreements.)
( v ) The fund 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 fund 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 fund does not currently intend to purchase warrants,
valued at the lower of cost or market, in excess of 5% of the fund's net
assets. Included in that amount, but not to exceed 2% of the fund's net
assets, may be warrants that are not listed on the New York Stock Exchange
or the American Stock Exchange. Warrants acquired by the fund in units or
attached to securities are not subject to these restrictions.
( viii ) The fund does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
( i x) The fund 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 fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page
.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund 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 fund may receive fees for
entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund 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 fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund 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 fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund 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 fund's investments and, through reports
from FMR, the Board monitors investments in illiquid instruments. In
determining the liquidity of the fund's investments, FMR may consider
various factors, including (1) the frequency of trades and quotations, (2)
the number of dealers and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the nature of the security
(including any demand or tender features), and (5) the nature of the
marketplace for trades (including the ability to assign or offset the
fund's rights and obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities, and over-the-counter options. Also, FMR may
determine some restricted securities, government-stripped fixed-rate
mortgage-backed securities, loans and other direct debt instruments,
and swap agreements to be illiquid. However, with respect to
over-the-counter options the fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement the fund may
have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, the fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
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 fund may be obligated to pay all or
par t of the registration expense and a considerable period may
elapse between the time it decides to seek registration and the time it may
be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop ,
the fund might obtain a less favorable price than prevailed when it decided
to seek registration of the security.
INDEXED SECURITIES. The fund 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.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS . Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower
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 are subject to the fund's policies
regarding the quality of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of principal and
interest. Direct debt instruments may not be rated by any nationally
recognized rating service. If the fund does not receive scheduled interest
or principal payments on such indebtedness, the fund's share price and
yield could be adversely affected. Loans that are fully secured offer the
fund more protections than an unsecured loan in the event of non-payment of
scheduled interest or principal. However, there is no assurance that the
liquidation of collateral from a secured loan would satisfy the borrower's
obligation, or that the collateral could be liquidated. Indebtedness of
borrowers whose creditworthiness is poor involves substantially greater
risks and may be highly speculative. Borrowers that are in bankruptcy or
restructuring may never pay off their indebtedness, or may pay only a small
fraction of the amount owed. Direct indebtedness of developing countries
also involves a risk that the governmental entities responsible for the
repayment of the debt may be unable, or unwilling, to pay interest and
repay principal when due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks to the fund.
For example, if a loan is foreclosed, the fund could become part owner of
any collateral, and would bear the costs and liabilities associated with
owning and disposing of the collateral. In addition, it is conceivable that
under emerging legal theories of lender liability, the fund could be held
liable as a co-lender. Direct debt instruments may also involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments that are not in the form of securities may offer less legal
protection to the fund in the event of fraud or misrepresentation. In the
absence of definitive regulatory guidance, the fund relies on FMR's
research in an attempt to avoid situations where fraud or misrepresentation
could adversely affect the fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan,
as specified in the loan agreement. Unless, under the terms of the loan or
other indebtedness, the fund has direct recourse against the borrower, it
may have to rely on the agent to apply appropriate credit remedies against
a borrower. If assets held by the agent for the benefit of the fund were
determined to be subject to the claims of the agent's general creditors,
the fund might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness purchased by the fund may include letters of credit,
revolving credit facilities, or other standby financing commitments
obligating the fund to pay additional cash on demand. These commitments may
have the effect of requiring the fund to increase its investment in a
borrower at a time when it would not otherwise have done so, even if the
borrower's condition makes it unlikely that the amount will ever be repaid.
The fund will set aside appropriate liquid assets in a segregated custodial
account to cover its potential obligations under standby financing
commitments.
The fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see the fund's fundamental
investment limitations 1 and 7). For purposes of these limitations, the
fund generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between the fund and
the borrower, if the participation does not shift to the fund the direct
debtor-creditor relationship with the borrower, SEC interpretations require
the fund, in appropriate circumstances, to treat both the lending bank or
other lending institution and the borrower as "issuers" for these purposes.
Treating a financial intermediary as an issuer of indebtedness may restrict
the fund's ability to invest in indebtedness related to a single financial
intermediary, or a group of intermediaries engaged in the same industry,
even if the underlying borrowers represent many different companies and
industries.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security bank to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price, as well as delays and costs to the fund
in connection with bankruptcy proceedings), it is the fund's current policy
to engage in repurchase agreement transactions with parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued
by the SEC, the fund has received permission to lend money to, and borrow
money from, other funds advised by FMR or its affiliates. Interfund loans
and borrowings normally extend overnight, but can have a maximum duration
of seven days. Loans may be called on one day's notice. A fund will lend
through the program only when the returns are higher than those available
from 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. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity
or additional borrowing costs.
REVERSE REPURCHASE AGREEMENTS . In a reverse repurchase agreement, a
fund sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
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.
MORTGAGE-BACKED SECURITIES. The fund 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
fund may invest in them if FMR determines they are consistent with the
fund'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.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the fund 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 fund
may engage in loan transactions only under the following conditions: (1)
the fund 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 fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the 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 fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
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 dividends, the fund takes into account as income
a portion of the difference between a zero coupon bond's purchase price and
its face value.
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 fund's exposure to long or
short-term interest rates (in the U.S. or abroad), 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 fund is not limited to any
particular form of swap agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure from one
type of investment to another. For example, if the fund agreed to pay
fixed rates in exchange for floating rates while holding fixed-rate bonds,
the swap would tend to decrease the fund'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 fund's investments and its share
price and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate or, other factors that determine the
amounts of payments due to and from the fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when
due. In addition, if the counterparty's creditworthiness declined, the
value of a swap agreement would be likely to decline, potentially resulting
in losses. The fund expects to be able to eliminate its exposure under swap
agreements either by assignment or other disposition, or by entering into
an offsetting swap agreement with the same party or a similarly
creditworthy party.
The fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If the fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
FOREIGN INVESTMENTS. Investing in securities issued by companies or other
issuers whose principal activities are outside the United States may
involve significant risks in addition to the risks inherent in U.S.
investments. In addition, there is generally less publicly available
information about foreign issuers' financial condition and operations,
particularly those not subject to the disclosure and reporting requirements
of the U.S. securities laws. Foreign issuers are generally not bound by
uniform accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Further, economies of particular countries or areas of the world may differ
favorably or unfavorably from the economy of the United States.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate
assets , or other government intervention. There may be a greater
possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects. The considerations noted above generally are
intensified for investments in developing countries. Developing countries
may have relatively unstable governments, economies based on only a few
industries, and securities markets that trade a small number of securities.
Foreign markets may offer less protection to investors than U.S. markets.
It is anticipated that in most cases the best available market for foreign
securities will be on exchanges or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may expose the fund to increased risk
in the event of a failed trade or the insolvency of a foreign
broker-dealer, and may involve substantial delays. In addition, the costs
of foreign investing, including withholding taxes, brokerage commissions
and custodial costs, are generally higher than for U.S. investors. In
general, there is less overall governmental supervision and regulation of
securities exchanges, brokers, and listed companies than in the United
States. It may also be difficult to enforce legal rights in foreign
countries.
The fund may invest in foreign securities that impose restrictions on
transfer within the United States or to U.S. persons. Although securities
subject to such transfer restrictions may be marketable abroad, they may be
less liquid than foreign securities of the same class that are not subject
to such restrictions.
The fund may invest in American Depository Receipts and European Depository
Receipts (ADRs and EDRs), which are certificates evidencing ownership of
shares of a foreign-based issuer held in trust by a bank or similar
financial institution. Designed for use in the U.S. and European securities
markets, respectively, ADRs and EDRs are alternatives to the purchase of
the underlying securities in their national markets and currencies.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed
a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The fund intends to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the fund can
commit assets to initial margin deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund'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 fund'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 fund would
exceed 5% of the fund'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 fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this SAI may be changed as regulatory
agencies permit.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
the fund 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 fund 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 fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if the
fund had purchased the underlying instrument directly. When the fund 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 fund's investment limitations. In the event of the
bankruptcy of a n FCM that holds margin on behalf of the fund,
the fund 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 fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligatio n ) to sell the option's
underlying instrument at a fixed strike price. In return for this
right, the fund 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 fund 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 fund will lose the entire premium it paid.
If the fund exercises the option, it completes the sale of the underlying
instrument at the strike price. The fund 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 fund 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 fund 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 fund will be required to make margin payments to a n FCM
as described above for futures contracts. The fund 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 fund has written, however, the
fund 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 fund 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 fund 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 fund 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 fund's current or
anticipated investments exactly. The fund 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 fund's investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are a ffected 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 fund may purchase or sell options and futures contracts with a
greater or lesser value than the securities it wishes to hedge or
intend s 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
fund'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 fund
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 fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OVER-THE-COUNTER (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 fund 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 fund 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 fund's assets could impede
fund management or the fund's ability to meet redemption requests or other
current obligations.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating
interest rates and carry rights that permit holders to demand payment of
the unpaid principal balance plus accrued interest from the issuers or
certain financial intermediaries. Floating rate instruments have interest
rates that change whenever there is a change in a designated base rate
while variable rate obligations provide for a specific periodic adjustment
in the interest rate. These formulas are designed to result in a market
value for the instrument that approximates its par value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of fund securities are placed on
behalf of the fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to ,
the size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions. Commissions for foreign
investments traded on foreign exchanges generally will be higher than for
U.S. investments and may not be subject to negotiation.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, fund 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 fund may be useful to FMR in rendering investment management
services to the fund 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 fund. 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
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers ,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the fund 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 fund 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 executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such re quirements , the Board of Trustees
has authorized FBSI to execute fund 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
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to
the benefits to the fund.
For the fiscal periods ended February 28, 199 5 and 1994 the
fund 's portfolio turnover rate s were 73% and 1 60% ,
respectively. Because a high turnover rate increases transaction
costs and may increase taxable capital gains, FMR carefully weighs the
anticipated benefits of short-term investing against these consequences.
An increased turnover rate is due to a greater volume of shareholder
purchase orders, short-term interest rate volatility, and other special
market conditions.
For fiscal years 1995, 1994, and 1993, the fund paid no brokerage
commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund 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 fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the fund of more than one of these funds or accounts. Simultaneous
transactions are inevitable when several funds or accounts are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable for
each fund. In some cases this system could have a detrimental effect on
the price or v alue of the security as far as the fund is concerned.
In other cases, however, the ability of the fund to participate in volume
transactions will produce better executions and prices for the fund. It is
the current opinion of the Trustees that the desirability of retaining FMR
as investment adviser to the fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATIO N
The net asset value per share (NAV) of the Portfolio is determined by
Fidelity Service Co. (FSC), 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.
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.
PERFORMANCE
The fund may quote performance in various ways. All performance
information supplied by the fund in advertising is historical and is
not intended to indicate future returns. The fund's s hare price,
yield , and total retur n fluctuate in response to market
conditions and other factors, and the value of fund shares when
redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for the fund are computed by dividing
the fund'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
fund's NAV at the end of the period and annualizing the result
(assuming compounding of income ) 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 .
Income calculated for the purposes of calculating the fund's 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 fund's yield may not equal its
distribution rate, the income paid to your account, or the income reported
in the fund's financial statements.
Yield information may be useful in reviewing the fund's performance and in
providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates,
the fund's yield will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest
rates, the fund's yield will tend to be somewhat lower. Also, when
interest rates are falling, the inflow of net new money to the fund
from the continuous sale of its shares will likely be invested in
instruments producing lower yields than the balance of the fund's
holdings, thereby reducing the current yield. In periods of rising interest
rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of the fund's return, including the effect of
reinvesting dividends and capital gain distributions , and any change
in the fund's NAV over a stated period. Average annual
total returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in the fund over a stated
period, and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline in
value had been constant over the period. For example, a cumulative
total return of 100% over ten years would produce an average annual
return of 7.18%, which is the steady annual rate of return that
would equal 100% growth on a compounded basis in ten years. While average
annual returns are a convenient means of comparing investment
alternatives, investors should realize that the fund's performance
is not constant over time, but changes from year to year, and that average
annual returns represent average d figures as opposed to
the actual year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote
unaveraged or CUMULATIVE TOTAL RETURNS reflecting the simple change in
value of an investment over a stated period . Average annual and
cumulative total returns may be quoted as a percentage or as a
dollar amount, and may be calculated for a single investment, a series
of investments, or a series of redemptions, over any time period.
Total returns may be broken down into their components of income and
capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions to
total return. Total returns may be quoted on a before-tax or after-tax
basis. Total returns , yields, and other performance information
may be quoted numerically or in a table, graph or similar illustration.
NET ASSET VALUE. Charts and graphs using the fund's net asset
values, adjusted net asset values, and benchmark indices may be used to
exhibit performance. An adjusted NAV includes any distributions paid by the
fund and reflects all elements of its return. Unless otherwise indicated,
the fund's adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS. The following tables show the fund's yields and
total returns for periods ended February 28, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-Day One Year Life of One Year Life of
Yield Fund* Fund*
U.S. Bond
Index
Portfolio 7.50% 1.90 % 9 . 11 % 1.90 % 54.42 %
</TABLE>
* From March 8, 1990 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during these periods,
the fund's yield and total returns would have been lower.
The following table shows the income and capital elements of the fund's
cumulative total return. The table compares the fund's return to the record
of the Aggregate Bond Index Portfolio, Standard & Poor's Composite Index of
500 Stocks (S&P 500), the Dow Jones Industrial Average (DJIA), and the cost
of living (measured by the Consumer Price Index, or CPI) over the same
period. The CPI information is as of the month end closest to the initial
investment date for each fund. The comparisons to the Aggregate Bond Index
Portfolio show the fund's total return 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 fund's returns, its returns do not include the effect of paying
brokerage commissions and other costs of investing. The S&P 500 and DJIA
comparisons are provided to show how the fund's total return compared to
the record of a broad average of common stocks and a narrower set of stocks
of major industrial companies, respectively, over the same period. Of
course, since the fund invests in fixed-income securities, common stocks
represent a different type of investment from the fund. Common stocks
generally offer greater growth potential than the fund, but generally
experience greater price volatility, which means greater potential for
loss. In addition, common stocks generally provide lower income than a
fixed-income investment such as the fund. Figures for the S&P 500 and DJIA
are based on the prices of unmanaged groups of stocks and, unlike the
fund's returns, do not include the effect of paying brokerage commissions
or other costs of investing.
During the period from March 8, 1990 (commencement of operations) to
February 28, 1995, a hypothetical $100,000 investment in U.S. Bond Index
Portfolio would have grown to $154,420, assuming all distributions were
reinvested. This was a period of fluctuating interest rates and bond prices
and the figures below should not be considered representative of the
dividend income or capital gain or loss that could be realized from an
investment in the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY U.S. BOND INDEX PORTFOLIO INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Reinvested Total Aggregate CPI** S&P 500 DJIA
Ended Initial Reinvested Capital Gain Value Bond
$100,000 Dividend Distributions Index**
Investment Distributions
2/28/91* $ 103,100 $ 8,955 $ 0 $ 112,055 $ 112,214 $ 105,313 $ 112,872 $ 112,097
2/29/92 $ 107,100 $ 19,179 $ 922 $ 127,201 $ 126,575 $ 108,281 $ 130,940 $ 131,208
2/28/93 $ 110,700 $ 29,949 $ 3,164 $ 143,813 $ 142,003 $ 111,797 $ 144,912 $ 139,423
2/28/94 $ 108,300 $ 38,812 $ 4,434 $ 151,546 $ 149,662 $ 114,609 $157,000 $ 162,993
2/28/95 $ 102,500 $ 47,724 $ 4,196 $ 154,420 $ 152,223 $ 117,891 $ 168,544 $ 175,349
</TABLE>
* From March 8, 1990 (commencement of operations).
** 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 fund 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 (their cash
value at the time they were reinvested), amounted to $105,357. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $3,993 for dividends and $350 for capital
gains distributions. Tax consequences of different investments have not
been factored into the above figures.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. 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. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, the fund's performance may
be compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing these
indices, it is important to remember the risk and return characteristics of
each type of investment. For example, while stock mutual funds may offer
higher potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns from
stock mutual funds.
From time to time, the fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, the
fund may offer greater liquidity or higher potential returns than CDs, the
fund does not guarantee your principal or your return, and fund shares are
not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to assess savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the 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 fund 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 IBC/Donaghue's MONEY FUND AVERAGES(trademark)/All
Taxable, which is reported in the MONEY FUND REPORT(registered trademark),
covers over 782 taxable money market funds. The BOND FUND REPORT
AVERAGES(trademark)/taxable bond funds, which is reported in the BOND FUND
REPORT(registered trademark), covers over 497 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. The fund, however, 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; saving for college or other goals; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote or
reprint financial or business publications and periodicals, including model
portfolios or allocations, as they relate to current economic and political
conditions, fund management, portfolio composition, investment philosophy,
investment techniques, the desireability of owning a particular mutual
fund, and Fidelity services and products. Fidelity may also reprint, and
use as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. The fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, the fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
The fund 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.
As of February 28, 1995, FMR advised over $25 billion in tax-free fund
assets, $70 billion in money market fund assets, $165 billion in equity
fund assets, $40 billion in international fund assets, and $20 billion in
Spartan fund assets. The fund may reference the growth and variety of money
market mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the largest
amount of equity fund assets under management by a mutual fund investment
adviser in the United States, making FMR America's leading equity (stock)
fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching and
managing investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE , EXCHANGE AND REDEMPTION INFORMATION
The fund is open for business and its NAV is calculated each day the NYSE
is open for trading. The NYSE has designated the following holiday closings
for 1995: New Year's Day (observed), Washington's Birthday , Good
Friday, Memorial Day (observed), Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday
schedule to be observed in the future, the NYSE may modify its holiday
schedule at any time.
FSC normally determines the fund's NAV as of the close of the NYSE.
However, NAV may be calculated earlier if trading on the NYSE is restricted
or as permitted by the SEC. To the extent that portfolio securities
are traded in other markets on days when the NYSE is closed, the fund's NAV
may be affected on days when investors do not have access to the fund to
purchase or redeem shares. In addition, trading in some of the fund's
portfolio s ecurities may not occur on days when the fund is open for
business.
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 fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the fund 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 fund 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.
In the prospectus, the fund 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. Because the fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of the fund's
dividends derived from certain U.S. government obligations may be exempt
from state and local taxation. The fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund, and such shares are held
six months or less 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 fund are taxable to shareholders as dividends, not as capital gains.
As of February 28, 1995, the fund had a capital loss carryforward
aggregating approximately $5,486,000. This loss carry forward, of which
$5,486,000 will expire on February 28, 2003, is available to offset future
capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because the fund does not currently anticipate that securities
of foreign issuers will constitute more than 50% of it 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.
TAX STATUS OF THE FUND. The fund intends to qualify each year 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 or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. The fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund'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 fund's
investments in such instruments.
The fund is treated as a separate entity from the other fund of
Fidelity Institutional Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company
organized in 1972. Through ownership of voting common stock and the
execution of a shareholders' voting agreement, Edward C. Johnson 3d,
Johnson family members, and various trusts for the benefit of the Johnson
family form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and
participation in initial public offerings is prohibited. In addition,
restrictions on the timing of personal investing in relation to trades by
Fidelity funds and on short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the fund 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 fund 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., 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., 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 is a member of 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 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. , and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as a
Trustee of First Union Real Estate Investments, a Trustee and member of the
Executive Committee of the Cleveland Clinic Foundation, a Trustee and
member of the Executive Committee of University School (Cleveland), and a
Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, One Harborside,680 Steamboat Road, Greenwich, CT, Trustee,
is Executive-in-Residence (1995) at Columbia University Graduate School of
Business and a financial consultant. From 1987 to January 1995, Mr. Kirk
was a Professor at Columbia University Graduate School of Business. Prior
to 1987, he was Chairman of the Financial Accounting Standards Board. Mr.
Kirk is a Director of General Re Corporation (reinsurance) and 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 , Vice Chairman of the Board of Trustees of the Greenwich
Hospital Association, and as a Member of the public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield 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, 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 Rensselaer Polytechnic 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).
CHRISTINE THOMPSON, Vice President, is manager of U.S. Bond Index and is an
employee of FMR.
ARTHUR S. LORING, Secretary, is Senior Vice President (1993) and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of FDC.
STEPHEN P. JONAS, Treasurer (1995), is Treasurer and Vice President of FMR
(1993). Mr. Jonas is also Treasurer of FMR Texas Inc. (1994), Fidelity
Management & Research (U.K.) Inc. 1994, and Fidelity Management & Research
(Far East) Inc. (1994). Prior to becoming Treasurer of FMR, Mr. Jonas was
Senior Vice-President Finance - Fidelity Brokerage Services, Inc.
(1991-1992) and Senior Vice President, Strategic Business Systems -
Fidelity Investments Retail Marketing Company (1989-1991).
JOHN H. COSTELLO, Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH, Assistant Treasurer (1994), is an employee of FMR (1994).
Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was
Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial Officer
of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President,
Assistant Controller, and Director of the Accounting Department - First
Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current T rustee of the fund for his or her services as trustee
for the fiscal year ended February 28, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part
the Fund Complex*
of Fund Expenses Complex*
from the
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 158 5,200 52,000 125,000
Phyllis Burke Davis 148 5,200 52,000 122,000
Richard J. Flynn 195 0 52,000 154,500
E. Bradley Jones 156 5,200 49,400 123,500
Edward C. Johnson 3d** 0 0 0 0
Donald J. Kirk 158 5,200 52,000 125,000
Peter S. Lynch** 0 0 0 0
Gerald C. McDonough 158 5,200 52,000 125,000
Edward H. Malone 161 5,200 44,200 128,000
Marvin L. Mann 158 5,200 52,000 125,000
Thomas R. Williams 160 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for all 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments are not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the
program .
As of February 28, 1995, the Trustees and officers of the Trust owned in
the aggregate less than 1% of the fund 's outstanding shares.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund 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, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC and FSC, the fund pays all of its expenses, without limitation, that
are not assumed by those parties. The fund pays for the typesetting,
printing, and mailing of its proxy materials to shareholders, legal
expenses, and the fees of the custodian, auditor and non-interested
Trustees. Although the fund's current management contract provides that the
fund will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices and reports to shareholders,
the Trust, on behalf of the fund has entered into a revised transfer agent
agreement with FIIOC, pursuant to which FIIOC bears the costs of providing
these services to existing shareholders. Other expenses paid by the fund
include interest, taxes, brokerage commissions, the fund's proportionate
share of insurance premiums and Investment Company Institute dues, and the
costs of registering shares under federal and state securities laws. The
fund is also liable for such non-recurring expenses as may arise, including
costs of any litigation to which the fund may be a party, and any
obligation it may have to indemnify its officers and Trustees with respect
to litigation.
FMR is the fund's manager pursuant to a management contract dated January
13, 1988, which was approved by shareholders on October 3, 1990.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0.32% of the average net assets of the
fund throughout the month. For the fiscal years ended February 28, 1995 and
1994, the period November 1, 1992 through February 28, 1993, and the fiscal
year ended October 31, 1992, FMR received $243,183 (after reimbursement),
$0 (after reimbursement), $0 (after reimbursement), and $0 (after
reimbursement), respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield.
Effective January 13, 1988, FMR voluntarily agreed, subject to revision or
termination, to reimburse the fund if and to the extent that its aggregate
operating expenses, including management fees, were in excess of an annual
rate of 0.32% of average net assets of the fund. If this reimbursement had
not been in effect, for the fiscal years ended February 28, 1995 and 1994,
the period November 1, 1992 through February 28, 1993, and the fiscal year
ended October 31, 1992, FMR would have received fees amounting to
$1,064,228, $610,385, $110,207, and $177,713, respectively, which would
have been equivalent to 0.32% of average net assets of the fund.
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund'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 fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing and shareholder servicing agent for
the fund. Under the Trust's contract with FIIOC, the fund pays annual
account fees and asset-based fees for each account based on account size.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and all
other reports, notices, and statements to shareholders, with the exception
of proxy statements.
FSC performs the calculations necessary to determine NAV and dividends for
the fund, maintains the fund's accounting records, and administers the
fund's securities lending program. The fee rates for pricing and
bookkeeping services are based on the fund's average net assets,
specifically .04% for the first $500 million of average net assets and .02%
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. Pricing and
bookkeeping fees, including related out-of-pocket expenses, paid by the
fund for the fiscal years ended February 28, 1995 and 1994, the period
November 1, 1992 through February 28, 1993, and the fiscal year ended
October 31, 1992, were $133,219 (before reimbursement, if any), $79,841
(before reimbursement, if any), $15,660 (before reimbursement, if any), and
$45,832 (before reimbursement, if any), respectively.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf of
the fund (the Plan) pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the Rule). 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 a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The Plan,
as approved by the trustees, allows the fund and FMR to incur certain
expenses that might be considered to constitute indirect payment by the
fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan also specifically
recognizes that FMR, either directly or through FDC, 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 fund. In addition, the Plan provides that FMR may use
its resources, including its management fee revenues, to make payments to
third parties that assist in selling shares of the fund, or to third
parties, including banks, that render shareholder support services. The
Trustees have not authorized such payments to date.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the trustees noted that the
Plan does not authorize payments by the fund other than those made to FMR
under its management contract with the fund. To the extent that the Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of the fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plan by local entities with whom shareholders have
other relationships.
The Plan was approved by shareholders on October 3, 1990.
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 by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC 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 fund
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 interpretations of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments under
the Plan. No preference for the instruments of such depository institutions
will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. U.S. Bond Index Portfolio is a fund 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 funds 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 funds.
In the event that FMR ceases to be the investment adviser to the fund, the
right of the Trust or fund to use the identifying name "Fidelity" may be
withdrawn.
The assets of the Trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund 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 fund s ,
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 fund, or which are general or allocable to all of the funds.
In the event of the dissolution or liquidation of the Trust, shareholders
of each fund are entitled to receive as a class the underlying assets of
such fund 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 fund's
property of any shareholder held personally liable for the
obligations of the fund. The Declaration of Trust also provides that each
fund shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund 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
fund 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 fund'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 fund may, as
set forth in the Declaration of Trust, call meetings of the Trust or a fund
for any purpose related to the Trust or fund, 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 fund 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 fund. If not so terminated, the Trust and its funds will
continue indefinitely.
As of February 28 , 199 5 , there were no shareholders owning of
record or beneficially 5% or more of the outstanding shares of the fund.
CUSTODIAN. The Bank of New York, 48 Wall Street, New York, New York 10286,
is custodian of the assets of the fund. The custodian is responsible for
the safekeeping of the fund's assets and the appointment of subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of the fund or in deciding which securities are
purchased or sold by the fund. The fund 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 fund relationships.
AUDITOR. Price Waterhouse LLP, 160 Federal Street, Boston,
Massachusetts , serves as the Trust's independent accountant. The
auditor examines financial statements for the fund and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal
year ended February 28, 1995 are included in the fund's Annual Report,
which is a separate report attached to the Prospectus. The fund's financial
statements and financial highlights are incorporated herein by
reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the fund.
The fund may, however, consider the ratings for other types of investments
and the ratings assigned by other rating organizations when determining the
eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, 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 U.S EQUITY INDEX PORTFOLIO
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1............................................... Cover Page
2 a............................................ Expenses
b,c.......................................... Contents; Who May Want To Invest
3 Financial Highlights
a,b............................................
c........................................... Performance
d........................................... Performance
</TABLE>
4 a(i)......................................... Charter
<TABLE>
<CAPTION>
<S> <C>
a(ii)....................................... Investment Principles and Risks; Securities and Investment
Practices; Fundamental Policies and Restrictions
b............................................ Securities and Investment Practices
c............................................. Who May Want to Invest; Investment Principles and Risks;
Fundamental Policies and Restrictions
5 a............................................ Charter
b(i)........................................ Cover Page; Charter; FMR and its Affiliates
b(ii)....................................... FMR and its Affiliates; Breakdown of Expenses
b(iii)...................................... Expenses; Breakdown of Expenses
c........................................ *
d............................................ Cover Page; Charter; Breakdown of Expenses; FMR and its
Affiliates
e............................................ FMR and its Affiliates; Breakdown of Expenses
f............................................. Expenses
Charter
g(i)............................................
g(ii)......................................... *
5 A............................................ Performance
6 a(i)........................................ Charter
a(ii)....................................... How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
a(iii)..................................... *
b............................................ *
c........................................... How to Buy Shares; Exchange Restrictions
d........................................... *
e........................................... Cover Page; How to Buy Shares; How to Sell Shares;
Investor Services; Transaction Details
f,g......................................... Dividends; Capital Gains, and Taxes
7 a........................................... Cover Page; FMR and its Affiliates
b........................................... How to Buy Shares; Transaction Details
c........................................... *
d........................................... How to Buy Shares
e........................................... Breakdown of Expenses
f............................................ Expenses; Breakdown of Expenses
8 .............................................. How to Sell Shares; Investor Services; Transaction Details;
Exchange Restrictions
9 .............................................. *
* Not Applicable
</TABLE>
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
FIDELITY
U.S. EQUITY INDEX
PORTFOLIO
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing or a
copy of the Statement of Additional Information (SAI) dated April 19,
1995 . The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, or for
information or assistance in opening a new account call the appropriate
number listed below or call your Investment Professional.
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact that institution
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
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.
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.
UEI-pro-495
A fund of Fidelity Institutional Trust
The fund seeks a total return which corresponds to the Standard & Poor's
Composite Index of 500 Stocks.
PROSPECTUS
DATED APRIL 19, 1995(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
FEBRUARY 28, 1995
CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES The fund's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
PERFORMANCE How the fund has done over time.
THE FUND IN DETAIL CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The fund's overall
approach to investing.
BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and making
additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
APPENDIX
</TABLE>
ANNUAL REPORT
<TABLE>
<CAPTION>
<S> <C> <C>
PERFORMANCE A-1 How the fund has done over time.
FUND TALK A-3 The manager's review of fund performance, strategy
and outlook.
INVESTMENTS A-5 A complete list of the fund's investments with their
market values.
FINANCIAL STATEMENTS A-14 Statement of assets and liabilities, operations, and
changes in net assets .
NOTES A-17 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-20 The auditor's opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns. The
fund is designed for those who want to keep expenses low while pursuing
growth of capital and income through a portfolio of securities that broadly
represents the U.S. stock market, as measured by the Standard & Poor's
Composite Index of 500 Stocks (S&P 500(registered trademark)).
Because the fund seeks to track, rather than beat, the performance of the
S&P 500, the fund is not managed in the same manner as other mutual
funds. Fidelity Management & Research Company (FMR) generally does
not judge the merits of any particular stock as an investment. Therefore,
you should not expect to achieve the potentially greater results that could
be obtained by a fund that aggressively seeks growth.
The value of the fund's investments varies from day to day, generally
reflecting changes in market conditions and other company, political, and
economic news. Over time, s tocks have shown greater growth potential
than other types of securities. In the short - term, however, stock
prices can fluctuate dramatically in response to these factors.
The fund itself is not a balanced investment plan. You should consider
your investment objective and tolerance for risk when making an investment
decision. When you sell your shares, they may be worth more or less than
what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales charge on redemptions None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to FMR . The fund also incurs other expenses for
services such as maintaining shareholder records, and furnishing
shareholder account statements and financial reports.
The fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of the fund, and
are calculated as a percentage of average net assets.
Management fee (after reimbursement) 0.0 0
%
12b-1 fee (Distribution Fee) None
Other expenses 0.28
%
Total operating expenses (after reimbursement) 0.28
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in the fund, assuming a 5% annual return and full redemption, at
the end of each time period:
1 3 5 10
Year Years Years Years
$ 3 $ 9 $ 16 $ 36
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
Subject to revision upon 90 days' notice to shareholders, FMR has
voluntarily agreed to reimburse the fund to the extent that total operating
expenses are in excess of 0 .28% of its average net assets. If this
agreement were not in effect, the management fee, other expenses, and total
operating expenses would have been 0.28%, 0.31%, and 0.59 % ,
respectively, as percentages of average net assets. Interest, taxes,
brokerage commissions, or extraordinary expenses are not included in this
expense limitation.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows and the fund's financial
statements are included in the fund's Annual Report and have been audited
by Price Waterhouse LLP , independent accountants. Their report on
the financial statements and financial highlights is included in the Annual
Report. The financial statements, the financial highlights, and the report
are attached.
SELECTED PER-SHARE DATA
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C>
21.Years ended February 28
1988B 1989C 1990C 1991C 1992C 1993D 1994 1995
22.Net asset value, beginning of period
$ 10.00 $ 10.81 $ 13.23 $ 11.61 $ 14.97 $ 15.77 $ 16.73 $ 17.36
23.Income from Investment Operations
24. Net investment income
.23 .38 .44 .42 .42 .15 .44 .43
25. Net realized and unrealized gain
.74 2.41 (1.44) 3.38 .97 .94 .88 .77
(loss) on investments
26. Total from investment operations
.97 2.79 (1.00) 3.80 1.39 1.09 1.32 1.20
27.Less Distributions
28. From net investment income
(.16) (.35) (.48) (.44) (.43) (.13) (.44) (.43)
29. From net realized gain
- -- (.02) (.14) -- (.16) -- (.25) (.07)
30. In excess of net realized gain
- -- -- -- -- -- -- -- (.04)
31. Total distributions
(.16) (.37) (.62) (.44) (.59) (.13) (.69) (.54)
32.Net asset value, end of period
$ 10.81 $ 13.23 $ 11.61 $ 14.97 $ 15.77 $ 16.73 $ 17.36 $ 18.02
33.Total return E,F
9.77% 26.30% (7.98) 33.13% 9.59% 6.93% 8.06% 7.17%
%
34.RATIOS AND SUPPLEMENTAL DATA
35.Net assets, end of period (000
$ 34,576 $ 303,859 $ 435,641 $ 960,442 $ 1,454,6 $ 1,472,1 $ 1,892,2 $ 2,234,8
omitted) 84 02 54 92
36.Ratio of expenses to average net
.28%A .28% .28% .28% .28% .28% .28% .28%
assets A
37.Ratio of expenses to average net
1.83%A, .97% .66% .67% .64% .66% .61% .59%
assets before expense reductions
G
38.Ratio of net investment income to
4.56%A 3.79% 3.55% 3.14% 2.78% 2.95% 2.59% 2.65%
average net assets A
39.Portfolio turnover rate
3%A 10% 2% 4% 6% 28% 4% 11%
A
</TABLE>
A ANNUALIZED
B FEBRUARY 17, 1988 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31, 1988.
C FOR THE YEAR ENDED OCTOBER 31.
D FOR THE FOUR MONTHS ENDED FEBRUARY 28, 1993.
E TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
F 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 A-19).
G EXPENSES WOULD HAVE BEEN LIMITED IN ACCORDANCE WITH THE STATE EXPENSE
LIMITATION IF THE VOLUNTARY LIMITATION HAD NOT BEEN IN EFFECT.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from March 1 to February 28. The tables below
show the fund's performance history compared to the S&P 500 and a
measure of inflation.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
February 28, 1995 year [C] years[ C ] fund[A][ C ]
</TABLE>
U.S. Equity Index 7.17% 11.02% 12.60%
S&P 500 7.36% 11.35% 12.92%
Consumer Price 2.86% 3.35% 3.83%[B]
Index
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Fiscal periods ended Past 1 Past 5 Life of
February 28, 1995 year[ C ] years[ C ] fund[A][ C ]
</TABLE>
U.S. Equity Index 7.17% 68.66% 130.51%
S&P 500 7.36% 71.20% 135.25%
Consumer Price 2.86% 17.89% 30.09%[B]
Index
[A] FROM FEBRUARY 17, 1988
[B] TOTAL RETURNS ARE FROM MONTH END CLOSEST TO COMMENCEMENT OF OPERATIONS.
[C] IF FMR HAD NOT REIMBURSED CERTAIN FUND EXPENSES DURING THESE PERIODS,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE S&P 500 is the Standard & Poor's Composite Index of 500 Stocks,
a widely recognized, unmanaged index of common stock prices. The S&P 500
figures assume reinvestment of all dividends paid by stocks included in the
index. They do not, however, include any allowance for the brokerage
commissions or other fees you would pay if you actually invested in those
stocks.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. G overnment.
The fund may quote its adjusted net asset value, including all
distributions paid. This value may be averaged over specified periods and
may be used to calculate the fund's moving average.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Client Services at the appropriate
number listed on page .
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
THE FUND IN DETAIL
CHARTER
U.S. EQUITY INDEX IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. The fund is a diversified
fund of Fidelity Institutional Trust, an open-end management investment
company organized as a Massachusetts business trust on July 21,
1987.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
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, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs.
As of February 28 , 1995, FMR advised funds having approximately
20 million shareholder accounts with a total value of more than
$ 270 billion.
Jennifer Farrelly is manager of U.S. Equity Index, which she has managed
since January 1994. She also manages VIP II: Index 500 and Market Index.
Ms. Farrelly joined Fidelity in 1988.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation ( FDC ) distributes and
markets Fidelity's funds and services. Fidelity Investment s
Institutional Operations Company (FIIOC) performs transfer agent servicing
functions for the fund.
FMR Corp. is the ultimate parent company of FMR. Through ownership of
voting common stock, members of the Edward C. Johnson 3d family form a
controlling group with respect to FMR Corp. Changes may occur in the
Johnson family group, through death or disability, which would result in
changes in each individual family member' s holding of stock. Such
changes could result in one or more family members becoming holders of over
25% of the stock. FMR Corp. has received an opinion of counsel that changes
in the composition of the Johnson family group under these circumstances
would not result in the termination of the fund's management or
distribution contracts and, accordingly, would not require a shareholder
vote to continue operation under those contracts.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives brokerage services and commission rates comparable to those of
other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The fund 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 fund attempts to duplicate the composition and total return
of the S&P 500 while keeping transaction costs and other expenses
low .
The fund seeks to match the total return of the S&P 500 while keeping
expenses low. FMR normally invests 90% of the fund's assets in equity
securities of companies that compose the S&P 500. If the fund's assets drop
below $20 million, the percentage of the fund's assets invested in such
securities may drop to as low as 65%. Although the fund focuses on common
stocks, it may also invest in other equity securities and in other types of
instruments. The fund purchases short-term debt securities for cash
management purposes and uses various techniques, such as futures contracts,
to adjust its exposure to the S&P 500.
The S&P 500 is made up of 500 common stocks, most of which trade on the New
York Stock Exchange (NYSE) . Standard & Poor's Corporation
(S&P) is neither an affiliate nor a sponsor of the fund, and inclusion
of a stock in the index does not imply that it is a good investment. The
S&P 500 is a widely recognized unmanaged index of common stock prices. It
is generally acknowledged that the S&P 500 broadly represents the
performance of publicly traded common stocks in the United States. Total
returns for the S&P 500 assume reinvestment of dividends but do not include
the effect of taxes, brokerage commissions or other fees. 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 seeking a 98% or better long-term correlation of the fund's total return
to that of the S&P 500, the fund utilizes a "passive" or "indexing"
approach and tries to allocate its assets similarly to those of the index.
The fund's composition may not always be identical to that of the S&P 500.
FMR may choose, if extraordinary circumstances warrant, to exclude a stock
held in the S&P 500 and include a similar stock in its place if doing so
will help the fund achieve its objective. FMR monitors the correlation
between the performance of the fund and the S&P 500 on a regular basis. In
the unlikely event that the fund cannot achieve a long-term correlation of
98% or better, the trustees will consider alternative arrangements.
FMR believes that with total assets of $20 million or more, the fund will
replicate the investment results of the S&P 500 with a relatively small
margin of tracking error.
Also, as a mutual fund, the fund seeks to spread investment risk by
diversifying its holdings among many companies and industries. Stock
values fluctuate in response to the activities of individual companies and
general market and economic conditions. FMR may use various
investment techniques to hedge the fund's risks, but there is no guarantee
that these strategies will work as FMR intend s . The value
of the fund's investments varies in response to many factors. When you
sell your shares, they may be worth more or less than what you paid for
them.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without
limitation in preferred stocks and investment-grade debt instruments for
temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, and strategies FMR may employ in
pursuit of the fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. A complete listing of the fund's policies
and limitations and more detailed information about the fund's investments
is contained in the fund's SAI. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
fund achieve its goal. Current holdings and recent investment strategies
are described in the fund's financial reports, which are sent to
shareholders twice a year. For a free SAI , call the appropriate
number listed on page .
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. Although equity securities
have a history of long-term growth in value, their prices fluctuate based
on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.
RESTRICTION: With respect to 75% of its total assets, the fund may
not purchase more than 10% of the outstanding voting securities of
any issuer.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating
to political or economic conditions in foreign countries, fluctuations in
foreign currencies, withholding or other taxes, operational risks,
increased regulatory burdens, and the potentially less stringent investor
protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign securities may be unwilling to repay
principal and interest when due, and may require that the conditions for
payment be renegotiated. All of these factors can make foreign investments,
especially those in developing countries, more volatile.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices ,
currency exchange rates or other factors that affect security values.
These techniques may involve derivative transactions such as buying and
selling options and futures contracts, entering into currency exchange
contracts or swap agreements, and purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
ILLIQUID SECURITIES. Some investments may be determined by FMR,
under the supervision of the Board of Trustees, to be illiquid, which means
that they may be difficult to sell promptly at an acceptable price.
Difficulty in selling securities may result in a loss or may be costly
to the fund.
RESTRICTION : The fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid securities.
OTHER INSTRUMENTS may include real estate-related investments.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry .
Economic, business, or political changes can affect all securities of a
similar type.
RESTRICTION S: With respect to 75% of its total assets, the
fund may not purchase a security if, as a result more than 5%
would be invested in the securities of any issuer.
These limitations do not apply to U.S. Government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTION: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. , an affiliate of FMR, is a means
of earning income. This practice could result in a loss or a delay in
recovering the fund's securities. The fund may also lend money to other
funds advised by FMR.
RESTRICTION: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks investment results that correspond to the total return
(i.e., the combination of capital changes and income) of common stocks
publicly traded in the United States. In seeking this objective, the fund
attempts to duplicate the composition and total return of the S&P 500 while
keeping transaction costs and other expenses low.
With respect to 75% of its total assets, the fund may not
purchase a security if, as a result, more than 5% would be invested
in the securities of any issuer and may not purchase more
than 10% of the outstanding voting securities of any issuer.
The fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. The fund also pays OTHER EXPENSES, which are explained
below.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund pays
the fee at the annual rate of 0 .28% of its average net assets.
OTHER EXPENSES
While the management fee is a significant component of the fund's
annual operating costs, the fund has other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for the fund. Fidelity Service Company
( FSC ) calculates the net asset value per share
( NAV ) and dividends for the fund, maintains the fund's general
accounting records , and administers the fund's securities lending
program. In fiscal 1995, the fund paid FIIOC and FSC fees equal to 0.25%
(before reimbursement, if any) and 0.04% (before reimbursement, if any),
respectively, of the fund's average net assets.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN . This plan
recognizes that FMR may use its resources, including management fees, to
pay expenses associated with the sale of fund shares. This may include
payments to third parties, such as banks or broker-dealers, that provide
shareholder support services or engage in the sale of the fund's
shares. The Board of Trustees has not authorized such payments. The fund
does not pay FMR any separate fees for this service.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity.
The fund's portfolio turnover rate for fiscal 1995 was 11 %. This
rate varies from year to year.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an Investment Professional, read that Investment
Professional's program materials in conjunction with this prospectus for
additional service features or fees that may apply. Certain features of
the fund, such as minimum initial or subsequent investment amounts, may be
modified in these programs, and administrative charges may be imposed for
the services rendered.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer . Otherwise, call your Fidelity toll-free
retirement number .
WAYS TO SET UP YOUR ACCOUNT
TRUST
FOR MONEY BEING INVESTED BY A TRUST.
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS.
For more specific information, call the appropriate number listed on page .
TAX SAVING RETIREMENT PLANS. Fidelity can set up your new account in the
fund 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 , and the corresponding information
may not apply. Retirement plan participants should refer to their
retirement plan's guidelines for further information.
(solid bullet) DEFINED CONTRIBUTION PLANS, such as 401(k) Plans,
employer-sponsored IRA programs, Thrift, Keogh or Corporate Profit-Sharing
or Money-Purchase Plans: open to self-employed people and their partners or
to corporations, to benefit themselves and their employees.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are open to employees of most
non-profit organizations.
(solid bullet) DEFINED BENEFIT PLANS are open to corporations of all sizes
to benefit their employees.
(solid bullet) 457 PLANS are open to employees of most government agencies.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called NAV, is calculated every business day. The
fund's shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent . NAV is normally
calculated at 4:00 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account by wire as
described on page . If there is no account application accompanying
this prospectus, call the appropriate number listed on page .
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Open your account by exchanging from another Fidelity
fund ,
(small solid bullet) Wire money into your account, or
(small solid bullet) Contact your Investment Professional .
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
SECURITIES EXCHANGE. Shares of the fund may be purchased in exchange for
securities you hold which meet the fund's investment objective, policies
and limitations. FDC reserves the right to refuse a securities exchange for
any reason. You may realize a gain or loss for federal income tax purposes
upon a securities exchange.
For further information, call Client Services at the appropriate telephone
number on page . DO NOT SEND SECURITIES TO THE FUND OR TO
FDC.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $100,000
TO ADD TO AN ACCOUNT $2,500
MINIMUM BALANCE $100,000
FOR 1. INFORMATION OR ASSISTANCE IN OPENING A NEW ACCOUNT:
<TABLE>
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<S> <C> <C>
Initial Investment Corporate Retirement Plans 800-962-1375
(Client Services) 800-343-0860
"Not for Profit" Retirement Plans 800-843-3001
Financial and Other Institutions
Additional Investment Corporate Retirement Plans 800-962-1375
(Client Services) 800-343-0860
"Not for Profit" Retirement Plans 800-343-6310
Financial and Other Institutions
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Exchange
from another Fidelity fund (small solid bullet) Exchange from another Fidelity
account with the same
registration, fund account with the same
including name, address, and registration, including name,
taxpayer ID number. address, and taxpayer ID number.
(phone_graphic) (small solid bullet) Use Fidelity Money Line (registered trademark) to
transfer from your bank account.
Call before your first use to verify
that this service is in place on your
account. Minimum Money Line:
$250. Maximum Money Line:
$50,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign
the account (small solid bullet) Make your check payable to
application. Make your check "Fidelity U.S. Equity Index
payable to "Fidelity U.S. Equity Index Portfolio." Indicate your fund
Portfolio." Mail to the address account number on your check and
indicated on the application. mail to the address printed on your
account statement.
(small solid bullet) C all the appropriate number listed
above for instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call the appropriate
number listed (small solid bullet) You must sign up for the wire
above to set up your account and to feature before using it. Call the
arrange a wire transaction. appropriate number listed above for
(small solid bullet) Call Client
Services before 4:00 p.m. instructions.
Eastern time. (small solid bullet) Call Client Services before 4:00
p.m. Eastern time.
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 4:00 p.m. Eastern time.
If you are selling shares of the fund as offered through an
employer-sponsored retirement plan, please contact your employer or call
your Fidelity toll-free retirement plan number.
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described on
these two pages.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE (registered
trademark), you will need to sign up for these services in advance.
TO SELL SHARES IN A RETIREMENT ACCOUNT, your request must be made in
writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing.
IF YOU ARE SELLING SOME, BUT NOT ALL OF YOUR SHARES, leave at least
$100,000 worth of shares in the account to keep it open.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner,
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank,
broker - dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the
following table.
Mail your letter to the following address:
Fidelity U.S. Equity Index Portfolio
Fidelity Investments Institutional Operations Company
P.O. Box 1182
Boston, MA 02103-1182
Unless otherwise instructed, the transfer agent will send a check to the
record address.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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PHONE All account types , except retirement (small solid bullet) Maximum check request: $100,000.
(small solid bullet) For Fidelity Money
Line (registered trademark) transfers
to your bank account: Minimum:
$2,500. Maximum: $50,000.
(phone_graphic) (small solid bullet) You may exchange to other Fidelity
funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(phone_graphic) Retirement account (small solid bullet) If you have invested through an
employer-sponsored retirement
plan, contact your employer or call
the appropriate number listed on
page .
Mail or in Person
(mail_graphic)(hand_
graphic) Retirement account (small solid bullet) The account owner should complete
a retirement distribution form. Call
the appropriate number listed on
Trust page or your Fidelity toll-free
retirement number.
(small solid bullet) The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
registration, provide a copy of the
trust document certified within the
last 60 days with a signature
guaranteed letter.
Business or Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the
account must sign the letter. Must
be accompanied by a signature
guarantee.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. Call the
appropriate number listed on page
to verify that it is in place.
Minimum wire: $100,000.
(small solid bullet) Your wire redemption request must
be received by the transfer agent
before 4:00 p.m. Eastern time for
money to be wired on the next
business day.
</TABLE>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired:
1-800-544-0118
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (quarterly for retirement
plans , monthly for all others )
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in the fund. Call the appropriate
number listed on page if you need additional copies of financial
reports.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE . You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see
"Exchange Restrictions" on page .
FIDELITY MONEY LINE (registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends are distributed in March,
June, September, and December. Capital gains are normally distributed in
April and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The fund offers three options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
For retirement accounts all distributions are automatically reinvested.
When you are over 59 1/2 years old, you can receive distributions in cash.
When the fund deducts a distribution from its NAV, the reinvestment price
is the NAV at the close of business that day. Distribution checks will be
mailed within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least
quarterly. However, it is up to you or your tax preparer to determine
whether this sale resulted in a capital gain and, if so, the amount of tax
to be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount of
your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on the
fund and its investments and these taxes generally will reduce the fund's
distributions.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the NYSE is open. FSC
normally calculates the fund's NAV as of the close of business of the NYSE,
normally 4:00 p.m. Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding.
The fund's assets are valued primarily on the basis of market
quotations. Foreign securities are valued on the basis of quotations
from the primary market in which they are traded. If quotations are not
readily available, assets are valued by a method that the Board of Trustees
believes accurately reflects fair value.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your request is received and accepted by the
transfer agent . Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Fidelity Money Line (registered trademark)
redemptions generally will be credited to your bank account on the second
or third business day after your phone call.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check or Fidelity Money
Line (registered trademark) have been collected, which can take up to
seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
For purposes of determining the minimum balance, multiple accounts
registered in the same name within the fund will be aggregated.
IF YOUR ACCOUNT BALANCE FALLS BELOW $100,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincide s with a "market timing" strategy may be disruptive to the
fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative or any other person has been authorized
to give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
APPENDIX
The fund (Product) is not sponsored, endorsed, sold or promoted by
S&P , a division of McGraw-Hill, Inc. S&P makes no representation or
warranty, express or implied, to the owners of the Product or any member of
the public regarding the advisability of investing in securities generally
or in the Product particularly or the ability of the S&P 500 to
track general stock market performance. S&P's only relationship to the
Licensee is the licensing of certain trademarks and trade names of S&P and
of the S&P 500 which is determined, composed and calculated by S&P
without regard to the Licensee or the Product. S&P has no obligation to
take the needs of the Licensee or the owners of the Product into
consideration in determining, composing or calculating the S&P 500 .
S&P is not responsible for and has not participated in the determination of
the timing of, prices at, or quantities of the Product to be issued or in
the determination or calculation of the equation by which the Product is to
be converted into cash. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Product.
S&P does not guarantee the accuracy and/or the completeness of the S&P
500 or any data included therein and S&P shall have no liability for
any errors, omissions, or interruptions therein. S&P makes no warranty,
express or implied, as to results to be obtained by Licensee, owners of the
Product, or any other person or entity from the use of the S&P 500
or any data included therein. S&P makes no express or implied
warranties, and expressly disclaims all warranties of merchantability or
fitness for a particular purpose or use with respect to the S&P 500
or any data included therein. Without limiting any of the foregoing, in
no event shall S&P have any liability for any special, punitive, indirect,
or consequential damages (including lost profits), even if notified of the
possibility of such damages.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500," and "500"
are trademarks of McGraw-Hill, Inc. and have been licensed for use by
FDC.
FIDELITY U.S. EQUITY INDEX PORTFOLIO
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
<S> <C>
Part B: Statement of Additional
Information
Form N-1A Item Number SAI Caption
10,11......................................... Cover Page
12.............................................. *
13 a,b,c.................................... Investment Policies and Limitations
d........................................... Portfolio Transactions
14 a,b........................................ Trustees and Officers
c........................................... Trustees and Officers
15 a,b..................................... Description of the Trust
15 Trustees and Officers
c..............................................
16 a(i)....................................... FMR; Trustees and Officers
a(ii)....................................... Trustees and Officers
a(iii),b................................... Management Contract
c,d...................................... Contracts with FMR Affiliates
*
e...........................................
Distribution and Service Plan
f............................................
*
g...........................................
Description of the Trust
h...........................................
Contracts with FMR Affiliates
i............................................
17 Portfolio Transactions
a,b,c.......................................
d,e..................................... *
18 a........................................ Description of the Trust
*
b...........................................
19 a....................................... Additional Purchase, Exchange and Redemption
Information
Valuation
b...........................................
*
c...........................................
20.............................................. Distributions and Taxes
21 a,b................................. Contracts with FMR Affiliates
c................................ *
22.............................................. Performance
23.............................................. *
*
* Not Applicable
</TABLE>
FIDELITY U.S. EQUITY INDEX PORTFOLIO
A FUND OF FIDELITY INSTITUTIONAL TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 19, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus (dated
April 19, 1995). Please retain this document for future reference. The
fund's financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended February 28, 1995, are
incorporated herein by reference. To obtain an additional
cop y of the fund's Prospectus and Annual Report, or this SAI, please
call Fidelity Distributors Corporation at the appropriate number listed
below.
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, please refer to your plan materials or contact that
institution 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>
<CAPTION>
<S> <C>
TABLE OF CONTENTS PAGE
Investment Policies and Limitation
Portfolio Transactions
Valuation
Performance
Additional Purchase , Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Distribution and Service Plan
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix 21
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
Brown Brothers Harriman & Company (Brown Brothers)
UEI-ptb-0495
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 fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation shall be
determined immediately after and as a result of the fund'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 fund's investment
policies and limitations.
The fund'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 fund. However, except for the fundamental investment
limitations set forth below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND 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 fund in respect of the fund's assets or earnings, provided that the
fund 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 fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that the fund may make initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts;
(5) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (less liabilities other
than borrowings). Any borrowings that come to exceed 33 1/3% of the value
of the fund's total assets by reason of a decline in net assets will be
reduced within three days to the extent necessary to comply with the 33
1/3% limitation. The fund 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
fund 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 fund's total
assets (taken at current value) would be invested in the securities of
issuers having their principal business activities in the same industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities (but this shall not prevent the fund from purchasing and
selling 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 fund 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 fund from
purchasing and selling futures contracts or marketable securities issued by
companies or other entities); or
(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 fund 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 fund may borrow money only (a) from a bank or from a registered
investment company or fund 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 fund will not
borrow from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed 15% of
the fund's total assets.
(ii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iii) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 5%
of the fund's net assets) to a registered investment company or fund for
which FMR or an affiliate serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of direct debt instruments.
(This limitation does not apply to purchases of debt securities or to
repurchase agreements.)
(iv) The fund 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.
( v ) The fund 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.
(vi) The fund does not currently intend to purchase warrants, valued at the
lower of cost or market, in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or the American
Stock Exchange. Warrants acquired by the fund in units or attached to
securities are not subject to these restrictions.
(vii) The fund does not currently intend to invest in oil, gas or other
mineral exploration or development programs or leases.
(viii) The fund 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.
(ix) The fund 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.
(x) The fund does not currently intend to purchase interests in real estate
investment trusts that are not readily marketable or interests in real
estate limited partnerships that are not listed on an exchange or traded on
the NASDAQ National Market System if, as a result, the sum of such
interests and other investments considered illiquid under limitation (ii)
would exceed 10% of the fund's net assets.
For the fund's limitations on futures and options transactions, see the
section "Limitations on Futures and Options Transactions" on page .
S&P 500. The Standard & Poor's Composite Index of 500 Stocks (S&P
500), a registered trademark of Standard & Poor's Corporation (S&P) ,
is a well-known stock market index that includes common stocks of companies
representing a significant portion of the market value of all common stocks
publicly traded in the United States. FMR believes that the performance
of the S&P 500 is representative of the performance of publicly traded
common stocks in general. Stocks in the S&P 500 are weighted according
to their market capitalization (i.e. , the number of shares
outstanding multiplied by the stock's current price), with the 62
largest stocks currently compris ing approximately 50% of the
index's value. The composition of the S&P 500 is determined by S&P
and is based on such factors as the market capitalization and trading
activity of each stock and its adequacy as a representation of stocks in a
particular industry group. S&P may change the index's composition
from time to time.
The performance of the S&P 500 is a hypothetical number which does not take
into account brokerage commissions and other costs of investing, which the
fund bears. Although S&P obtains information for inclusion in or for use
in the calculation of the S&P 500 from sources which considers reliable,
S&P does not guarantee the accuracy or the completeness of the S&P 500 or
any data included therein. S&P makes no warranty, express or implied, as to
results to be obtained by the licensee, owners of the fund, or any other
person or entity from the use of the S&P 500 or any data included therein
in connection with the rights licensed hereunder or for any other use. S&P
makes no express or implied warranties, and hereby expressly disclaims all
warranties of merchantability or fitness for a particular purpose with
respect to the S&P 500 any data included therein.
INVESTMENT DETAILS. The fund is not managed according to traditional
methods of "active" investment management, which involve the buying and
selling of securities based upon economic, financial, and market analyses
and investment judgment. Instead, the fund, utilizing a "passive" or
"indexing" investment approach, attempts to duplicate the performance of
the S&P 500. The fund may omit or remove an S&P 500 stock from its
portfolio if, following objective criteria, FMR judges the stock to be
insufficiently liquid or believes the merit of the investment has been
substantially impaired by extraordinary events or financial conditions. FMR
may purchase stocks that are not included in the S&P 500 to compensate for
these differences if it believes that their prices will move together with
the prices of S&P 500 stocks omitted from the fund's portfolio.
The ability of the fund to meet its objective depends in part on its cash
flow because investments and redemptions by shareholders generally will
require the fund to purchase or sell fund securities. A low level of
shareholder transactions will keep cash flow manageable and enhance the
fund's ability to track the S&P 500. FMR will make investment changes to
accommodate cash flow in an attempt to maintain the similarity of the
fund's portfolio to the composition of the S&P 500. In addition, the fund
will maintain a reasonable position in high-quality, short-term debt
securities and money market instruments to meet redemption requests.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
LOANS AND OTHER DIRECT 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 a risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to the fund 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 fund to supply
additional cash to the borrower on demand.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. The fund, however, may
exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the board of directors, and
shareholders of a company when FMR determines that such matters
could have a significant effect upon the value of the fund's investment in
the company. The activities that the fund 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
fund 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 fund and the risk of actual
liability if the fund is involved in litigation. No guarantee can be made,
however, that litigation against the fund may not be undertaken or
liabilities incurred.
FOREIGN INVESTMENTS. Investing in securities issued by companies or
other issuers whose principal activities are outside the United States may
involve significant risks in addition to the risks inherent in U.S.
investments. The value of securities denominated in foreign currencies and
of dividends and interest paid with respect to such securities will
fluctuate based on the relative strength of the U.S. dollar. In addition,
there is generally less publicly available information about foreign
issuers' financial condition and operations, particularly those not subject
to the disclosure and reporting requirements of the U.S. securities laws.
Foreign issuers are generally not bound by uniform accounting, auditing,
and financial reporting requirements and standards of practice comparable
to those applicable to U.S. issuers. Further, economies of particular
countries or areas of the world may differ favorably or unfavorably from
the economy of the United States.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects. The considerations noted above generally are
intensified for investments in developing countries. Developing countries
may have relatively unstable governments, economics based on only a few
industries, and securities markets that trade a small number of securities.
Foreign markets may offer less protection to investors than U.S. markets.
It is anticipated that in most cases the best available market for foreign
securities will be on exchanges or in over-the-counter markets located
outside of the United States. Foreign stock markets, while growing in
volume and sophistication, are generally not as developed as those in the
United States, and securities of some foreign issuers (particularly those
located in developing countries) may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading practices,
including those involving securities settlement where fund assets may be
released prior to receipt of payment, may expose the fund to increased risk
in the event of a failed trade or the insolvency of a foreign
broker-dealer, and may involve substantial delays. In addition, the costs
of foreign investing, including withholding taxes, brokerage commissions
and custodial costs, are generally higher than for U.S. investors. In
general, there is less overall governmental supervision and regulation of
securities exchanges, brokers, and listed companies than in the United
States. It may also be difficult to enforce legal rights in foreign
countries.
The fund may invest in foreign securities that impose restrictions on
transfer within the United States or to U.S. persons. Although securities
subject to such transfer restrictions may be marketable abroad, they may be
less liquid than foreign securities of the same class that are not subject
to such restrictions.
The fund may invest in American Depository Receipts and European Depository
Receipts (ADRs and EDRs), which are certificates evidencing ownership of
shares of a foreign-based issuer held in trust by a bank or similar
financial institution. Designed for use in the U.S. and European securities
markets, respectively, ADRs and EDRs are alternatives to the purchase of
the underlying securities in their national markets and currencies.
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 fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various
factors , including (1) the frequency of trades and quotations, (2)
the number of dealers and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the nature of the security
(including any demand or tender features) , and (5) the nature of the
marketplace for trades (including the ability to assign or offset the
fund's rights and obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, and over-the-counter options . Also,
FMR may determine loans and other direct debt instruments , and swap
agreements to be illiquid. However, with respect to over-the-counter
options the fund writes, all or a portion of the value of the underlying
instrument may be illiquid depending on the assets held to cover the option
and the nature and terms of any agreement the fund may have to close out
the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets or other
circumstances, the fund 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 fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security
will be less than the resale price , as well as delays and costs to
the fund in connection with bankruptcy proceedings), it is the fund's
current policy to engage in repurchase agreement transactions with parties
whose creditworthiness has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a fund instrument to another party, such as a bank or broker-dealer,
in return for cash and agrees to repurchase the instrument at a particular
price and time. While a reverse repurchase agreement is outstanding, the
fund will maintain appropriate liquid assets in a segregated custodial
account to cover its obligation under the agreement. The fund 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 fund's assets and may be viewed as a form of
leverage.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by
the SEC, t he fund has received permission to lend money
to , and borrow money from , other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may
be called on one day's notice . A fund will lend through the
program only when the returns are higher then those available 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. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay
in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such
as changes in real estate values and property taxes, interest rates, cash
flow of underlying real estate assets, overbuilding, and the management
skill and creditworthiness of the issuer. Real estate-related instruments
may also be affected by tax and regulatory requirements, such as those
relating to the environment.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the fund 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 fund
is permitted to engage in loan transactions only under the following
conditions: (1) the fund 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) after giving notice, the fund must be able to
terminate the loan, after giving notice, at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the borrower, as
well as amounts equivalent to any dividends, interest or other
distributions on the securities loaned and any increase in market value;
(5) the fund 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 fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SWAP AGREEMENTS. Under a typical equity swap agreement, a counterparty such
as a bank or broker-dealer agrees to pay the fund a return equal to the
dividend payments and increase in value, if any, of an index or group of
stocks (such as the the S&P 500), and the fund 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 fund is not
limited to any particular form of swap agreement if FMR determines it is
consistent with the fund's investment objective and policies.
In order to track the return of the designated index effectively, the fund
would generally have to own other assets returning approximately the same
amount as the interest rate payable by the fund 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 fund's correlation with the S&P 500. The fund 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 fund will maintain appropriate liquid assets in a segregated custodial
account to cover its obligations under swap agreements. If the fund enters
into a swap agreement on a net basis, it will segregate assets with a daily
value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If the fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The fund 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 fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The fund intends to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the fund can
commit assets to initial margin deposits and options premiums.
FMR also intends to follow certain other limitations on the fund's futures
and options activities. The fund 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 fund 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 fund's other futures or options positions, would exceed 35% of the
fund'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 fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this SAI, may be changed as regulatory agencies
permit.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
the fund 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 fund 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 fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund 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 fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the fund 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 fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
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 fund 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 fund
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 fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund 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 fund 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 fund 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 fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund 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 fund has written, however, the
fund 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 fund 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 fund 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 fund 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 fund'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 fund, 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 fund. In addition, the fund'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 fund'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 fund's index futures and
options positions will not match the price changes of the fund's other
investments.
Options and futures prices can diverge from the prices of their underlying
instruments, even if the underlying instruments match the fund'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 fund 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 fund'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 fund
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 fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund'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 fund 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 fund 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 fund's assets could impede
fund management or the fund's ability to meet redemption requests or other
current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of fund securities are placed on behalf
of the fund by FMR pursuant to authority contained in the management
contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. In selecting broker-dealers, subject to
applicable limitations of the federal securities laws, FMR
consider s 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. Generally, commissions for foreign
investments traded will be higher than for U.S. investments and may not be
subject to negotiation.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; 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 fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such
research provided by brokers - dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the fund. 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
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers ,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the fund 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 fund 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.
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.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the 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
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For the fiscal periods ended February 28, 1995 and 1994, the fund's
turnover rates were 11 % and 4 %, respectively.
For fiscal 1995 and 1994, and the period November 1, 1992 through February
28, 1993, the fund paid brokerage commissions of $ 96,102 , $93,755
and $55,413, respectively. The fund pays both commissions and spreads in
connection with the placement of portfolio transactions; FBSI is paid on a
commission basis. During fiscal 1995 and 1994, and the period November 1,
1992 through February 28, 1993, the fund paid brokerage commissions of
$ 1,200 , $ 0 and $ 0 , respectively, to FBSI. During
fiscal 1995, this amounted to approximately 1.25 % of the aggregate
brokerage commissions paid by the fund for transactions involving
approximately .44 % of the aggregate dollar amount of transactions in
which the fund paid brokerage commissions. During fiscal 1995, $1,057 of
these expenses were paid to brokerage firms that provided research,
although the provisions of such services was not necessarily a factor in
the placement of all this business with such firms.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The 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 fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or
accounts managed by FMR affiliates. It sometimes happens that the same
security is held in the portfolio of more than one of these funds
or accounts. Simultaneous transactions are inevitable when several
funds are managed by the same investment adviser, particularly when the
same security is suitable for the investment objective of more than one
fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as the fund is concerned. In other cases,
however, the ability of the fund to participate in volume transactions will
produce better executions and prices for the fund. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most 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. Most 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. Convertible
securities and 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 two-fold 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
the 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. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local 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.
PERFORMANCE
The fund may quote performance in various ways. All performance information
supplied by the fund in advertising is historical and is not intended to
indicate future returns. The fund's share price, yield and total return
fluctuate in response to market conditions and other factors, and the value
of fund shares when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for the fund are computed by dividing the fund'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 fund's net asset value per
share (NAV) at the end of the period, and annualizing the result (assuming
compounding of income) 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.
Income calculated for the purposes of calculating the fund's 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 fund's yield may not equal its
distribution rate , the income paid to your account, or the income
reported in the fund's financial statements.
Yield information may be useful in reviewing the fund's performance and in
providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates the
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in
the fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate of
return that would equal 100% growth on a compounded basis in ten years.
While average annual returns are a convenient means of comparing
investment alternatives, investors should realize that the fund's
performance is not constant over time, but changes from year to year, and
that average annual total returns represent averaged figures as opposed to
the actual year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph or similar
illustration.
NET ASSET VALUE. Charts and graphs using the fund's NAVs , adjusted
NAVs , and benchmark indices may be used to exhibit performance. An
adjusted NAV includes any distributions paid by the fund and reflects all
elements of its return. Unless otherwise indicated, the fund's adjusted
NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. The fund may illustrate performance using moving averages.
A long-term moving average is the average of each week's adjusted closing
NAV for a specified period. A short-term moving average is the average of
each day's adjusted closing NAV for a specified period. Moving Average
Activity Indicators combine adjusted closing NAVs from the last business
day of each week with moving averages for a specified period to produce
indicators showing when an NAV has crossed, stayed above, or stayed below
its moving average. On February 28, 1995, the 13-week and 39-week
long-term moving averages were 17.15 % and 16.71 %,
respectively.
HISTORICAL FUND RESULTS. The following table shows the fund's total
returns for periods ended February 28, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
One Five Life of One Five Ten
Year Years Fund Year Years Years/
Life of
Fund*
7.17 % 11.02 % 12.60 % 7.17 % 68.66 % 130.51 %
</TABLE>
* From February 17, 1988 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during these periods,
the fund's total returns would have been lower.
The following table shows the income and capital elements of the fund's
cumulative total return. The table compares the fund's return to the record
of the S&P 500, the Dow Jones Industrial Average (DJIA), and the cost of
living (measured by the Consumer Price Index, or CPI) over the same period.
The CPI information is as of the month end closest to the initial
investment date for the fund. The S&P 500 and the DJIA comparisons are
provided to show how the fund's total return compared to the record of a
broad average of common stock prices and a narrower set of stocks of major
industrial companies, respectively, over the same period. The fund has the
ability to invest in securities not included in either index, and its
investment portfolio may or may not be similar in composition to the
indices. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the fund's returns, do not include
the effect of paying brokerage commissions and other costs of investing.
During the period February 17, 1988 (commencement of operations) to
February 28, 1995, a hypothetical $100,000 investment in the fund would
have grown to $ 230,507 assuming all distributions were reinvested.
This was a period of fluctuating stock prices and the figures
below should not be considered representative of the dividend income or
capital gain or loss that could be realized by an investment in the fund
today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY U.S. EQUITY INDEX PORTFOLIO INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Reinvested Total S&P DJIA Cost of
Ended Initial Reinvested Capital Gain Value 500 Living**
$10 0 ,000 Dividend Distributions
Investment Distributions
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
2/29/92 155,800 20,536 4,037 180,37 3 182,762 188,314 119,483
2/28/93 167,300 27,410 4,335 199,04 5 202,263 200,105 123,362
2/28/94 173,600 33,878 7,608 215,08 6 219,1 34 233,887 126,466
2/28/95 180,200 40,900 9,407 230,507 235,248 251,666 130,086
</TABLE>
* From February 17, 1988 (commencement of operations).
** 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 fund 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
(their cash value at the time they were reinvested), amounted to
$ 140,334 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
the cash payments for the period would have amounted to $ 28,600 for
dividends and $ 6,800 for capital gain distributions. Tax
consequences of different investments have not been factored into the above
figures.
The yield for the S&P 500 for the fiscal year ended February 28, 1995
was 2.88%, calculated by dividing the dollar value of dividends paid by the
S&P 500 stocks during the period by the average value of the S&P 500 on
February 28, 1995. The S&P 500 yield is calculated differently from the
fund's yield. For example, the fund's yield calculation treats dividends as
accrued in anticipation of payment, rather than recording them when
paid.
From time to time, the fund may quote its performance in advertising and
other types of literature as compared to the performance of the S&P 500.
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.
The table below shows the performance of the S&P 500 for the ten years from
1986 through 1995. 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 representative of the income yield or capital gain or
loss that may be generated by the S&P 500 in the future.
STANDARD & POOR'S COMPOSITE INDEX OF 500 STOCKS
Price Change
Year-End in Index Dividend
Year Index Value* For Year Reinvestment Total Return
1994 459.27 -1.54 +2.86 +1.32
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
* 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.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. 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 fund's performance may be compared to stock, bond, and money
market mutual fund performance indices prepared by Lipper or other
organizations. When comparing these indices, it is important to remember
the risk and return characteristics of each type of investment. For
example, while stock mutual funds may offer higher potential returns, they
also carry the highest degree of share price volatility. Likewise, money
market funds may offer greater stability of principal, but generally do not
offer the higher potential returns from stock mutual funds.
From time to time, the fund's performance also may be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions . Mutual
funds differ from bank investments in several respects. For example, the
fund may offer greater liquidity or higher potential returns than CDs, the
fund does not guarantee your principal or your return , and fund
shares are not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to assess savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the 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.
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 or other
goals, charitable giving, and the Fidelity credit card. In addition,
Fidelity may quote or reprint financial or business publications and
periodicals, including model portfolios or allocations, as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the desirability
of owning a particular mutual fund, and Fidelity services and products.
Fidelity may also reprint, and use as advertising and sales literature,
articles from Fidelity Focus, a quarterly magazine provided free of charge
to Fidelity fund shareholders.
The fund may present its fund number, Quotron(Trademark) number, CUSIP
number, and discuss or quote its current fund manager.
VOLATILITY. The fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these
measures to those of other funds. Measures of volatility seek to compare
the fund's historical share price fluctuations or total returns to those of
a benchmark. Measures of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
The fund 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 fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more
shares when prices are low. While such a strategy does not assure a profit
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 fund 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.
As of February 28 , 1995, FMR managed over $ 25 billion in
tax-free fund assets, $ 72 billion in money market fund assets,
$ 159 billion in equity fund assets, $ 40 billion in
international fund assets, and $ 21 billion in Spartan fund assets.
The fund may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad .
ADDITIONAL PURCHASE , EXCHANGE AND REDEMPTION INFORMATION
The fund is open for business and its NAV is calculated each day the NYSE
is open for trading. The NYSE has designated the following holiday closings
for 1995: New Year's Day (observed), Washington's Birthday , Good
Friday, Memorial Day , Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the NYSE may modify its holiday schedule at any
time. 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 fund securities are
traded in other markets on days when the NYSE is closed, the fund's NAV may
be affected on days when investors do not have access to the f und to
purchase or redeem shares. Certain Fidelity funds may follow different
holiday closing schedules.
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 fund'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 fund 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
fund 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.
In the prospectus, the fund 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 fund's income may qualify for the
dividends - received deduction available to corporate shareholders to
the extent that the fund's income is derived from qualifying dividends.
Because the fund 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 dividends from the fund that qualifies for the
deduction generally will be less than 100%. The fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of the fund's dividends
derived from certain U.S. government obligations may be exempt from
s t ate and local taxation. Short-term capital gains are distributed
as dividend income. The fund will send each shareholder a notice in January
describing the tax status of dividends and capital gain distributions for
the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund 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 fund, and such shares
are held six months or less 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 fund are taxable to shareholders as dividends, not as
capital gains.
For fiscal year ended February 28, 1995, the fund hereby designates
approximately $ 2,837,000 as a capital gain dividend for the purpose
of the dividend-paid deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because the fund 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.
TAX STATUS OF THE FUND. The fund intends to qualify each year 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 or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis. The fund intends to comply with other tax rules
applicable to regulated investment companies, including a requirement that
capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts and options are included in
this 30% calculation, which may limit the fund's investments in such
instruments.
The fund is treated as a separate entity from the other fund of
Fidelity Institutional Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent company organized
in 1972. Through ownership of voting common stock and the execution of a
shareholders' voting agreement, Edward C. Johnson, 3d, Johnson family
members, and various trusts for the benefit of the Johnson family form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions: Fidelity Service Co. (FSC), which is
the transfer and shareholder servicing agent for certain of the funds
advised by FMR; FIIOC, which performs shareholder servicing functions for
institutional customers and funds sold through intermediaries; and Fidelity
Investments Retail Marketing Company, which provides marketing services to
various companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
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., 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., 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 is a member of 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 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., and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he serves
as a Trustee of First Union Real Estate Investments, a Trustee and member
of the Executive Committee of the Cleveland Clinic Foundation, a Trustee
and member of the Executive Committee of University School (Cleveland), and
a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, One Harborside, 680 Steamboat Road, Greenwich, CT, Trustee,
is Executive-in-Residence (1995) at Columbia University Graduate School of
Business and a financial consultant. From 1987 to January 1995, Mr. Kirk
was a Professor at Columbia University Graduate School of Business. Prior
to 1987, he was Chairman of the Financial Accounting Standards Board. Mr.
Kirk is a Director of General Re Corporation (reinsurance) and 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, Vice Chairman of the Board of Trustees of the Greenwich Hospital
Association, and as a Member of the Public Oversight Board of the American
Institute of Certified Public Accountants' SEC Practice Section (1995).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield 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, 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),
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 Rensselaer Polytechnic 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., and AppleSouth, Inc. (restaurants, 1992).
WILLIAM J. HAYES, Vice President (1994), is Vice President of Fidelity's
equity funds; Senior Vice President of FMR; and Managing Director of FMR
Corp.
ROBERT H. MORRISON, Manager of Security Transactions of Fidelity's equity
funds, is Vice President of FMR.
ARTHUR S. LORING, Secretary, is Senior Vice President (1993) and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and
Clerk of FDC.
STEPHEN P. JONAS, Treasurer (1995), is Treasurer and Vice President of FMR
(1993). Mr. Jonas is also Treasurer of FMR Texas Inc. (1994), Fidelity
Management & Research (U.K.) Inc. (1994), and Fidelity Management &
Research (Far East) Inc. (1994). Prior to becoming Treasurer of FMR, Mr.
Jonas was Senior Vice President, Finance - Fidelity Brokerage Services,
Inc. (1991-1992) and Senior Vice President, Strategic Business Systems -
Fidelity Investments Retail Marketing Company (1989-1991).
JOHN H. COSTELLO, Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH, Assistant Treasurer (1994), is an employee of FMR (1994).
Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was
Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial Officer
of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President,
Assistant Controller, and Director of the Accounting Department - First
Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended February 28, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part of Fund the Fund Complex*
Expenses from the
Complex*
Fund Complex*
J. Gary Burkhead** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 929 5,200 52,000 125,00 0
Phyllis Burke Davis 884 5,200 52,000 122,00 0
Richard J. Flynn 1,161 0 52,00 0 154,50 0
E. Bradley Jones 918 5,200 49,40 0 123,50 0
Edward C. Johnson 3d** 0 0 0 0
Donald J. Kirk 941 5,200 52,00 0 125,00 0
Peter S. Lynch** 0 0 0 0
Gerald C. McDonough 941 5,200 52,00 0 125,00 0
Edward H. Malone 952 5,200 44,20 0 128,00 0
Marvin L. Mann 918 5,200 52,00 0 125,00 0
Thomas R. Williams 941 5,200 52,00 0 126,50 0
</TABLE>
* Information is as of December 31, 1994 for all 206 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments are not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On February 28, 1995, the Trustees and officers of the fund owned in the
aggregate less than 1% of the fund's outstanding shares.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund 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, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws, developing management and shareholder services for the fund; and
furnishing reports, evaluations and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC and FSC, the fund pays all of its expenses, without limitation, that
are not assumed by those parties. The fund pays for the typesetting,
printing and mailing of its proxy materials to shareholders, legal expenses
and the fees of the custodian, auditor and non-interested Trustees.
Although the fund's current management contract provides that the fund will
pay for typesetting, printing and mailing prospectuses, statements of
additional information, notices and reports to shareholders, the Trust, on
behalf of the fund, has entered into a revised transfer agent agreement
with FIIOC, pursuant to which FIIOC bears the costs of providing these
services to existing shareholder s. Other expenses paid by the
fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company Institute
dues, and the costs of registering shares under federal and state
securities laws. The fund is also liable for such nonrecurring expenses as
may arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated January
13, 1988 , which was approved by shareholders on October 19, 1988.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0 .28% of the average net assets
of the fund throughout the month. For the fiscal years ended 1995, 1994,
for the period November 1, 1992 through February 28, 1993, and for
the fiscal year ended October 31, 1992, FMR received $ 0, $0, $0, and
$0, after reimbursement, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and repayment of the
reimbursement by the fund will lower its total returns.
Effective January 18, 1988, FMR voluntarily agreed, subject to revision or
termination, to reimburse the fund if and to the extent that its aggregate
operating expenses, including management fees, were in excess of an annual
rate of 0 .28% of the average net assets of the fund. If this
reimbursement had not been in effect, for the fiscal years ended February
1995, 1994, for the period November 1, 1992 through February 28,
1993, and for the fiscal year ended October 31, 1992, FMR would have
received fees amounting to $5,488,000, $4,629,801, $1,334,064 and
$3,414,778, respectively, which would have been equivalent to 0.28% of
a verage net assets of the fund .
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund'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 fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf
of the fund (the "Plan") pursuant to Rule 12b-1 under the 1940 Act (the
Rule). 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 a fund except pursuant to a plan
approved on behalf of the fund under the Rule. The Plan, as
approved by the Trustees, allows the fund to incur certain expenses
that might be considered to constitute indirect payment by the fund
of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Trustees have not
authorized such payments to date. The Plan also specifically recognizes
that FMR, either directly or through FDC , 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 fund. In addition, the Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of the fund, or to third parties, including banks, that render shareholder
support services.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan , and
have determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees noted
that the Plan does not authorize payments by the fund other than those made
to FMR under its management contract with the fund. To the extent that
the Plan gives FMR and FDC greater flexibility in connection with the
distribution of shares of the fund, additional sales of the fund's shares
may result. Furthermore , certain shareholder support services may be
provided more effectively under the Plan by local entities with whom
shareholders have other relationships.
The Plan was approved by shareholders on October 19, 1988.
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 by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC 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 fund
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 interpretation of federal law expressed
herein, and banks and financial institutions may be required to register as
dealers pursuant to state law.
The fund may execute portfolio transactions with , and purchase
securities issued by , depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
CONTRACTS WITH FMR AFFILIATES
FIIOC is transfer, dividend disbursing and shareholder servicing agent for
the fund. Under the trust's contract with FIIOC, the fund pays annual
account fees and asset-based fees for each account based on account size.
The asset-based fees are subject to adjustments if the year-to-date total
return of the S&P 500 is greater than positive or negative 15%.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and all
other reports, notices, and statements to shareholders, with the exception
of proxy statements.
FSC performs the calculations necessary to determine NAV and dividends for
the fund, maintains the fund's accounting records, and administers the
fund's securities lending program. The fee rates for pricing and
bookkeeping services are based on the fund'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 maximum of $750,000 per year. Pricing and
bookkeeping fees, including related out-of-pocket expenses, paid by the
fund for the fiscal years ended February 28, 1995 and 1994, and the period
November 1, 1992 through February 28, 1993, and for the fiscal year ended
October 31, 1992, were $733,000, $652,621, and $200,809, and $525,623,
(before reimbursement, if any) respectively.
FSC also receives fees for administering the fund's securities lending
programs. Securities lending fees are based on the number and duration of
individual securities loans. Currently, the fund is authorized to
participate in the securities lending program. Securities lending fees paid
by the fund for the fiscal years ended, February 28, 1995, 1994, and the
period November 1, 1992 through February 28, 1993, and for the fiscal year
ended October 31, 1992, were $3,000, $815, $430, and $815 respectively.
The fund has a Distribution Agreement with FDC, a Massachusetts corporation
organized July 18, 1960. FDC 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 FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, 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 organized as a Massachusetts business trust . Currently,
there are two portfolios of the Trust: Fidelity U.S. Equity Index Portfolio
and Fidelity U.S. Bond Index Portfolio. The Declaration of Trust permits
the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the
fund , the right of the Trust or fund to use the identifying
name "Fidelity" may be withdrawn.
The assets of the Trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund 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 funds, 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 fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the Trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
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 fund's property of any shareholder held
personally liable for the obligations of the fund. The Declaration of Trust
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
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 fund 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 fund'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 fund may, as
set forth in the Declaration of Trust, call meetings of the Trust or a fund
for any purpose related to the Trust or fund, 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 fund 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 fund. If not so terminated, the Trust and its funds will
continue indefinitely.
As of March 31, 1995, there were no owners of record of beneficially 5% or
more of outstanding shares of the fund.
CUSTODIAN. Brown Brothers, 40 Water Street, Boston, Massachusetts, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of the fund's assets and the appointment of subcustodian banks
and clearing agencies. The custodian takes no part in determining the
investment policies of the fund or in deciding which securities are
purchased or sold by the fund. The fund 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 fund'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 fund relationships.
AUDITOR. Price Waterhouse LLP, 160 Federal Street, Boston,
Massachusetts serves as the Trust's independent accountant. The auditor
examines financial statements for the fund and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal
period ended February 28, 1995 are included in the fund's Annual Report,
which is a separate report attached to the Prospectus. The fund' s
financial statements and financial highlights are incorporated herein by
reference.
APPENDIX
The following is a list of the 500 stocks comprising the S&P 500 as of
February 28, 1995.
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
ALL TEL Corp.
Aluminum Co. of America
ALZA Corp. CI.A
Amdahl Corp.
Amerada Hess
American Brands Inc.
American Electric Power
American Express
American General
American Greetings CI . A
American Home Products
American Int'l. Group
American Stores
A T&T
Ameritech
Amgen
Amoco
AMP Inc.
AMR Corp.
Andrew Corp.
Anheuser-Busch
Apple Computer
Archer-Daniels-Midland
Armco Inc.
Armstrong World
ASARCO Inc.
Ashland Inc.
Atlantic Richfield
Autodesk, Inc.
Automatic Data Processing Inc.
Avery Dennison Corp.
Avon Products
Baker Hughes
Ball Corp.
Bally Entertainment Corp.
Baltimore Gas & Electric
Banc One Corp.
Bank of Boston
BankAmerica Corp.
Bankers Trust N.Y.
Bard (C.R.) Inc.
Barnett Banks Inc.
Barrick Gold Corp.
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
Boatmen's Bancshares
Boeing Company
Boise Cascade
Boston Scientific
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
Carolina Power & Light
Caterpillar Inc.
CBS Inc.
Centex Corp.
Central & South West
Ceridian Corp.
Champion International
Charming Shoppes
Chase Manhattan
Chemical Banking Corp.
Chevron Corp.
Chrysler Corp.
Chubb Corp.
CIGNA Corp.
Cincinnati Milacron
CINergy Corp.
Circuit City Stores
C i s co Systems
Citicorp
Clark Equipment
Clorox Co.
Coastal Corp.
Coca Cola Co.
Colgate-Palmolive
Columbia Gas System
Columbia/HCA Healthcare Corp.
Comcast Class A Special
Community Psych Centers
Compaq Computer
Computer Associates Intl.
Computer Sciences Corp.
ConAgra Inc.
Conrail Inc.
Consolidated Edison
Consolidated Freightways
Consolidated Natural Gas
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 Corp.
Entergy Corp.
Exxon Corp.
E-Systems
Federal Express
Federal Home Loan Mtg.
Federal Natl. Mtge.
Federal Paper Board
First Chicago Corp.
First Fidelity Bancorp
First Data
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)
General Dynamics
General Electric
General Mills
General Motors
General Public Utilities
General Re Corp.
General Signal
Genuine Parts
Georgia-Pacific
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.
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
Micron Technology
Microsoft Corp.
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 City Corp.
National Education
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.
NorAm Energy Corp.
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
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 In c.
Praxair, Inc.
Premark International
Price/Costco
Procter & Gamble
Promus Inc.
Providian Corp.
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.
Santa Fe Pacific Gold 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.
Silicon Graphics
Sigma Aldrich
Skyline Corp.
Snap-On Tools
Sonat Inc.
Southern Co.
Southwest Airlines
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.
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 Inc.
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
U nicom Corp.
Unilever N.V.
Union Camp
Union Carbide
Union Electric Co.
Union Pacific
Unisys Corp.
United Healthcare 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. Healthcare Inc.
U.S. Surgical
Varity Corp.
Viacom , Inc.
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 Corp.
Zenith Electronics
Zurn Industries
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 20 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and MA, on the thirteenth day of April 1995.
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)
/s/Edward C. Johson 3d(dagger) President and Trustee April 13, 1995
Edward C. Johnson 3d (Principal Executive Officer)
/s/ Stephan P. Jonas Treasurer April 13, 1995
Stephan P. Jonas
/s/ J. Gary Burkhead Trustee April 13, 1995
J. Gary Burkhead
/s/ Ralph F. Cox* Trustee April 13, 1995
Ralph F. Cox
/s/ Phyllis Burke Davis* Trustee April 13, 1995
Phyllis Burke Davis
/s/ Richard J. Flynn* Trustee April 13, 1995
Richard J. Flynn
/s/ E. Bradley Jones* Trustee April 13, 1995
E. Bradley Jones
/s/ Donald J. Kirk* Trustee April 13, 1995
Donald J. Kirk
/s/ Peter S. Lynch* Trustee April 13, 1995
Peter S. Lynch
/s/ Edward H. Malone* Trustee April 13, 1995
Edward H. Malone
/s/ Marvin L. Mann* Trustee April 13, 1995
Marvin L. Mann
/s/ Gerald C. McDonough* Trustee April 13, 1995
Gerald C. McDonough
/s/ Thomas R. Williams* Trustee April 13, 1995
Thomas R. Williams
(dagger) Signatures affixed by
pursuant to a power of attorney dated
December 15, 1994, and filed herewith.
* Signatures affixed by
pursuant to a power of attorney dated
December 15, 1994, and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
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 Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
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 December 15, 1994
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 Annuity Fund Fidelity Income Fund
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 Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
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 Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust 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
</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.
Djinis, 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 fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis 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
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial Statements and Financial Highlights, included in the
Annual Report for U.S. Bond Index Portfolio for the fiscal year ended
February 28, 1995 are attached to the portfolio's prospectus, are
incorporated by reference into the fund's Statement of Additional
Information, and were filed on April 12, 1995 for Fidelity Institutional
Trust (No. 811-5251) pursuant to Rule 30d-1 under the Investment Company
Act of 1940 and are incorporated herein by reference.
(2) Financial Statements and Financial Highlights, included in the Annual
Report for U.S. Equity Index Portfolio for the fiscal year ended February
28, 1995 are attached to the portfolio's prospectus, are incorporated by
reference into the fund's Statement of Additional Information, and were
filed on April 12, 1995 for Fidelity Institutional Trust (No. 811-5251)
pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are
incorporated herein by reference.
(b) Exhibits:
(1)(a) Declaration of Trust dated as of July 21, 1987 was electronically
filed and is incorporated by reference as Exhibit 1 to Post-Effective
Amendment No. 17.
(b) Supplement to the Declaration of Trust dated November 30, 1988
was electronically filed and is incorporated by reference as Exhibit 1(a)
to Post-Effective Amendment No. 17.
(2) Bylaws of the Trust effective May 19, 1994 were electronically filed
and are incorporated herein by reference as Exhibit 2 to Union Street
Trust's Post-Effective Amendment No. 87.
(3) None.
(4) None.
(5)(a) Management Contract between the Registrant, on behalf of Fidelity
U.S. Bond Index Portfolio, and Fidelity Management & Research Co. dated
January 13, 1988 was electronically filed and is incorporated herein by
reference as Exhibit 5(a) to Post-Effective Amendment No. 19.
(b) Management Contract between the Registrant, on behalf of Fidelity
U.S. Equity Index Portfolio, and Fidelity Management & Research Co. was
electronically filed and is incorporated herein by reference as Exhibit
5(b) to Post-Effective Amendment No. 17.
(6)(a) General Distribution Agreement between the Registrant, on behalf
of Fidelity U.S. Bond Index Portfolio, and Fidelity Distributors
Corporation dated January 13, 1988 was electronically filed and is
incorporated herein by reference as Exhibit 6(a) to Post-Effective
Amendment No. 19.
(b) General Distribution Agreement between the Registrant, on behalf
of Fidelity U.S. Equity Index Portfolio, and Fidelity Distributors
Corporation was electronically filed and is incorporated herein by
reference as Exhibit 6(b) to Post-Effective Amendment No. 17.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, was electronically filed and
is incorporated herein by reference as Exhibit 7 to Union Street Trust's
Post-Effective Amendment No. 87.
(8)(a) Custodian Agreement between the Registrant, on behalf of Fidelity
U.S. Bond Index, and The Bank of New York dated December 1, 1994 is
electronically filed herein as Exhibit 8(a).
(b) Custodian Agreement between the Registrant, on behalf of Fidelity
U.S Equity Index, and Brown Brothers Harriman & Co. dated September 1, 1994
is electronically filed herein as Exhibit 8(b).
(9) Not applicable.
(10) Not applicable.
(11) Consent of Price Waterhouse LLP is filed herein as Exhibit 11.
(12) None.
(13) Written assurances that purchase representing initial capital was
made for investment purposes without any present intention of redeeming a
reselling were electronically filed and are incorporated herein by
reference as Exhibit 13 to Post-Effective Amendment No. 17.
(14)(a) Retirement Plan for Fidelity Individual Retirement Accounts, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(a) to Union Street Trust's Post-Effective Amendment
No. 87.
(b) Retirement Plan for Portfolio Advisory Services Individual
Retirement Account, as currently in effect, was electronically filed and is
incorporated herein by reference as Exhibit 14(i) to Union Street Trust's
Post-Effective Amendment No. 87.
(c) Retirement Plan for NFSC Individual Retirement Account, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(h) to Union Street Trust's Post-Effective Amendment
No. 87.
(d) NFSC Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference as Exhibit
14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference as Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity 403(b)(7) Individual Custodial Agreement, as currently
in effect, was electronically filed and is incorporated herein by reference
as Exhibit 14(j) to Union Street Trust's Post-Effective Amendment No. 87.
(g) Fidelity 403(b) Custodial Agreement, as currently in effect, was
electronically filed and is incorporated herein by reference as Exhibit
14(e) to Union Street Trust's Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Profit Sharing/401k Plan, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(l) to Union Street Trust's Post-Effective Amendment
No. 87.
(i) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(m) to Union Street Trust's Post-Effective Amendment
No. 87.
(15) 12b-1 Plan for:
(a) Fidelity U.S. Bond Index Portfolio was electronically filed and
is incorporated herein by reference as Exhibit 15(a) to Post-Effective
Amendment No. 19.
(b) Fidelity U.S. Equity Index Portfolio was electronically filed and
is incorporated herein by reference as Exhibit 15(b) to Post-Effective
Amendment No. 17.
(16)(a) Schedules and data points for total return for Fidelity U.S.
Equity Index Portfolio are electronically filed herein as Exhibit 16(a).
(b) Schedules and data points for 30-day yield for Fidelity U.S.
Bond Index Portfolio are electronically filed herein as Exhibit 16(b).
(c) Schedules and data points for moving averages for Fidelity U.S.
Equity Index Portfolio are electronically filed herein as Exhibit 16(c).
(17) Financial Data Schedules for Fidelity U.S. Bond Index Portfolio and
Fidelity U.S. Equity Index Portfolio are electronically filed herein as
Exhibit 17.
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
February 28, 1995
Title of Class Number of
Record Holders
Fidelity U.S. Equity Index Portfolio 628, 227
Fidelity U.S. Bond Index Portfolio 170, 213
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 or her in connection with any claim, action suit
or proceeding in which he or she is involved by virtue of his or her
service as a trustee, 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 and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff 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.
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.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993) and Treasurer
of the funds advised by FMR (1995); Treasurer of FMR
Texas Inc. (1993), Fidelity Management & Research (U.K.)
Inc. (1993), and Fidelity Management & Research (Far
East) Inc. (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
Division 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.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
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:
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' respective
custodian: The Bank of New York, 110 Washington Street, New York, N.Y. or
Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Fidelity U.S. Bond Index Portfolio and
Fidelity U.S. Equity Index Portfolio, undertakes, provided the information
required by Item 5A is contained in the annual report, to furnish each
person to whom a prospectus has been delivered, upon their request and
without charge, a copy of the Registrant's latest annual report to
shareholders.
CUSTODIAN AGREEMENT
Dated as of: December 1, 1994
Between
Each of the Investment Companies
Listed on Appendix "A" Attached Hereto
and
The Bank of New York
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 1
2.03 Security Purchases 2
2.04 Exchanges of Securities 2
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 3
2.08 Stock Dividends, Rights, Etc. 3
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 4
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 5
2.14 Securities Loans 5
2.15 Collections 6
2.16 Dividends, Distributions and Redemptions 6
2.17 Proceeds from Shares Sold 6
2.18 Proxies, Notices, Etc. 6
2.19 Bills and Other Disbursements 7
2.20 Nondiscretionary Functions 7
2.21 Bank Accounts 7
2.22 Deposit of Fund Assets in Securities Systems 7
2.23 Other Transfers 8
2.24 Establishment of Segregated Account 9
2.25 Custodian's Books and Records . 9
2.26 Opinion of Fund's Independent Certified Public
Accountants 9
2.27 Reports of Independent Certified Public Accountants 10
2.28 Overdraft Facility 10
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 10
3.01 Proper Instructions and Special Instructions 10
3.02 Authorized Persons 11
3.03 Persons Having Access to Assets of the Portfolios 11
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 11
i
IV. SUBCUSTODIANS 11
4.01 Domestic Subcustodians 12
4.02 Foreign Subcustodians and Interim Subcustodians 12
4.03 Special Subcustodians 13
4.04 Termination of a Subcustodian 13
4.05 Certification Regarding Foreign Subcustodians 13
V. STANDARD OF CARE; INDEMNIFICATION 14
5.01 Standard of Care 14
5.02 Liability of Custodian for Actions of Other Persons 15
5.03 Indemnification 15
5.04 Investment Limitations 16
5.05 Fund's Right to Proceed 16
VI. COMPENSATION 17
VII. TERMINATION 17
7.01 Termination of Agreement as to One or More Funds 17
7.02 Termination as to One or More Portfolios 18
VIII. DEFINED TERMS 18
IX. MISCELLANEOUS 19
9.01 Execution of Documents, Etc 19
9.02 Representative Capacity; Nonrecourse Obligations 19
9.03 Several Obligations of the Funds and the Portfolios 19
9.04 Representations and Warranties 19
9.05 Entire Agreement 20
9.06 Waivers and Amendments 20
9.07 Interpretation 20
9.08 Captions 20
9.09 Governing Law 20
9.10 Notices 21
IX. MISCELLANEOUS 21
9.11 Assignment 21
9.12 Counterparts 21
9.13 Confidentiality; Survival of Obligations 21
ii
APPENDICES
Appendix "A" - List of Funds and Portfolios
Appendix "B" - List of Additional Custodians,
Special Subcustodians and Foreign Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
iii
CUSTODIAN AGREEMENT
AGREEMENT made as of the 1st day of December, 1994 between each of the
Investment Companies Listed on Appendix "A" hereto, as the same may be
amended from time to time (each a "Fund" and collectively the "Funds") and
The Bank of New York (the "Custodian").
W I T N E S S E T H
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, each Fund desires to appoint the Custodian as custodian on behalf
of each of its Portfolios in accordance with the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations thereunder, under the terms and conditions set forth in
this Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and appoints
the Custodian as a custodian, subject to the terms and provisions of this
Agreement. Each Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by each
of its Portfolios from time to time during the term of this Agreement and
shall specify to which of its Portfolios such cash, securities and other
assets are to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of each Fund's Portfolios delivered to the
Custodian and, on behalf of such Portfolios, the Custodian shall, from time
to time, accept delivery of cash, securities and other assets for
safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of each Fund's
Portfolios either: (i) by physical possession of the share certificates or
other instruments representing such securities in registered or bearer
form; or (ii) in book-entry form by a Securities System (as hereinafter
defined) in accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
the Custodian as a fiduciary or custodian for customers; and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by the Custodian only upon receipt of the securities: (a) by
the Custodian; (b) by a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; (iii) in the case
of the purchase of securities, the settlement of which occurs outside of
the United States of America, the Custodian may make payment therefor and
receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof; and (iv) in
the case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by Institutional
Clients with respect to such securities, the receipt of such securities and
the payment therefor take place in different countries, the Custodian may
receive delivery of such securities and make payment therefor in accordance
with standard industry custom and practice for such securities generally
accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Article V hereof. For purposes of this
Agreement, an "Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or sells
securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the Custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; (ii) in the case of the
sale of securities in which, in accordance with standard industry custom
and practice generally accepted by Institutional Clients with respect to
such securities, the delivery of such securities and receipt of payment
therefor take place in different countries, the Custodian may deliver such
securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care
set forth in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or the return of, such securities by
the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability
to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify each applicable Fund of such
action in writing by facsimile transmission or in such other manner as such
Fund and the Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, a Fund on behalf of any
applicable Portfolio relating to compliance with the rules of the Options
Clearing Corporation or of any registered national securities exchange or
similar organization(s), the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the purchase or
writing of an option on a security or securities index by the applicable
Portfolio; (b) deposit and maintain in a segregated account, securities
(either physically or by book-entry in a Securities System), cash or other
assets; and (c) pay, release and/or transfer such securities, cash or other
assets in accordance with notices or other communications evidencing the
expiration, termination or exercise of such options furnished by the
Options Clearing Corporation, the securities or options exchange on which
such options are traded, or such other organization as may be responsible
for handling such option transactions. Each Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for the
sufficiency of assets held in any segregated account established in
compliance with applicable margin maintenance requirements and the
performance of other terms of any option contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
a Fund, on behalf of any applicable Portfolio, the Custodian and any
futures commission merchant (a "Procedural Agreement"), the Custodian
shall: (a) receive and retain confirmations, if any, evidencing the
purchase or sale of a futures contract or an option on a futures contract
by the applicable Portfolio; (b) deposit and maintain in a segregated
account, cash, securities and other assets designated as initial,
maintenance or variation "margin" deposits intended to secure the
applicable Portfolio's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by
the Portfolio, in accordance with the provisions of any Procedural
Agreement designed to comply with the rules of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market (such
as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release assets from and/or transfer assets
into such margin accounts only in accordance with any such Procedural
Agreements. Each Fund, on behalf of its applicable Portfolios, and such
futures commission merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance with applicable margin
maintenance requirements and the performance of any futures contract or
option on a futures contract in accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
applicable Fund on behalf of such Portfolio and the Custodian, as
collateral for borrowings effected by such Portfolio, provided that such
borrowed money is payable by the lender (a) to or upon the Custodian's
order, as Custodian for such Portfolio, and (b) concurrently with delivery
of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to
collectively, as "Interest Bearing Deposits") for the account of a
Portfolio, the Custodian shall purchase such Interest Bearing Deposits in
the name of the Portfolio with such banks or trust companies (including the
Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the applicable Fund may direct pursuant to Proper Instructions.
Such Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the applicable Fund on behalf of its Portfolio may determine
and direct pursuant to Proper Instructions. The Custodian shall include in
its records with respect to the assets of each Portfolio appropriate
notation as to the amount and currency of each such Interest Bearing Bank
Deposit, the accepting Banking Institution and all other appropriate
details, and shall retain such forms of advice or receipt evidencing such
account, if any, as may be forwarded to the Custodian by the Banking
Institution. The responsibilities of the Custodian to each Fund for
Interest Bearing Deposits accepted on the Custodian's books in the United
States on behalf of the Fund's Portfolios shall be that of a U.S. bank for
a similar deposit. With respect to Interest Bearing Deposits other than
those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or, so long as the Custodian acts in accordance with
Proper Instructions, for the failure of such Banking Institution to pay
upon demand. Upon receipt of Proper Instructions, the Custodian shall take
such reasonable actions as the applicable Fund deems necessary or
appropriate to cause each such Interest Bearing Deposit Account to be
insured to the maximum extent possible by all applicable deposit insurers
including, without limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other Than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the applicable Fund may
determine and direct pursuant to Proper Instructions. The Custodian shall
be responsible for the transmission of cash and instructions to and from
the currency broker or Banking Institution with which the contract or
option is made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions and
the maintenance of proper records as set forth in Section 2.25. The
Custodian shall have no duty with respect to the selection of the currency
brokers or Banking Institutions with which a Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions to
comply with the terms of any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to a Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio of such Fund with
the Custodian as principal. The Custodian shall be responsible for the
selection of the currency brokers or Banking Institutions and the failure
of such currency brokers or Banking Institutions to comply with the terms
of any contract or option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to each Fund with
respect to portfolio securities and other assets of each of such Fund's
Portfolios; (b) promptly credit to the account of each applicable Portfolio
all income and other payments relating to portfolio securities and other
assets held by the Custodian hereunder upon Custodian's receipt of such
income or payments or as otherwise agreed in writing by the Custodian and
the applicable Fund; (c) promptly endorse and deliver any instruments
required to effect such collections; (d) promptly execute ownership and
other certificates and affidavits for all federal, state and foreign tax
purposes in connection with receipt of income, capital gains or other
payments with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or transfer
of such securities or other assets; and (e) promptly file any certificates
or other affidavits for the refund or reclaim of foreign taxes paid, and
promptly notify each applicable Fund of any changes to law, interpretative
rulings or procedures regarding such reclaims, and otherwise use all
available measures customarily used to minimize the imposition of foreign
taxes at source, and promptly inform each applicable Fund of alternative
means of minimizing such taxes of which the Custodian shall become aware
(or with the exercise of reasonable care should have become aware);
provided, however, that with respect to portfolio securities registered in
so-called street name, the Custodian shall use its best efforts to collect
amounts due and payable to each Fund with respect to its Portfolios. The
Custodian shall promptly notify each applicable Fund in writing by
facsimile transmission or in such other manner as each such Fund and the
Custodian may agree in writing if any amount payable with respect to
portfolio securities or other assets of the Portfolios of such Fund(s) is
not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect to
portfolio securities or other assets that are in default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the
applicable Fund or Funds in such Proper Instructions; or (b) upon receipt
of Special Instructions, as otherwise directed by the applicable Fund or
Funds, for the purpose of the payment of dividends or other distributions
to shareholders of each applicable Portfolio, and payment to shareholders
who have requested repurchase or redemption of their shares of the
Portfolio(s) (collectively, the "Shares"). For purposes of this Agreement,
a "Distribution Account" shall mean an account established at a Banking
Institution designated by the applicable Fund on behalf of one or more of
its Portfolios in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Funds, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify each applicable Fund of Custodian's receipt of cash in payment for
Shares issued by such Fund by facsimile transmission or in such other
manner as the Fund and Custodian may agree in writing. Upon receipt of
Proper Instructions, the Custodian shall: (a) deliver all federal funds
received by the Custodian in payment for Shares in payment for such
investments as may be set forth in such Proper Instructions and at a time
agreed upon between the Custodian and the applicable Fund; and (b) make
federal funds available to the applicable Fund as of specified times agreed
upon from time to time by the applicable Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to the
accounts of each applicable Portfolio.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to each
applicable Fund, in the most expeditious manner practicable, all forms of
proxies, all notices of meetings, and any other notices or announcements
affecting or relating to securities owned by one or more of the applicable
Fund's Portfolios that are received by the Custodian, any Subcustodian, or
any nominee of either of them, and, upon receipt of Proper Instructions,
the Custodian shall execute and deliver, or cause such Subcustodian or
nominee to execute and deliver, such proxies or other authorizations as may
be required. Except as directed pursuant to Proper Instructions, neither
the Custodian nor any Subcustodian or nominee shall vote upon any such
securities, or execute any proxy to vote thereon, or give any consent or
take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of each Portfolio held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States shall be that of a
U.S. bank for a similar deposit. The responsibilities of the Custodian to
each applicable Fund for deposits accepted on any Subcustodian's books
shall be governed by the provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the applicable Fund deems necessary
or appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by a
Portfolio in: (a) The Depository Trust Company; (b) the Participants Trust
Company; (c) any book-entry system as provided in (i) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which each
applicable Fund has previously approved by Special Instructions (as
hereinafter defined) (each of the foregoing being referred to in this
Agreement as a "Securities System"). Use of a Securities System shall be
in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers and shall be so designated
on the books and records of the Securities System.
(B) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such Account
and shall not be entitled to a lien against the assets in such Account for
extensions of credit to the Custodian other than for payment of the
purchase price of such assets.
(C) Each Fund hereby designates the Custodian as the party in whose name
any securities deposited by the Custodian in the Account are to be
registered.
(D) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(E) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall
deliver to each applicable Fund on the next succeeding business day daily
transaction reports which shall include each day's transactions in the
Securities System for the account of each applicable Portfolio. Such
transaction reports shall be delivered to each applicable Fund or any agent
designated by such Fund pursuant to Proper Instructions, by computer or in
such other manner as such Fund and the Custodian may agree in writing.
(F) The Custodian shall, if requested by a Fund pursuant to Proper
Instructions, provide such Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(G) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of any Portfolio
maintained with such Securities System.
Section 2.23. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer to
or receive from a third party that has been appointed to serve as an
additional custodian of one or more Portfolios (an "Additional Custodian")
securities, cash and other assets of such Portfolio(s) in accordance with
such Proper Instructions. Each Additional Custodian shall be identified as
such on Appendix B, as the same may be amended from time to time in
accordance with the provisions of Section 9.06(c).
(b) Upon receipt of Special Instructions, the Custodian shall make such
other dispositions of securities, funds or other property of a Portfolio in
a manner or for purposes other than as expressly set forth in this
Agreement, provided that the Special Instructions relating to such
disposition shall include a statement of the purpose for which the delivery
is to be made, the amount of funds and/or securities to be delivered, and
the name of the person or persons to whom delivery is to be made, and shall
otherwise comply with the provisions of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the SEC
relating to the maintenance of segregated accounts by registered investment
companies; or (c) for such other purposes as set forth, from time to time,
in Special Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by a Fund in the preparation of reports
to such Fund's shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of each Portfolio as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of each Portfolio, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), (v) dividends and interest received, (vi) the amount of
tax withheld by any person in respect of any collection made by the
Custodian or any Subcustodian, and (vii) the amount of reclaims or refunds
for foreign taxes paid; and (c) cancelled checks and bank records related
thereto. The Custodian shall keep such other books and records of each
Fund as such Fund shall reasonably request. All such books and records
maintained by the Custodian shall be maintained in a form acceptable to the
applicable Fund and in compliance with the rules and regulations of the
SEC, including, but not limited to, books and records required to be
maintained by Section 31(a) of the 1940 Act and the rules and regulations
from time to time adopted thereunder. All books and records maintained by
the Custodian pursuant to this Agreement shall at all times be the property
of each applicable Fund and shall be available during normal business hours
for inspection and use by such Fund and its agents, including, without
limitation, its independent certified public accountants. Notwithstanding
the preceding sentence, no Fund shall take any actions or cause the
Custodian to take any actions which would cause, either directly or
indirectly, the Custodian to violate any applicable laws, regulations or
orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as a Fund may request to
obtain from year to year favorable opinions from such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of a Fund, the Custodian shall deliver to such Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by any Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Portfolio, the Custodian may, in its
discretion, provide an overdraft (an "Overdraft") to the applicable Fund on
behalf of such Portfolio, in an amount sufficient to allow the completion
of such payment. Any Overdraft provided hereunder: (a) shall be payable
on the next Business Day, unless otherwise agreed by the applicable Fund
and the Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the applicable Fund on behalf
of the applicable Portfolio at a rate agreed upon in writing, from time to
time, by the Custodian and the applicable Fund. The Custodian and each
Fund acknowledge that the purpose of such Overdrafts is to temporarily
finance the purchase or sale of securities for prompt delivery in
accordance with the terms hereof, or to meet emergency expenses not
reasonably foreseeable by such Fund. The Custodian shall promptly notify
each applicable Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as such Fund and the
Custodian may agree in writing. At the request of the Custodian, each
applicable Fund, on behalf of one or more of its Portfolios, shall pledge,
assign and grant to the Custodian a security interest in certain specified
securities of the applicable Portfolio, as security for Overdrafts provided
to such Portfolio, under the terms and conditions set forth in Appendix "C"
attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the applicable Fund by one or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or other
oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) by or on behalf
of the applicable Fund by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Custodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the applicable Fund by tested telex or
in writing in the manner set forth in clause (i) above, but the lack of
such confirmation shall in no way affect any action taken by the Custodian
in reliance upon such oral instructions prior to the Custodian's receipt of
such confirmation. Each Fund and the Custodian are hereby authorized to
record any and all telephonic or other oral instructions communicated to
the Custodian. Proper Instructions may relate to specific transactions or
to types or classes of transactions, and may be in the form of standing
instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the applicable Fund or any other
person designated by the Treasurer of such Fund in writing, which
countersignature or confirmation shall be (i) included on the same
instrument containing the Proper Instructions or on a separate instrument
relating thereto, and (ii) delivered by hand, by facsimile transmission, or
in such other manner as the applicable Fund and the Custodian agree in
writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the applicable Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, each Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of such Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of such Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized by a Fund to give Proper Instructions or to issue Special
Instructions, such persons shall no longer be considered an Authorized
Person or authorized to issue Special Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of any Fund shall
have physical access to the assets of any Portfolio of that Fund held by
the Custodian nor shall the Custodian deliver any assets of a Portfolio for
delivery to an account of such person; provided, however, that nothing in
this Section 3.03 shall prohibit (a) any Authorized Person from giving
Proper Instructions, or any person authorized to issue Special Instructions
from issuing Special Instructions, so long as such action does not result
in delivery of or access to assets of any Portfolio prohibited by this
Section 3.03; or (b) each Fund's independent certified public accountants
from examining or reviewing the assets of the Portfolios of the Fund held
by the Custodian. Each Fund shall deliver to the Custodian a written
certificate identifying such Authorized Persons, Trustees, officers,
employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify each applicable
Fund in writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and such Fund may, in its sole discretion, by
written notice to the Custodian executed by an Authorized Person disapprove
of the appointment of such Domestic Subcustodian. If, following notice by
the Custodian to each applicable Fund regarding appointment of a Domestic
Subcustodian and the expiration of thirty (30) days after the date of such
notice, such Fund shall have failed to notify the Custodian of its
disapproval thereof, the Custodian may, in its discretion, appoint such
proposed Domestic Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of each applicable Fund on behalf of its
applicable Portfolio(s) (which approval may be withheld in the sole
discretion of such Board of Trustees or other governing body or entity)
with respect to (i) the identity and qualifications of any proposed Foreign
Subcustodian, (ii) the country or countries in which, and the securities
depositories or clearing agencies, if any, through which, any proposed
Foreign Subcustodian is authorized to hold securities and other assets of
the applicable Portfolio(s), and (iii) the form and terms of the
subcustodian agreement to be entered into between such proposed Foreign
Subcustodian and the Custodian. Each such duly approved Foreign
Subcustodian and the countries where and the securities depositories and
clearing agencies through which they may hold securities and other assets
of the applicable Portfolios shall be listed on Appendix "B" attached
hereto, as it may be amended, from time to time, in accordance with the
provisions of Section 9.05(c) hereof. Each Fund shall be responsible for
informing the Custodian sufficiently in advance of a proposed investment by
one of its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect a Fund's rights or the Foreign Subcustodian's
obligations or duties to a Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the applicable Fund in writing by facsimile
transmission or in such other manner as such Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the applicable Fund in such
Special Instructions to hold such security or other asset. (Any Person
appointed as a subcustodian pursuant to this Section 4.02(b) is hereinafter
referred to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more Portfolios,
appoint one or more banks, trust companies or other entities designated in
such Special Instructions to act as a subcustodian for purposes of: (i)
effecting third-party repurchase transactions with banks, brokers, dealers
or other entities through the use of a common custodian or subcustodian;
(ii) establishing a joint trading account for the applicable Portfolio(s)
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which such Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by each applicable Fund in Special Instructions.
(Each such designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940 Act
and the rules and regulations thereunder and the terms and provisions of
this Agreement. The Custodian shall not amend any subcustodian agreement
entered into with a Special Subcustodian, or agree to change or permit any
changes thereunder, or waive any rights under such agreement, except upon
prior approval pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to each applicable Fund and, if
necessary or desirable, appoint a replacement Subcustodian in accordance
with the provisions of Section 4.01 or Section 4.02, as the case may be.
In addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to each applicable Fund, terminate
any Domestic Subcustodian, Foreign Subcustodian or Interim Subcustodian,
and (B) shall, upon receipt of Special Instructions, terminate any
Subcustodian with respect to each applicable Fund, in accordance with the
termination provisions under the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of a Fund, the Custodian shall deliver to such Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian for such Fund and its Portfolios; (ii) the
countries in which and the securities depositories and clearing agents
through which each such Foreign Subcustodian is then holding cash,
securities and other assets of any Portfolio of such Fund; and (iii) such
other information as may be requested by such Fund to ensure compliance
with Rule 17(f)-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to each Fund for all loss, damage and
expense suffered or incurred by such Fund or its Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Fund or Portfolio,
(i) the Custodian shall, (ii) the Custodian shall cause any applicable
Domestic Subcustodian or Foreign Subcustodian to, and (iii) the Custodian
shall use its best efforts to cause any applicable Interim Subcustodian or
Special Subcustodian to, use all commercially reasonable efforts and take
all reasonable steps under the circumstances to mitigate the effects of
such event and to avoid continuing harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the applicable Fund or Funds, or (ii) at
the expense of the Custodian, such other counsel as the applicable Fund(s)
and the Custodian may agree upon; provided, however, with respect to the
performance of any action or omission of any action upon such advice, the
Custodian shall be required to conform to the standard of care set forth in
Section 5.01(a).
(e) Expenses of the Funds. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to each applicable Fund
for all reasonable costs and expenses incurred by such Fund in connection
with any claim by such Fund against the Custodian arising from the
obligations of the Custodian hereunder, including, without limitation, all
reasonable attorneys' fees and expenses incurred by such Fund in asserting
any such claim, and all expenses incurred by such Fund in connection with
any investigations, lawsuits or proceedings relating to such claim;
provided, that such Fund has recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by a Fund, insofar as such
loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for such Fund by entities other than the Custodian prior to
the Custodian's appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by a Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse such Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the actions or omissions of an Interim
Subcustodian unless such loss, damage or expense is caused by, or results
from, the negligence, misfeasance or misconduct of the Custodian; provided,
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against such Interim Subcustodian to protect the interests of the Funds and
the Portfolios.
(c) Special Subcustodians and Additional Custodians. Notwithstanding the
provisions of Section 5.01 to the contrary and except as otherwise provided
in any subcustodian agreement to which the Custodian, a Fund and any
Special Subcustodian or Additional Custodian are parties, the Custodian
shall not be liable to a Fund for any loss, damage or expense suffered or
incurred by such Fund or any of its Portfolios resulting from the actions
or omissions of a Special Subcustodian or Additional Subcustodian, unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian or Additional Custodian to protect the interests of the Funds
and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the use by the Custodian of a Securities System,
unless such loss, damage or expense is caused by, or results from, the
negligence, misfeasance or misconduct of the Custodian; provided, however,
that in the event of any such loss, damage or expense, the Custodian shall
take all reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Funds and the Portfolios.
(e) Reimbursement of Expenses. Each Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, each Fund severally and not jointly agrees to indemnify and
hold harmless the Custodian and its nominees from all loss, damage and
expense (including reasonable attorneys' fees) suffered or incurred by the
Custodian or its nominee caused by or arising from actions taken by the
Custodian on behalf of such Fund in the performance of its duties and
obligations under this Agreement; provided, however, that such indemnity
shall not apply to loss, damage and expense occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian or its nominee.
In addition, each Fund agrees severally and not jointly to indemnify any
Person against any liability incurred by reason of taxes assessed to such
Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of such Fund's
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. No Fund shall be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified such Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by a Fund may be sought
and subject to applicable law and the ruling of any court of competent
jurisdiction, such Fund shall be entitled to participate in any such
litigation or proceeding and, after written notice from such Fund to any
Person, such Fund may assume the defense of such litigation or proceeding
with counsel of its choice at its own expense in respect of that portion of
the litigation for which such Fund may be subject to an indemnification
obligation; provided, however, a Person shall be entitled to participate in
(but not control) at its own cost and expense, the defense of any such
litigation or proceeding if such Fund has not acknowledged in writing its
obligation to indemnify the Person with respect to such litigation or
proceeding. If such Fund is not permitted to participate or control such
litigation or proceeding under applicable law or by a ruling of a court of
competent jurisdiction, such Person shall reasonably prosecute such
litigation or proceeding. A Person shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing each applicable Fund with adequate notice of any such
settlement or judgment, and without each such Fund's prior written consent.
All Persons shall submit written evidence to each applicable Fund with
respect to any cost or expense for which they are seeking indemnification
in such form and detail as such Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the applicable Fund and such Fund agrees to
indemnify the Custodian and its nominees, for any loss, damage or expense
suffered or incurred by the Custodian and its nominees arising out of any
violation of any investment or other limitation to which such Fund is
subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, each Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused such Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that such Fund has
not been made whole for any such loss or damage. If the Custodian makes
such Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon such Fund's election to enforce
any rights of the Custodian under this Section 5.05, such Fund shall
reasonably prosecute all actions and proceedings directly relating to the
rights of the Custodian in respect of the loss, damage or expense incurred
by such Fund; provided that, so long as such Fund has acknowledged in
writing its obligation to indemnify the Custodian under Section 5.03 hereof
with respect to such claim, such Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by such Fund without the Custodian's
consent and provided further, that if such Fund has not made an
acknowledgement of its obligation to indemnify, such Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with each Fund and take all
actions reasonably requested by such Fund in connection with such Fund's
enforcement of any rights of the Custodian. Each Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.05; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in
writing, from time to time, by the Custodian and such Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds. With
respect to each Fund, this Agreement shall continue in full force and
effect until the first to occur of: (a) termination by the Custodian by an
instrument in writing delivered or mailed to such Fund, such termination to
take effect not sooner than ninety (90) days after the date of such
delivery; (b) termination by such Fund by an instrument in writing
delivered or mailed to the Custodian, such termination to take effect not
sooner than thirty (30) days after the date of such delivery; or (c)
termination by such Fund by written notice delivered to the Custodian,
based upon such Fund's determination that there is a reasonable basis to
conclude that the Custodian is insolvent or that the financial condition of
the Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such notice
or at such later time as such Fund shall designate. In the event of
termination pursuant to this Section 7.01 by any Fund (a "Terminating
Fund"), each Terminating Fund shall make payment of all accrued fees and
unreimbursed expenses with respect to such Terminating Fund within a
reasonable time following termination and delivery of a statement to the
Terminating Fund setting forth such fees and expenses. Each Terminating
Fund shall identify in any notice of termination a successor custodian or
custodians to which the cash, securities and other assets of its Portfolios
shall, upon termination of this Agreement with respect to such Terminating
Fund, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement as to a Terminating Fund shall
become effective, the Custodian may deliver to a bank or trust company
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities and other
assets of such Terminating Fund's Portfolios held by the Custodian and all
instruments held by the Custodian relative thereto and all other property
of the Terminating Fund's Portfolios held by the Custodian under this
Agreement. Thereafter, such bank or trust company shall be the successor
of the Custodian with respect to such Terminating Fund under this
Agreement. In the event that securities and other assets of such
Terminating Fund's Portfolios remain in the possession of the Custodian
after the date of termination hereof with respect to such Terminating Fund
owing to failure of the Terminating Fund to appoint a successor custodian,
the Custodian shall be entitled to compensation for its services in
accordance with the fee schedule most recently in effect, for such period
as the Custodian retains possession of such securities and other assets,
and the provisions of this Agreement relating to the duties and obligations
of the Custodian and the Terminating Fund shall remain in full force and
effect. In the event of the appointment of a successor custodian, it is
agreed that the cash, securities and other property owned by a Terminating
Fund and held by the Custodian, any Subcustodian or nominee shall be
delivered to the successor custodian; and the Custodian agrees to cooperate
with such Terminating Fund in the execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more of a Fund's Portfolios (but less than
all of its Portfolios) by delivery of an amended Appendix "A" deleting such
Portfolios pursuant to Section 9.05(b) hereof, in which case termination as
to such deleted Portfolios shall take effect thirty (30) days after the
date of such delivery. The execution and delivery of an amended Appendix
"A" which deletes one or more Portfolios shall constitute a termination of
this Agreement only with respect to such deleted Portfolio(s), shall be
governed by the preceding provisions of Section 7.01 as to the
identification of a successor custodian and the delivery of cash,
securities and other assets of the Portfolio(s) so deleted, and shall not
affect the obligations of the Custodian and any Fund hereunder with respect
to the other Portfolios set forth in Appendix "A," as amended from time to
time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Terminating Fund 7.01
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations to such Fund under this Agreement or any applicable
subcustodian agreement with respect to such Fund, provided that the
exercise by the Custodian or any Subcustodian of any such rights shall in
all events be in compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper Instructions,
all such documents, instruments or agreements as may be reasonable and
necessary or desirable in order to effectuate any of the transactions
contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH FUND
IS ON FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR
PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND
PROPERTY OF EACH FUND'S RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT
NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD
PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING
OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios. WITH
RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS PORTFOLIOS
ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
OBLIGATIONS ARISING UNDER SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF,
THE CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION
SOLELY TO THE ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION
RELATES AS THOUGH EACH FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY
SEPARATE WRITTEN INSTRUMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of Each Fund. Each Fund hereby
severally and not jointly represents and warrants that each of the
following shall be true, correct and complete with respect to each Fund at
all times during the term of this Agreement: (i) the Fund is duly organized
under the laws of its jurisdiction of organization and is registered as an
open-end management investment company under the 1940 Act; and (ii) the
execution, delivery and performance by the Fund of this Agreement are (w)
within its power, (x) have been duly authorized by all necessary action,
and (y) will not (A) contribute to or result in a breach of or default
under or conflict with any existing law, order, regulation or ruling of any
governmental or regulatory agency or authority, or (B) violate any
provision of the Fund's corporate charter, Declaration of Trust or other
organizational document, or bylaws, or any amendment thereof or any
provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to each Fund that each of the following
shall be true, correct and complete at all times during the term of this
Agreement: (i) the Custodian is duly organized under the laws of its
jurisdiction of organization and qualifies to act as a custodian to
open-end management investment companies under the provisions of the 1940
Act; and (ii) the execution, delivery and performance by the Custodian of
this Agreement are (w) within its power, (x) have been duly authorized by
all necessary action, and (y) will not (A) contribute to or result in a
breach of or default under or conflict with any existing law, order,
regulation or ruling of any governmental or regulatory agency or authority,
or (B) violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the
Custodian, on the other, with respect to the subject matter hereof and
accordingly, supersedes as of the effective date of this Agreement any
custodian agreement heretofore in effect between each Fund and the
Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios of each Fund for which the Custodian serves as custodian may be
amended from time to time to add one or more Portfolios for one or more
Funds, by each applicable Fund's execution and delivery to the Custodian of
an amended Appendix "A", and the execution of such amended Appendix by the
Custodian, in which case such amendment shall take effect immediately upon
execution by the Custodian; (b) Appendix "A" may be amended from time to
time to delete one or more Portfolios (but less than all of the Portfolios)
of one or more of the Funds, by each applicable Fund's execution and
delivery to the Custodian of an amended Appendix "A", in which case such
amendment shall take effect thirty (30) days after such delivery, unless
otherwise agreed by the Custodian and each applicable Fund in writing; (c)
Appendix "B" listing Foreign Subcustodians, Special Subcustodians and
Additional Custodians approved by any Fund may be amended from time to time
to add or delete one or more Foreign Subcustodians, Special Subcustodians
or Additional Custodians for a Fund or Funds by each applicable Fund's
execution and delivery to the Custodian of an amended Appendix "B", in
which case such amendment shall take effect immediately upon execution by
the Custodian; and (d) Appendix "C" setting forth the procedures relating
to the Custodian's security interest with respect to each Fund may be
amended only by an instrument in writing executed by each applicable Fund
and the Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and any Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement with respect to such Fund as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative
or additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Agreement or affect any other Fund.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to any Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer of the Fidelity Funds
Telephone: (617) 563-7000
Telefax: (617) 476-4195
(b) If to the Custodian:
The Bank of New York
90 Washington Street, 22nd Floor
New York, New York 10286
Attn: Joseph F. Keenan, Vice President
Telephone: (212) 495-2116
Telefax: (212) 495-2975
or to such other address as a Fund or the Custodian may have designated in
writing to the other.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of each Fund severally and the Custodian and their
respective successors and assigns, provided that, subject to the provisions
of Section 7.01 hereof, neither the Custodian nor any Fund may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. With respect
to each Fund, this Agreement shall become effective when one or more
counterparts have been signed and delivered by such Fund and the Custodian.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on The Bank of New York
Appendix "A" Attached Hereto, on Behalf
of each of Their Respective Portfolios
By: /s/ Gary French By: /s/ Stephen E. Grunston
Name: Gary French Name: Stephen E. Grunston
Title: Treasurer Title: Vice President
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
The Bank of New York and each of the following Investment Companies
Dated as of December 1, 1994
The following is a list of the Funds and their respective Portfolios for
which the Custodian shall serve under a Custodian Agreement dated as of
December 1, 1994:
Fund Portfolio Effective as of:
Fidelity Advisor Annuity Fund Fidelity Advisor Annuity Government
Investment Fund December 1, 1994
Fidelity Advisor Annuity High Yield Fund December 1, 1994
Fidelity Advisor Series II Fidelity Advisor Government Investment Fund
December 1, 1994
Fidelity Advisor High Yield Fund December 1, 1994
Fidelity Advisor Short Fixed-Income Fund December 1, 1994
Fidelity Advisor IV Fidelity Advisor Limited Term Bond Fund December 1,
1994
Fidelity Institutional Short-Intermediate Government Portfolio December 1,
1994
Fidelity Real Estate High Income Fund December 1, 1994
Fidelity Advisor Series VIII Fidelity Advisor Strategic Income Fund
December 1, 1994
Fidelity Charles Street Trust Fidelity Short-Intermediate Government Fund
December 1, 1994
Spartan Short-Term Income Fund December 1, 1994
Spartan Investment-Grade Bond Fund December 1, 1994
Fidelity Commonwealth Trust Fidelity Intermediate Bond Fund December 1,
1994
Fidelity Devonshire Trust Spartan Long-Term Government Bond Fund December
1, 1994
Spartan Adjustable Rate Government Fund December 1, 1994
Fidelity Fixed-Income Trust Fidelity Short-Term Bond Portfolio December 1,
1994
Fidelity Investment Grade Bond Fund December 1, 1994
Spartan Government Income Fund December 1, 1994
Spartan High Income Fund December 1, 1994
Spartan Short-Intermediate Government Fund December 1, 1994
Fidelity Government Securities Fund Fidelity Government Securities Fund
December 1, 1994
Fidelity Hereford Street Trust Spartan Money Market Fund December 1, 1994
Fidelity Income Fund Fidelity Ginnie Mae Portfolio December 1, 1994
Fidelity Mortgage Securities Portfolio December 1, 1994
Spartan Limited Maturity Government Fund December 1, 1994
Fidelity Institutional Cash Portfolios U.S. Treasury Portfolio II December
1, 1994
Fidelity Institutional Trust Fidelity U.S. Bond Index Portfolio December 1,
1994
Fidelity Phillips Street Trust Fidelity Cash Reserves December 1, 1994
Fidelity School Street Trust Spartan Bond Strategist December 1, 1994
Fidelity Select Portfolios Money Market Portfolio December 1, 1994
Fidelity Summer Street Trust Fidelity Capital & Income Fund December 1,
1994
Fidelity Union Street Trust Spartan Ginnie Mae Fund December 1, 1994
Fidelity Union Street Trust II Fidelity Daily Income Trust December 1,
1994
Spartan World Money Market Fund December 1, 1994
Variable Insurance Products Fund High Income Portfolio December 1, 1994
Variable Insurance Products Fund II Investment Grade Bond Portfolio
December 1, 1994
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies The Bank of New York
listed on this Appendix "A", on behalf
of each of their respective Portfolios
By: /s/ Gary French By: /s/ Stephen E. Grunston
Name: Gary French Name: Stephen E. Grunston
Title: Treasurer Title: Vice President
Appendix "B"
To
Custodian Agreement
Between
The Bank of new York and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of December 15, 1994
The following is a list of Additional Custodians, Special Subcustodians
and Foreign Subcustodians under the Custodian Agreement dated as of
December 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
None
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Morgan Guaranty Trust Co. of New York FICASH
Chemical Bank, N.A. Third Party Repurchase Agreements*
* Chemical Bank, N.A. will act as Special Subcustodian with respect to
third party repurchase agreements for the
following Portfolios only;
FUND PORTFOLIO
Fidelity Institutional Cash Portfolios U.S. Treasury Portfolio II
Fidelity Hereford Street Trust Spartan Money Market Fund
Fidelity Select Portfolios Money Market Portfolio
Fidelity Union Street Trust II Fidelity Daily Income Trust
Spartan World Money Market Fund
Fidelity Phillips Street Trust Fidelity Cash Reserves
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina First National Bank of Boston, Buenos Aires Caja de Valores,
S.A.
Australia Australia and New Zealand Banking Austraclear Limited
Group Ltd. (ANZ), Melbourne
The Reserve Bank Information and
Transfer System (RITS)
Austria GiroCredit Bank AG der Osterreichische Kontrollbank
Osterreichischen Sparkassen (GiroCredit) Aktiengesellschaft (OEKB)
Belgium Banque Bruxelles Lambert Caisse Interprofessionnelle de Depot
et de Virement de Titres (CIK)
Brazil First National Bank of Boston, Sao Paulo Stock Exchange
Sao Paulo (BOVESPA), Sistema Especial de
Liquidacao e Custodia (SELIC)
Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A (CLC)
Canada Royal Bank of Canada Canadian Depository for Securities,
Ltd. (CDS)
Chile Banco de Chile None
First National Bank of Boston, Santiago
China- Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing
& Registration Corp. (SSCCRC)
China- Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration
Corp. Ltd. (SSRC)
Colombia Cititrust Colombia S.A., Sociedad Fiduciaria, None
Bogota
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen-VP Center
Finland Union Bank of Finland Ltd., Helsinki None
France Banque Paribas, Paris SICOVAM
Germany Dresdner Bank AG Deutscher Kassenverein AG (DKV)
Greece Alpha Credit Bank, A.E. None
Hong Kong The Hongkong & Shanghai Banking Hong Kong Securities Clearing
Co.,
Corp. Ltd., Hong Kong Ltd. (HKSCC); Central Clearing &
Settlement System (CCASS)
Hungary Citibank Budapest Rt. None
India Hongkong & Shanghai Banking Corp. Ltd., None
Bombay
Indonesia Hongkong & Shanghai Banking Corp. Ltd., None
Jakarta
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)
Israel Israel Discount Bank None
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.
Citibank, N.A., Milan
Japan Yasuda Trust & Banking Co. Ltd. Japan Securities Depository
Center
(JASDEC)
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository Sdn.
Bhd. (MCD)
Mexico Citibank, N.A., Mexico City Institucion para el Deposito de
Valores- S.D. INDEVAL, S.A. de Banco Nacional de Mexico S.A.,
Mexico, D.F. C.V.
Netherlands ABN-AMRO, Bank N.V., Amsterdam Nederlands Centraal Instituut
voor Giraal Effectenverkeer BV (NECIGEF)/KAS
Associatie, N.V. (KAS)
New Zealand Australia and New Zealand Banking Austraclear Limited (RBNA)
through
Group Ltd. (ANZ) the Reserve Bank of New Zealand
Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)
Pakistan Standard Chartered Bank, Karachi None
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Hongkong & Shanghai Banking Corp. Ltd., None
Manila
Poland Bank Handlowy W. Warszawie, S.A. National Depository of
Securities
Warsaw
Portugal Banco Comercial Portugues, S.A. Central de Valores Mobiliaros
(Interbolsa)
Singapore United Overseas Bank Central Depository Pte Ltd. (CDP)
South Africa Standard Bank of South Africa Ltd., None
Johannesburg
South Korea Bank of Seoul Korean Securities Depository (KSD)
Spain Banco Bilbao Vizcaya Servicio de Compensacio'n y
Liquidacio'n de Valores (SCLV)
Sri Lanka Standard Chartered Bank, Colombo Central Depository System,
(Pvt) Limited (CDS)
Sweden Skandinaviska Enskilda Banken, Stokholm Vardepappercentralen VPC
AB
Switzerland Union Bank of Switzerland, Zurich Schweizerische Effecten-
Giro A. G. (SEGA)
Taiwan Hongkong and Shanghai Banking Corp., Ltd., Taiwan Securities
Central Depository
Taipei Co., Ltd., (TSCD)
Thailand The Siam Commercial Bank Public Company Ltd. Share Depository
Center (SDC)
Transnational CEDEL S.A., Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium.
Turkey Citibank, N.A., Istanbul Takas ve Saklama A.S., (TvS)
United Kingdom The Bank of New York, London None
Uruguay The First National Bank of Boston, Montevideo None
Venezuela Citibank, N.A., Caracas None
Each of the Investment Companies Listed
on Appendix "A" to the Custodian Agreement,
on Behalf of each of Their Respective Portfolios
By: /s/ Gary French
Name: Gary French
Title: Treasurer
Appendix "C" to the
Custodian Agreement
Between
Each of the Investment Companies
Listed on Appendix "A" Thereto
And
THE BANK of NEW YORK
Dated as of December 1, 1994
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the applicable Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a security interest in Collateral
(as hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, securities
held by the Custodian on behalf of the Portfolio having a fair market value
(as determined in accordance with the procedures set forth in the
prospectus for the Portfolio) equal to the aggregate of all Overdraft
Obligations of such Portfolio: (i) identified in any Pledge Certificate
executed on behalf of such Portfolio; or (ii) designated by the Custodian
for such Portfolio pursuant to Section 3 of this Appendix C. Such
securities shall consist of marketable securities held by the Custodian on
behalf of such Portfolio or, if no such marketable securities are held by
the Custodian on behalf of such Portfolio, such other securities designated
by the applicable Fund in the applicable Pledge Certificate or by the
Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the applicable Fund and delivered by such Fund to the Custodian
by facsimile transmission or in such other manner as the applicable Fund
and the Custodian may agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the applicable
Fund by facsimile transmission or in such other manner as such Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the applicable Fund and
the Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business on
the first Business Day following the Business Day on which the applicable
Fund receives Written Notice requesting security for such Overdraft
Obligation and stating the amount of such Overdraft Obligation, the
applicable Fund, on behalf of such Portfolio, shall pledge, assign and
grant to the Custodian a first priority security interest, by delivering to
the Custodian, a Pledge Certificate executed by such Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the
applicable Fund shall fail: (a) to pay, on behalf of the applicable
Portfolio, the Overdraft Obligation described in such Written Notice; (b)
to deliver to the Custodian a Pledge Certificate pursuant to Section 2; or
(c) to identify substitute securities pursuant to Section 6 upon the sale
or maturity of any securities identified as Collateral, the Custodian may,
by Written Notice to the applicable Fund specify Collateral which shall
secure the applicable Overdraft Obligation. Such Fund, on behalf of any
applicable Portfolio, hereby pledges, assigns and grants to the Custodian a
first priority security interest in any and all Collateral specified in
such Written Notice; provided that such pledge, assignment and grant of
security shall be deemed to be effective only upon receipt by the
applicable Fund of such Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify a Fund by Written Notice that the fair market value
of the Collateral securing any Overdraft Obligation of one of such Fund's
Portfolios is less than the amount of such Overdraft Obligation, such Fund,
on behalf of the applicable Portfolio, shall deliver to the Custodian,
within one (1) Business Day following the Fund's receipt of such Written
Notice, an additional Pledge Certificate describing additional Collateral.
If such Fund shall fail to deliver such additional Pledge Certificate, the
Custodian may specify Collateral which shall secure the unsecured amount of
the applicable Overdraft Obligation in accordance with Section 3 of this
Appendix C.
Section 5. Release of Collateral. Upon payment by a Fund, on behalf of
one of its Portfolios, of any Overdraft Obligation secured by the pledge of
Collateral, the Custodian shall promptly deliver to such Fund a Release
Certificate pursuant to which the Custodian shall release Collateral from
the lien under the applicable Pledge Certificate or Written Notice pursuant
to Section 3 having a fair market value equal to the amount paid by such
Fund on account of such Overdraft Obligation. In addition, if at any time
a Fund shall notify the Custodian by Written Notice that such Fund desires
that specified Collateral be released and: (a) that the fair market value
of the Collateral securing any Overdraft Obligation shall exceed the amount
of such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to such Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. A Fund may substitute securities
for any securities identified as Collateral by delivery to the Custodian of
a Pledge Certificate executed by such Fund on behalf of the applicable
Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by a Fund on behalf of any of its individual
Portfolios shall secure only the Overdraft Obligations of such Portfolio.
In no event shall the pledge of Collateral by one of a Fund's Portfolios be
deemed or considered to be security for the Overdraft Obligations of any
other Portfolio of such Fund or of any other Fund.
Section 8. Custodian's Remedies. Upon (a) a Fund's failure to pay any
Overdraft Obligation of an applicable Portfolio within thirty (30) days
after receipt by such Fund of a Written Notice demanding security
therefore, and (b) one (1) Business Day's prior Written Notice to such
Fund, the Custodian may elect to enforce its security interest in the
Collateral securing such Overdraft Obligation, by taking title to (at the
then prevailing fair market value), or selling in a commercially reasonable
manner, so much of the Collateral as shall be required to pay such
Overdraft Obligation in full. Notwithstanding the provisions of any
applicable law, including, without limitation, the Uniform Commercial Code,
the remedy set forth in the preceding sentence shall be the only right or
remedy to which the Custodian is entitled with respect to the pledge and
security interest granted pursuant to any Pledge Certificate or Section 3.
Without limiting the foregoing, the Custodian hereby waives and
relinquishes all contractual and common law rights of set off to which it
may now or hereafter be or become entitled with respect to any obligations
of any Fund to the Custodian arising under this Appendix "C" to the
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on The Bank of New York
Schedule "A" to the Custodian Agreement, on
Behalf of Each of Their Respective Portfolios
By: /s/ Gary French By: /s/ Stephen E. Grunston
Name: Gary French Name: Stephen E. Grunston
Title: Treasurer Title: Vice President
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to [Section 2 or Section 4] of Appendix "C"
attached to the Agreement, the Fund, on behalf of [ ] (the
"Portfolio"), hereby pledges, assigns and grants to the Custodian a first
priority security interest in the securities listed on Exhibit "A" attached
to this Pledge Certificate (collectively, the "Pledged Securities"). Upon
delivery of this Pledge Certificate, the Pledged Securities shall
constitute Collateral, and shall secure all Overdraft Obligations of the
Portfolio described in that certain Written Notice dated , 19 ,
delivered by the Custodian to the Fund. The pledge, assignment and grant
of security in the Pledged Securities hereunder shall be subject in all
respect to the terms and conditions of the Agreement, including, without
limitation, Sections 7 and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of 19 .
[FUND], on Behalf of [Portfolio]
By: ___________________
Name: ___________________
Title: ___________________
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to Section 5 of Appendix "C" attached to the
Agreement, the Custodian hereby releases the securities listed on Exhibit
"A" attached to this Release Certificate from the lien under the [Pledge
Certificate dated ___________, 19 or the Written Notice delivered
pursuant to Section 3 of Appendix "C" dated _________, 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of 19 .
THE BANK OF NEW YORK
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
CUSTODIAN AGREEMENT
Dated as of: September 1, 1994
Between
Each of the Investment Companies
Listed on Appendix "A" Attached Hereto
and
Brown Brothers Harriman & Company
TABLE OF CONTENTS
ARTICLE
Page
I. APPOINTMENT OF CUSTODIAN 1
II. POWERS AND DUTIES OF CUSTODIAN 1
2.01 Safekeeping 1
2.02 Manner of Holding Securities 1
2.03 Security Purchases 2
2.04 Exchanges of Securities 2
2.05 Sales of Securities 3
2.06 Depositary Receipts 3
2.07 Exercise of Rights; Tender Offers 3
2.08 Stock Dividends, Rights, Etc. 3
2.09 Options 4
2.10 Futures Contracts 4
2.11 Borrowing 4
2.12 Interest Bearing Deposits 5
2.13 Foreign Exchange Transactions 5
2.14 Securities Loans 5
2.15 Collections 6
2.16 Dividends, Distributions and Redemptions 6
2.17 Proceeds from Shares Sold 6
2.18 Proxies, Notices, Etc. 6
2.19 Bills and Other Disbursements 7
2.20 Nondiscretionary Functions 7
2.21 Bank Accounts 7
2.22 Deposit of Fund Assets in Securities Systems 7
2.23 Other Transfers 8
2.24 Establishment of Segregated Account 9
2.25 Custodian's Books and Records . 9
2.26 Opinion of Fund's Independent Certified Public
Accountants 9
2.27 Reports of Independent Certified Public Accountants 10
2.28 Overdraft Facility 10
III. PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS 10
3.01 Proper Instructions and Special Instructions 10
3.02 Authorized Persons 11
3.03 Persons Having Access to Assets of the Portfolios 11
3.04 Actions of the Custodian Based on Proper Instructions and
Special Instructions 11
i
IV. SUBCUSTODIANS 11
4.01 Domestic Subcustodians 12
4.02 Foreign Subcustodians and Interim Subcustodians 12
4.03 Special Subcustodians 13
4.04 Termination of a Subcustodian 13
4.05 Certification Regarding Foreign Subcustodians 13
V. STANDARD OF CARE; INDEMNIFICATION 14
5.01 Standard of Care 14
5.02 Liability of Custodian for Actions of Other Persons 15
5.03 Indemnification 15
5.04 Investment Limitations 16
5.05 Fund's Right to Proceed 16
VI. COMPENSATION 17
VII. TERMINATION 17
7.01 Termination of Agreement as to One or More Funds 17
7.02 Termination as to One or More Portfolios 18
VIII. DEFINED TERMS 18
IX. MISCELLANEOUS 19
9.01 Execution of Documents, Etc 19
9.02 Representative Capacity; Nonrecourse Obligations 19
9.03 Several Obligations of the Funds and the Portfolios 19
9.04 Representations and Warranties 19
9.05 Entire Agreement 20
9.06 Waivers and Amendments 20
9.07 Interpretation 20
9.08 Captions 20
9.09 Governing Law 20
9.10 Notices 21
IX. MISCELLANEOUS 21
9.11 Assignment 21
9.12 Counterparts 21
9.13 Confidentiality; Survival of Obligations 21
ii
APPENDICES
Appendix "A" - List of Funds and Portfolios
Appendix "B" - List of Additional Custodians,
Special Subcustodians and Foreign Subcustodians
Appendix "C" - Procedures Relating to
Custodian's Security Interest
iii
CUSTODIAN AGREEMENT
AGREEMENT made as of the 1st day of September, 1994 between each of the
Investment Companies Listed on Appendix "A" hereto, as the same may be
amended from time to time (each a "Fund" and collectively the "Funds") and
Brown Brothers Harriman & Company (the "Custodian").
W I T N E S S E T H
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio
of cash, securities and other assets (all such existing and additional
series now or hereafter listed on Appendix "A" being hereinafter referred
to individually, as a "Portfolio," and collectively, as the "Portfolios");
and
WHEREAS, each Fund desires to appoint the Custodian as custodian on behalf
of each of its Portfolios in accordance with the provisions of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations thereunder, under the terms and conditions set forth in
this Agreement, and the Custodian has agreed so to act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
APPOINTMENT OF CUSTODIAN
On behalf of each of its Portfolios, each Fund hereby employs and appoints
the Custodian as a custodian, subject to the terms and provisions of this
Agreement. Each Fund shall deliver to the Custodian, or shall cause to be
delivered to the Custodian, cash, securities and other assets owned by each
of its Portfolios from time to time during the term of this Agreement and
shall specify to which of its Portfolios such cash, securities and other
assets are to be specifically allocated.
ARTICLE II
POWERS AND DUTIES OF CUSTODIAN
As custodian, the Custodian shall have and perform the powers and duties
set forth in this Article II. Pursuant to and in accordance with Article
IV hereof, the Custodian may appoint one or more Subcustodians (as
hereinafter defined) to exercise the powers and perform the duties of the
Custodian set forth in this Article II and references to the Custodian in
this Article II shall include any Subcustodian so appointed.
Section 2.01. Safekeeping. The Custodian shall keep safely all cash,
securities and other assets of each Fund's Portfolios delivered to the
Custodian and, on behalf of such Portfolios, the Custodian shall, from time
to time, accept delivery of cash, securities and other assets for
safekeeping.
Section 2.02. Manner of Holding Securities.
(a) The Custodian shall at all times hold securities of each Fund's
Portfolios either: (i) by physical possession of the share certificates or
other instruments representing such securities in registered or bearer
form; or (ii) in book-entry form by a Securities System (as hereinafter
defined) in accordance with the provisions of Section 2.22 below.
(b) The Custodian shall at all times hold registered securities of each
Portfolio in the name of the Custodian, the Portfolio or a nominee of
either of them, unless specifically directed by Proper Instructions to hold
such registered securities in so-called street name; provided that, in any
event, all such securities and other assets shall be held in an account of
the Custodian containing only assets of a Portfolio, or only assets held by
the Custodian as a fiduciary or custodian for customers; and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein.
Section 2.03. Security Purchases. Upon receipt of Proper Instructions
(as hereinafter defined), the Custodian shall pay for and receive
securities purchased for the account of a Portfolio, provided that payment
shall be made by the Custodian only upon receipt of the securities: (a) by
the Custodian; (b) by a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) by a Securities System.
Notwithstanding the foregoing, upon receipt of Proper Instructions: (i) in
the case of a repurchase agreement, the Custodian may release funds to a
Securities System prior to the receipt of advice from the Securities System
that the securities underlying such repurchase agreement have been
transferred by book-entry into the Account (as hereinafter defined)
maintained with such Securities System by the Custodian, provided that the
Custodian's instructions to the Securities System require that the
Securities System may make payment of such funds to the other party to the
repurchase agreement only upon transfer by book-entry of the securities
underlying the repurchase agreement into the Account; (ii) in the case of
time deposits, call account deposits, currency deposits, and other
deposits, foreign exchange transactions, futures contracts or options,
pursuant to Sections 2.09, 2.10, 2.12 and 2.13 hereof, the Custodian may
make payment therefor before receipt of an advice or confirmation
evidencing said deposit or entry into such transaction; (iii) in the case
of the purchase of securities, the settlement of which occurs outside of
the United States of America, the Custodian may make payment therefor and
receive delivery of such securities in accordance with local custom and
practice generally accepted by Institutional Clients (as hereinafter
defined) in the country in which the settlement occurs, but in all events
subject to the standard of care set forth in Article V hereof; and (iv) in
the case of the purchase of securities in which, in accordance with
standard industry custom and practice generally accepted by Institutional
Clients with respect to such securities, the receipt of such securities and
the payment therefor take place in different countries, the Custodian may
receive delivery of such securities and make payment therefor in accordance
with standard industry custom and practice for such securities generally
accepted by Institutional Clients, but in all events subject to the
standard of care set forth in Article V hereof. For purposes of this
Agreement, an "Institutional Client" shall mean a major commercial bank,
corporation, insurance company, or substantially similar institution,
which, as a substantial part of its business operations, purchases or sells
securities and makes use of custodial services.
Section 2.04. Exchanges of Securities. Upon receipt of Proper
Instructions, the Custodian shall exchange securities held by it for the
account of a Portfolio for other securities in connection with any
reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities, and shall deposit any such securities in accordance with the
terms of any reorganization or protective plan. The Custodian shall,
without receiving Proper Instructions: surrender securities in temporary
form for definitive securities; surrender securities for transfer into the
name of the Custodian, a Portfolio or a nominee of either of them, as
permitted by Section 2.02(b); and surrender securities for a different
number of certificates or instruments representing the same number of
shares or same principal amount of indebtedness, provided that the
securities to be issued will be delivered to the Custodian or a nominee of
the Custodian.
Section 2.05. Sales of Securities. Upon receipt of Proper Instructions,
the Custodian shall make delivery of securities which have been sold for
the account of a Portfolio, but only against payment therefor in the form
of: (a) cash, certified check, bank cashier's check, bank credit, or bank
wire transfer; (b) credit to the account of the Custodian with a clearing
corporation of a national securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities
System, in accordance with the provisions of Section 2.22 hereof.
Notwithstanding the foregoing: (i) in the case of the sale of securities,
the settlement of which occurs outside of the United States of America,
such securities shall be delivered and paid for in accordance with local
custom and practice generally accepted by Institutional Clients in the
country in which the settlement occurs, but in all events subject to the
standard of care set forth in Article V hereof; (ii) in the case of the
sale of securities in which, in accordance with standard industry custom
and practice generally accepted by Institutional Clients with respect to
such securities, the delivery of such securities and receipt of payment
therefor take place in different countries, the Custodian may deliver such
securities and receive payment therefor in accordance with standard
industry custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of care
set forth in Article V hereof; and (iii) in the case of securities held in
physical form, such securities shall be delivered and paid for in
accordance with "street delivery custom" to a broker or its clearing agent,
against delivery to the Custodian of a receipt for such securities,
provided that the Custodian shall have taken reasonable steps to ensure
prompt collection of the payment for, or the return of, such securities by
the broker or its clearing agent, and provided further that the Custodian
shall not be responsible for the selection of or the failure or inability
to perform of such broker or its clearing agent.
Section 2.06. Depositary Receipts. Upon receipt of Proper Instructions,
the Custodian shall surrender securities to the depositary used for such
securities by an issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter referred to, collectively, as "ADRs"),
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depositary has
acknowledged receipt of instructions to issue ADRs with respect to such
securities in the name of the Custodian or a nominee of the Custodian, for
delivery to the Custodian at such place as the Custodian may from time to
time designate. Upon receipt of Proper Instructions, the Custodian shall
surrender ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence
satisfactory to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian.
Section 2.07. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof, or to the
agent of such issuer or trustee, for the purpose of exercise or sale,
provided that the new securities, cash or other assets, if any, acquired as
a result of such actions are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that the
consideration for such securities is to be paid or delivered to the
Custodian, or the tendered securities are to be returned to the Custodian.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary in Proper Instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall promptly notify each applicable Fund of such
action in writing by facsimile transmission or in such other manner as such
Fund and the Custodian may agree in writing.
Section 2.08. Stock Dividends, Rights, Etc. The Custodian shall receive
and collect all stock dividends, rights and other items of like nature and,
upon receipt of Proper Instructions, take action with respect to the same
as directed in such Proper Instructions.
Section 2.09. Options. Upon receipt of Proper Instructions and in
accordance with the provisions of any agreement between the Custodian, any
registered broker-dealer and, if necessary, a Fund on behalf of any
applicable Portfolio relating to compliance with the rules of the Options
Clearing Corporation or of any registered national securities exchange or
similar organization(s), the Custodian shall: (a) receive and retain
confirmations or other documents, if any, evidencing the purchase or
writing of an option on a security or securities index by the applicable
Portfolio; (b) deposit and maintain in a segregated account, securities
(either physically or by book-entry in a Securities System), cash or other
assets; and (c) pay, release and/or transfer such securities, cash or other
assets in accordance with notices or other communications evidencing the
expiration, termination or exercise of such options furnished by the
Options Clearing Corporation, the securities or options exchange on which
such options are traded, or such other organization as may be responsible
for handling such option transactions. Each Fund, on behalf of its
applicable Portfolios, and the broker-dealer shall be responsible for the
sufficiency of assets held in any segregated account established in
compliance with applicable margin maintenance requirements and the
performance of other terms of any option contract.
Section 2.10. Futures Contracts. Upon receipt of Proper Instructions, or
pursuant to the provisions of any futures margin procedural agreement among
a Fund, on behalf of any applicable Portfolio, the Custodian and any
futures commission merchant (a "Procedural Agreement"), the Custodian
shall: (a) receive and retain confirmations, if any, evidencing the
purchase or sale of a futures contract or an option on a futures contract
by the applicable Portfolio; (b) deposit and maintain in a segregated
account, cash, securities and other assets designated as initial,
maintenance or variation "margin" deposits intended to secure the
applicable Portfolio's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by
the Portfolio, in accordance with the provisions of any Procedural
Agreement designed to comply with the rules of the Commodity Futures
Trading Commission and/or any commodity exchange or contract market (such
as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release assets from and/or transfer assets
into such margin accounts only in accordance with any such Procedural
Agreements. Each Fund, on behalf of its applicable Portfolios, and such
futures commission merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance with applicable margin
maintenance requirements and the performance of any futures contract or
option on a futures contract in accordance with its terms.
Section 2.11. Borrowing. Upon receipt of Proper Instructions, the
Custodian shall deliver securities of a Portfolio to lenders or their
agents, or otherwise establish a segregated account as agreed to by the
applicable Fund on behalf of such Portfolio and the Custodian, as
collateral for borrowings effected by such Portfolio, provided that such
borrowed money is payable by the lender (a) to or upon the Custodian's
order, as Custodian for such Portfolio, and (b) concurrently with delivery
of such securities.
Section 2.12. Interest Bearing Deposits.
Upon receipt of Proper Instructions directing the Custodian to purchase
interest bearing fixed term and call deposits (hereinafter referred to
collectively, as "Interest Bearing Deposits") for the account of a
Portfolio, the Custodian shall purchase such Interest Bearing Deposits in
the name of the Portfolio with such banks or trust companies (including the
Custodian, any Subcustodian or any subsidiary or affiliate of the
Custodian) (hereinafter referred to as "Banking Institutions") and in such
amounts as the applicable Fund may direct pursuant to Proper Instructions.
Such Interest Bearing Deposits may be denominated in U.S. Dollars or other
currencies, as the applicable Fund on behalf of its Portfolio may determine
and direct pursuant to Proper Instructions. The Custodian shall include in
its records with respect to the assets of each Portfolio appropriate
notation as to the amount and currency of each such Interest Bearing Bank
Deposit, the accepting Banking Institution and all other appropriate
details, and shall retain such forms of advice or receipt evidencing such
account, if any, as may be forwarded to the Custodian by the Banking
Institution. The responsibilities of the Custodian to each Fund for
Interest Bearing Deposits accepted on the Custodian's books in the United
States on behalf of the Fund's Portfolios shall be that of a U.S. bank for
a similar deposit. With respect to Interest Bearing Deposits other than
those accepted on the Custodian's books, (a) the Custodian shall be
responsible for the collection of income as set forth in Section 2.15 and
the transmission of cash and instructions to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or, so long as the Custodian acts in accordance with
Proper Instructions, for the failure of such Banking Institution to pay
upon demand. Upon receipt of Proper Instructions, the Custodian shall take
such reasonable actions as the applicable Fund deems necessary or
appropriate to cause each such Interest Bearing Deposit Account to be
insured to the maximum extent possible by all applicable deposit insurers
including, without limitation, the Federal Deposit Insurance Corporation.
Section 2.13. Foreign Exchange Transactions
(a) Foreign Exchange Transactions Other Than as Principal. Upon receipt
of Proper Instructions, the Custodian shall settle foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery on behalf of and for the account of a Portfolio with such
currency brokers or Banking Institutions as the applicable Fund may
determine and direct pursuant to Proper Instructions. The Custodian shall
be responsible for the transmission of cash and instructions to and from
the currency broker or Banking Institution with which the contract or
option is made, the safekeeping of all certificates and other documents and
agreements evidencing or relating to such foreign exchange transactions and
the maintenance of proper records as set forth in Section 2.25. The
Custodian shall have no duty with respect to the selection of the currency
brokers or Banking Institutions with which a Fund deals on behalf of its
Portfolios or, so long as the Custodian acts in accordance with Proper
Instructions, for the failure of such brokers or Banking Institutions to
comply with the terms of any contract or option.
(b) Foreign Exchange Contracts as Principal. The Custodian shall not be
obligated to enter into foreign exchange transactions as principal.
However, if the Custodian has made available to a Fund its services as a
principal in foreign exchange transactions, upon receipt of Proper
Instructions, the Custodian shall enter into foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future
delivery on behalf of and for the account of a Portfolio of such Fund with
the Custodian as principal. The Custodian shall be responsible for the
selection of the currency brokers or Banking Institutions and the failure
of such currency brokers or Banking Institutions to comply with the terms
of any contract or option.
(c) Payments. Notwithstanding anything to the contrary contained herein,
upon receipt of Proper Instructions the Custodian may, in connection with a
foreign exchange contract, make free outgoing payments of cash in the form
of U.S. Dollars or foreign currency prior to receipt of confirmation of
such foreign exchange contract or confirmation that the countervalue
currency completing such contract has been delivered or received.
Section 2.14. Securities Loans. Upon receipt of Proper Instructions, the
Custodian shall, in connection with loans of securities by a Portfolio,
deliver securities of such Portfolio to the borrower thereof prior to
receipt of the collateral, if any, for such borrowing; provided that, in
cases of loans of securities secured by cash collateral, the Custodian's
instructions to the Securities System shall require that the Securities
System deliver the securities of the Portfolio to the borrower thereof only
upon receipt of the collateral for such borrowing.
Section 2.15. Collections. The Custodian shall, and shall cause any
Subcustodian to: (a) collect amounts due and payable to each Fund with
respect to portfolio securities and other assets of each of such Fund's
Portfolios; (b) promptly credit to the account of each applicable Portfolio
all income and other payments relating to portfolio securities and other
assets held by the Custodian hereunder upon Custodian's receipt of such
income or payments or as otherwise agreed in writing by the Custodian and
the applicable Fund; (c) promptly endorse and deliver any instruments
required to effect such collections; (d) promptly execute ownership and
other certificates and affidavits for all federal, state and foreign tax
purposes in connection with receipt of income, capital gains or other
payments with respect to portfolio securities and other assets of each
applicable Portfolio, or in connection with the purchase, sale or transfer
of such securities or other assets; and (e) promptly file any certificates
or other affidavits for the refund or reclaim of foreign taxes paid, and
promptly notify each applicable Fund of any changes to law, interpretative
rulings or procedures regarding such reclaims, and otherwise use all
available measures customarily used to minimize the imposition of foreign
taxes at source, and promptly inform each applicable Fund of alternative
means of minimizing such taxes of which the Custodian shall become aware
(or with the exercise of reasonable care should have become aware);
provided, however, that with respect to portfolio securities registered in
so-called street name, the Custodian shall use its best efforts to collect
amounts due and payable to each Fund with respect to its Portfolios. The
Custodian shall promptly notify each applicable Fund in writing by
facsimile transmission or in such other manner as each such Fund and the
Custodian may agree in writing if any amount payable with respect to
portfolio securities or other assets of the Portfolios of such Fund(s) is
not received by the Custodian when due. The Custodian shall not be
responsible for the collection of amounts due and payable with respect to
portfolio securities or other assets that are in default.
Section 2.16. Dividends, Distributions and Redemptions. The Custodian
shall promptly release funds or securities: (a) upon receipt of Proper
Instructions, to one or more Distribution Accounts designated by the
applicable Fund or Funds in such Proper Instructions; or (b) upon receipt
of Special Instructions, as otherwise directed by the applicable Fund or
Funds, for the purpose of the payment of dividends or other distributions
to shareholders of each applicable Portfolio, and payment to shareholders
who have requested repurchase or redemption of their shares of the
Portfolio(s) (collectively, the "Shares"). For purposes of this Agreement,
a "Distribution Account" shall mean an account established at a Banking
Institution designated by the applicable Fund on behalf of one or more of
its Portfolios in Special Instructions.
Section 2.17. Proceeds from Shares Sold. The Custodian shall receive
funds representing cash payments received for Shares issued or sold from
time to time by the Funds, and shall promptly credit such funds to the
account(s) of the applicable Portfolio(s). The Custodian shall promptly
notify each applicable Fund of Custodian's receipt of cash in payment for
Shares issued by such Fund by facsimile transmission or in such other
manner as the Fund and Custodian may agree in writing. Upon receipt of
Proper Instructions, the Custodian shall: (a) deliver all federal funds
received by the Custodian in payment for Shares in payment for such
investments as may be set forth in such Proper Instructions and at a time
agreed upon between the Custodian and the applicable Fund; and (b) make
federal funds available to the applicable Fund as of specified times agreed
upon from time to time by the applicable Fund and the Custodian, in the
amount of checks received in payment for Shares which are deposited to the
accounts of each applicable Portfolio.
Section 2.18. Proxies, Notices, Etc. The Custodian shall deliver to each
applicable Fund, in the most expeditious manner practicable, all forms of
proxies, all notices of meetings, and any other notices or announcements
affecting or relating to securities owned by one or more of the applicable
Fund's Portfolios that are received by the Custodian, any Subcustodian, or
any nominee of either of them, and, upon receipt of Proper Instructions,
the Custodian shall execute and deliver, or cause such Subcustodian or
nominee to execute and deliver, such proxies or other authorizations as may
be required. Except as directed pursuant to Proper Instructions, neither
the Custodian nor any Subcustodian or nominee shall vote upon any such
securities, or execute any proxy to vote thereon, or give any consent or
take any other action with respect thereto.
Section 2.19. Bills and Other Disbursements. Upon receipt of Proper
Instructions, the Custodian shall pay or cause to be paid, all bills,
statements, or other obligations of each Portfolio.
Section 2.20. Nondiscretionary Functions. The Custodian shall attend to
all nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealings with securities or other
assets of each Portfolio held by the Custodian, except as otherwise
directed from time to time pursuant to Proper Instructions.
Section 2.21. Bank Accounts
(a) Accounts with the Custodian and any Subcustodians. The Custodian shall
open and operate a bank account or accounts (hereinafter referred to
collectively, as "Bank Accounts") on the books of the Custodian or any
Subcustodian provided that such account(s) shall be in the name of the
Custodian or a nominee of the Custodian, for the account of a Portfolio,
and shall be subject only to the draft or order of the Custodian; provided
however, that such Bank Accounts in countries other than the United States
may be held in an account of the Custodian containing only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian shall indicate at all times the
Portfolio or other customer for which such securities and other assets are
held in such account and the respective interests therein. Such Bank
Accounts may be denominated in either U.S. Dollars or other currencies.
The responsibilities of the Custodian to each applicable Fund for deposits
accepted on the Custodian's books in the United States shall be that of a
U.S. bank for a similar deposit. The responsibilities of the Custodian to
each applicable Fund for deposits accepted on any Subcustodian's books
shall be governed by the provisions of Section 5.02.
(b) Accounts With Other Banking Institutions. The Custodian may open and
operate Bank Accounts on behalf of a Portfolio, in the name of the
Custodian or a nominee of the Custodian, at a Banking Institution other
than the Custodian or any Subcustodian, provided that such account(s) shall
be in the name of the Custodian or a nominee of the Custodian, for the
account of a Portfolio, and shall be subject only to the draft or order of
the Custodian; provided however, that such Bank Accounts may be held in an
account of the Custodian containing only assets held by the Custodian as a
fiduciary or custodian for customers, and provided further, that the
records of the Custodian shall indicate at all times the Portfolio or other
customer for which such securities and other assets are held in such
account and the respective interests therein. Such Bank Accounts may be
denominated in either U.S. Dollars or other currencies. Subject to the
provisions of Section 5.01(a), the Custodian shall be responsible for the
selection of the Banking Institution and for the failure of such Banking
Institution to pay according to the terms of the deposit.
(c) Deposit Insurance. Upon receipt of Proper Instructions, the Custodian
shall take such reasonable actions as the applicable Fund deems necessary
or appropriate to cause each deposit account established by the Custodian
pursuant to this Section 2.21 to be insured to the maximum extent possible
by all applicable deposit insurers including, without limitation, the
Federal Deposit Insurance Corporation.
Section 2.22. Deposit of Fund Assets in Securities Systems. The
Custodian may deposit and/or maintain domestic securities owned by a
Portfolio in: (a) The Depository Trust Company; (b) the Participants Trust
Company; (c) any book-entry system as provided in (i) Subpart O of Treasury
Circular No. 300, 31 CFR 306.115, (ii) Subpart B of Treasury Circular
Public Debt Series No. 27-76, 31 CFR 350.2, or (iii) the book-entry
regulations of federal agencies substantially in the form of 31 CFR
306.115; or (d) any other domestic clearing agency registered with the
Securities and Exchange Commission ("SEC") under Section 17A of the
Securities Exchange Act of 1934 (or as may otherwise be authorized by the
Securities and Exchange Commission to serve in the capacity of depository
or clearing agent for the securities or other assets of investment
companies) which acts as a securities depository and the use of which each
applicable Fund has previously approved by Special Instructions (as
hereinafter defined) (each of the foregoing being referred to in this
Agreement as a "Securities System"). Use of a Securities System shall be
in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(A) The Custodian may deposit and/or maintain securities held hereunder
in a Securities System, provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System which Account
shall not contain any assets of the Custodian other than assets held as a
fiduciary, custodian, or otherwise for customers and shall be so designated
on the books and records of the Securities System.
(B) The Securities System shall be obligated to comply with the
Custodian's directions with respect to the securities held in such Account
and shall not be entitled to a lien against the assets in such Account for
extensions of credit to the Custodian other than for payment of the
purchase price of such assets.
(C) Each Fund hereby designates the Custodian as the party in whose name
any securities deposited by the Custodian in the Account are to be
registered.
(D) The books and records of the Custodian shall at all times identify
those securities belonging to each Portfolio which are maintained in a
Securities System.
(E) The Custodian shall pay for securities purchased for the account of a
Portfolio only upon (w) receipt of advice from the Securities System that
such securities have been transferred to the Account of the Custodian, and
(x) the making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of such Portfolio. The Custodian
shall transfer securities sold for the account of a Portfolio only upon (y)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account of the Custodian, and (z)
the making of an entry on the records of the Custodian to reflect such
transfer and payment for the account of such Portfolio. Copies of all
advices from the Securities System relating to transfers of securities for
the account of a Portfolio shall identify such Portfolio and shall be
maintained for such Portfolio by the Custodian. The Custodian shall
deliver to each applicable Fund on the next succeeding business day daily
transaction reports which shall include each day's transactions in the
Securities System for the account of each applicable Portfolio. Such
transaction reports shall be delivered to each applicable Fund or any agent
designated by such Fund pursuant to Proper Instructions, by computer or in
such other manner as such Fund and the Custodian may agree in writing.
(F) The Custodian shall, if requested by a Fund pursuant to Proper
Instructions, provide such Fund with all reports obtained by the Custodian
or any Subcustodian with respect to a Securities System's accounting
system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
(G) Upon receipt of Special Instructions, the Custodian shall terminate
the use of any Securities System (except the federal book-entry system) on
behalf of any Portfolio as promptly as practicable and shall take all
actions reasonably practicable to safeguard the securities of any Portfolio
maintained with such Securities System.
Section 2.23. Other Transfers.
(a) Upon receipt of Proper Instructions, the Custodian shall transfer to
or receive from a third party that has been appointed to serve as an
additional custodian of one or more Portfolios (an "Additional Custodian")
securities, cash and other assets of such Portfolio(s) in accordance with
such Proper Instructions. Each Additional Custodian shall be identified as
such on Appendix B, as the same may be amended from time to time in
accordance with the provisions of Section 9.06(c).
(b) Upon receipt of Special Instructions, the Custodian shall make such
other dispositions of securities, funds or other property of a Portfolio in
a manner or for purposes other than as expressly set forth in this
Agreement, provided that the Special Instructions relating to such
disposition shall include a statement of the purpose for which the delivery
is to be made, the amount of funds and/or securities to be delivered, and
the name of the person or persons to whom delivery is to be made, and shall
otherwise comply with the provisions of Sections 3.01 and 3.03 hereof.
Section 2.24. Establishment of Segregated Account. Upon receipt of
Proper Instructions, the Custodian shall establish and maintain on its
books a segregated account or accounts for and on behalf of a Portfolio,
into which account or accounts may be transferred cash and/or securities or
other assets of such Portfolio, including securities maintained by the
Custodian in a Securities System pursuant to Section 2.22 hereof, said
account or accounts to be maintained: (a) for the purposes set forth in
Sections 2.09, 2.10 and 2.11 hereof; (b) for the purposes of compliance by
the Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the SEC
relating to the maintenance of segregated accounts by registered investment
companies; or (c) for such other purposes as set forth, from time to time,
in Special Instructions.
Section 2.25. Custodian's Books and Records. The Custodian shall provide
any assistance reasonably requested by a Fund in the preparation of reports
to such Fund's shareholders and others, audits of accounts, and other
ministerial matters of like nature. The Custodian shall maintain complete
and accurate records with respect to securities and other assets held for
the accounts of each Portfolio as required by the rules and regulations of
the SEC applicable to investment companies registered under the 1940 Act,
including: (a) journals or other records of original entry containing a
detailed and itemized daily record of all receipts and deliveries of
securities (including certificate and transaction identification numbers,
if any), and all receipts and disbursements of cash; (b) ledgers or other
records reflecting (i) securities in transfer, (ii) securities in physical
possession, (iii) securities borrowed, loaned or collateralizing
obligations of each Portfolio, (iv) monies borrowed and monies loaned
(together with a record of the collateral therefor and substitutions of
such collateral), (v) dividends and interest received, (vi) the amount of
tax withheld by any person in respect of any collection made by the
Custodian or any Subcustodian, and (vii) the amount of reclaims or refunds
for foreign taxes paid; and (c) cancelled checks and bank records related
thereto. The Custodian shall keep such other books and records of each
Fund as such Fund shall reasonably request. All such books and records
maintained by the Custodian shall be maintained in a form acceptable to the
applicable Fund and in compliance with the rules and regulations of the
SEC, including, but not limited to, books and records required to be
maintained by Section 31(a) of the 1940 Act and the rules and regulations
from time to time adopted thereunder. All books and records maintained by
the Custodian pursuant to this Agreement shall at all times be the property
of each applicable Fund and shall be available during normal business hours
for inspection and use by such Fund and its agents, including, without
limitation, its independent certified public accountants. Notwithstanding
the preceding sentence, no Fund shall take any actions or cause the
Custodian to take any actions which would cause, either directly or
indirectly, the Custodian to violate any applicable laws, regulations or
orders.
Section 2.26. Opinion of Fund's Independent Certified Public Accountants.
The Custodian shall take all reasonable action as a Fund may request to
obtain from year to year favorable opinions from such Fund's independent
certified public accountants with respect to the Custodian's activities
hereunder in connection with the preparation of the Fund's Form N-1A and
the Fund's Form N-SAR or other periodic reports to the SEC and with respect
to any other requirements of the SEC.
Section 2.27. Reports by Independent Certified Public Accountants. At
the request of a Fund, the Custodian shall deliver to such Fund a written
report prepared by the Custodian's independent certified public accountants
with respect to the services provided by the Custodian under this
Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding cash,
securities and other assets, including cash, securities and other assets
deposited and/or maintained in a Securities System or with a Subcustodian.
Such report shall be of sufficient scope and in sufficient detail as may
reasonably be required by any Fund and as may reasonably be obtained by the
Custodian.
Section 2.28. Overdraft Facility. In the event that the Custodian is
directed by Proper Instructions to make any payment or transfer of funds on
behalf of a Portfolio for which there would be, at the close of business on
the date of such payment or transfer, insufficient funds held by the
Custodian on behalf of such Portfolio, the Custodian may, in its
discretion, provide an overdraft (an "Overdraft") to the applicable Fund on
behalf of such Portfolio, in an amount sufficient to allow the completion
of such payment. Any Overdraft provided hereunder: (a) shall be payable
on the next Business Day, unless otherwise agreed by the applicable Fund
and the Custodian; and (b) shall accrue interest from the date of the
Overdraft to the date of payment in full by the applicable Fund on behalf
of the applicable Portfolio at a rate agreed upon in writing, from time to
time, by the Custodian and the applicable Fund. The Custodian and each
Fund acknowledge that the purpose of such Overdrafts is to temporarily
finance the purchase or sale of securities for prompt delivery in
accordance with the terms hereof, or to meet emergency expenses not
reasonably foreseeable by such Fund. The Custodian shall promptly notify
each applicable Fund in writing (an "Overdraft Notice") of any Overdraft by
facsimile transmission or in such other manner as such Fund and the
Custodian may agree in writing. At the request of the Custodian, each
applicable Fund, on behalf of one or more of its Portfolios, shall pledge,
assign and grant to the Custodian a security interest in certain specified
securities of the applicable Portfolio, as security for Overdrafts provided
to such Portfolio, under the terms and conditions set forth in Appendix "C"
attached hereto.
ARTICLE III
PROPER INSTRUCTIONS, SPECIAL INSTRUCTIONS
AND RELATED MATTERS
Section 3.01. Proper Instructions and Special Instructions.
(a) Proper Instructions. As used herein, the term "Proper Instructions"
shall mean: (i) a tested telex, a written (including, without limitation,
facsimile transmission) request, direction, instruction or certification
signed or initialed by or on behalf of the applicable Fund by one or more
Authorized Persons (as hereinafter defined); (ii) a telephonic or other
oral communication by one or more Authorized Persons; or (iii) a
communication effected directly between an electro-mechanical or electronic
device or system (including, without limitation, computers) by or on behalf
of the applicable Fund by one or more Authorized Persons; provided,
however, that communications of the types described in clauses (ii) and
(iii) above purporting to be given by an Authorized Person shall be
considered Proper Instructions only if the Custodian reasonably believes
such communications to have been given by an Authorized Person with respect
to the transaction involved. Proper Instructions in the form of oral
communications shall be confirmed by the applicable Fund by tested telex or
in writing in the manner set forth in clause (i) above, but the lack of
such confirmation shall in no way affect any action taken by the Custodian
in reliance upon such oral instructions prior to the Custodian's receipt of
such confirmation. Each Fund and the Custodian are hereby authorized to
record any and all telephonic or other oral instructions communicated to
the Custodian. Proper Instructions may relate to specific transactions or
to types or classes of transactions, and may be in the form of standing
instructions.
(b) Special Instructions. As used herein, the term "Special Instructions"
shall mean Proper Instructions countersigned or confirmed in writing by the
Treasurer or any Assistant Treasurer of the applicable Fund or any other
person designated by the Treasurer of such Fund in writing, which
countersignature or confirmation shall be (i) included on the same
instrument containing the Proper Instructions or on a separate instrument
relating thereto, and (ii) delivered by hand, by facsimile transmission, or
in such other manner as the applicable Fund and the Custodian agree in
writing.
(c) Address for Proper Instructions and Special Instructions. Proper
Instructions and Special Instructions shall be delivered to the Custodian
at the address and/or telephone, telecopy or telex number agreed upon from
time to time by the Custodian and the applicable Fund.
Section 3.02. Authorized Persons. Concurrently with the execution of
this Agreement and from time to time thereafter, as appropriate, each Fund
shall deliver to the Custodian, duly certified as appropriate by a
Treasurer or Assistant Treasurer of such Fund, a certificate setting forth:
(a) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of such Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"); and (b) the names, titles and signatures of those persons
authorized to issue Special Instructions. Such certificate may be accepted
and relied upon by the Custodian as conclusive evidence of the facts set
forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar certificate to the contrary. Upon
delivery of a certificate which deletes the name(s) of a person previously
authorized by a Fund to give Proper Instructions or to issue Special
Instructions, such persons shall no longer be considered an Authorized
Person or authorized to issue Special Instructions for that Fund.
Section 3.03. Persons Having Access to Assets of the Portfolios.
Notwithstanding anything to the contrary contained in this Agreement, no
Authorized Person, Trustee, officer, employee or agent of any Fund shall
have physical access to the assets of any Portfolio of that Fund held by
the Custodian nor shall the Custodian deliver any assets of a Portfolio for
delivery to an account of such person; provided, however, that nothing in
this Section 3.03 shall prohibit (a) any Authorized Person from giving
Proper Instructions, or any person authorized to issue Special Instructions
from issuing Special Instructions, so long as such action does not result
in delivery of or access to assets of any Portfolio prohibited by this
Section 3.03; or (b) each Fund's independent certified public accountants
from examining or reviewing the assets of the Portfolios of the Fund held
by the Custodian. Each Fund shall deliver to the Custodian a written
certificate identifying such Authorized Persons, Trustees, officers,
employees and agents of such Fund.
Section 3.04. Actions of Custodian Based on Proper Instructions and
Special Instructions. So long as and to the extent that the Custodian acts
in accordance with (a) Proper Instructions or Special Instructions, as the
case may be, and (b) the terms of this Agreement, the Custodian shall not
be responsible for the title, validity or genuineness of any property, or
evidence of title thereof, received by it or delivered by it pursuant to
this Agreement.
ARTICLE IV
SUBCUSTODIANS
The Custodian may, from time to time, in accordance with the relevant
provisions of this Article IV, appoint one or more Domestic Subcustodians,
Foreign Subcustodians, Interim Subcustodians and Special Subcustodians to
act on behalf of a Portfolio. (For purposes of this Agreement, all duly
appointed Domestic Subcustodians, Foreign Subcustodians, Interim
Subcustodians, and Special Subcustodians are hereinafter referred to
collectively, as "Subcustodians.")
Section 4.01. Domestic Subcustodians. The Custodian may, at any time and
from time to time, appoint any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of one
or more Portfolios as a subcustodian for purposes of holding cash,
securities and other assets of such Portfolios and performing other
functions of the Custodian within the United States (a "Domestic
Subcustodian"); provided, that, the Custodian shall notify each applicable
Fund in writing of the identity and qualifications of any proposed Domestic
Subcustodian at least thirty (30) days prior to appointment of such
Domestic Subcustodian, and such Fund may, in its sole discretion, by
written notice to the Custodian executed by an Authorized Person disapprove
of the appointment of such Domestic Subcustodian. If, following notice by
the Custodian to each applicable Fund regarding appointment of a Domestic
Subcustodian and the expiration of thirty (30) days after the date of such
notice, such Fund shall have failed to notify the Custodian of its
disapproval thereof, the Custodian may, in its discretion, appoint such
proposed Domestic Subcustodian as its subcustodian.
Section 4.02. Foreign Subcustodians and Interim Subcustodians.
(a) Foreign Subcustodians. The Custodian may, at any time and from time
to time, appoint: (i) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Section 17(f) of the
1940 Act and the rules and regulations thereunder or by order of the
Securities and Exchange Commission exempted therefrom, or (ii) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of one or more Portfolios as a subcustodian for
purposes of holding cash, securities and other assets of such Portfolios
and performing other functions of the Custodian in countries other than the
United States of America (a "Foreign Subcustodian"); provided, that, prior
to the appointment of any Foreign Subcustodian, the Custodian shall have
obtained written confirmation of the approval of the Board of Trustees or
other governing body or entity of each applicable Fund on behalf of its
applicable Portfolio(s) (which approval may be withheld in the sole
discretion of such Board of Trustees or other governing body or entity)
with respect to (i) the identity and qualifications of any proposed Foreign
Subcustodian, (ii) the country or countries in which, and the securities
depositories or clearing agencies, if any, through which, any proposed
Foreign Subcustodian is authorized to hold securities and other assets of
the applicable Portfolio(s), and (iii) the form and terms of the
subcustodian agreement to be entered into between such proposed Foreign
Subcustodian and the Custodian. Each such duly approved Foreign
Subcustodian and the countries where and the securities depositories and
clearing agencies through which they may hold securities and other assets
of the applicable Portfolios shall be listed on Appendix "B" attached
hereto, as it may be amended, from time to time, in accordance with the
provisions of Section 9.05(c) hereof. Each Fund shall be responsible for
informing the Custodian sufficiently in advance of a proposed investment by
one of its Portfolios which is to be held in a country in which no Foreign
Subcustodian is authorized to act, in order that there shall be sufficient
time for the Custodian to effect the appropriate arrangements with a
proposed foreign subcustodian, including obtaining approval as provided in
this Section 4.02(a). The Custodian shall not amend any subcustodian
agreement entered into with a Foreign Subcustodian, or agree to change or
permit any changes thereunder, or waive any rights under such agreement,
which materially affect a Fund's rights or the Foreign Subcustodian's
obligations or duties to a Fund under such agreement, except upon prior
approval pursuant to Special Instructions.
(b) Interim Subcustodians. Notwithstanding the foregoing, in the event
that a Portfolio shall invest in a security or other asset to be held in a
country in which no Foreign Subcustodian is authorized to act, the
Custodian shall promptly notify the applicable Fund in writing by facsimile
transmission or in such other manner as such Fund and Custodian shall agree
in writing of the unavailability of an approved Foreign Subcustodian in
such country; and the Custodian shall, upon receipt of Special
Instructions, appoint any Person designated by the applicable Fund in such
Special Instructions to hold such security or other asset. (Any Person
appointed as a subcustodian pursuant to this Section 4.02(b) is hereinafter
referred to as an "Interim Subcustodian.")
Section 4.03. Special Subcustodians. Upon receipt of Special
Instructions, the Custodian shall, on behalf of one or more Portfolios,
appoint one or more banks, trust companies or other entities designated in
such Special Instructions to act as a subcustodian for purposes of: (i)
effecting third-party repurchase transactions with banks, brokers, dealers
or other entities through the use of a common custodian or subcustodian;
(ii) establishing a joint trading account for the applicable Portfolio(s)
and other registered open-end management investment companies for which
Fidelity Management & Research Company serves as investment adviser,
through which such Portfolios and such other investment companies shall
collectively participate in certain repurchase transactions; (iii)
providing depository and clearing agency services with respect to certain
variable rate demand note securities; and (iv) effecting any other
transactions designated by each applicable Fund in Special Instructions.
(Each such designated subcustodian is hereinafter referred to as a "Special
Subcustodian.") Each such duly appointed Special Subcustodian shall be
listed on Appendix "B" attached hereto, as it may be amended from time to
time in accordance with the provisions of Section 9.05(c) hereof. In
connection with the appointment of any Special Subcustodian, the Custodian
shall enter into a subcustodian agreement with the Special Subcustodian in
form and substance approved by each applicable Fund, provided that such
agreement shall in all events comply with the provisions of the 1940 Act
and the rules and regulations thereunder and the terms and provisions of
this Agreement. The Custodian shall not amend any subcustodian agreement
entered into with a Special Subcustodian, or agree to change or permit any
changes thereunder, or waive any rights under such agreement, except upon
prior approval pursuant to Special Instructions.
Section 4.04. Termination of a Subcustodian. The Custodian shall (i)
cause each Domestic Subcustodian and Foreign Subcustodian to, and (ii) use
its best efforts to cause each Interim Subcustodian and Special
Subcustodian to, perform all of its obligations in accordance with the
terms and conditions of the subcustodian agreement between the Custodian
and such Subcustodian. In the event that the Custodian is unable to cause
such Subcustodian to fully perform its obligations thereunder, the
Custodian shall forthwith, upon the receipt of Special Instructions,
terminate such Subcustodian with respect to each applicable Fund and, if
necessary or desirable, appoint a replacement Subcustodian in accordance
with the provisions of Section 4.01 or Section 4.02, as the case may be.
In addition to the foregoing, the Custodian (A) may, at any time in its
discretion, upon written notification to each applicable Fund, terminate
any Domestic Subcustodian, Foreign Subcustodian or Interim Subcustodian,
and (B) shall, upon receipt of Special Instructions, terminate any
Subcustodian with respect to each applicable Fund, in accordance with the
termination provisions under the applicable subcustodian agreement.
Section 4.05. Certification Regarding Foreign Subcustodians. Upon
request of a Fund, the Custodian shall deliver to such Fund a certificate
stating: (i) the identity of each Foreign Subcustodian then acting on
behalf of the Custodian for such Fund and its Portfolios; (ii) the
countries in which and the securities depositories and clearing agents
through which each such Foreign Subcustodian is then holding cash,
securities and other assets of any Portfolio of such Fund; and (iii) such
other information as may be requested by such Fund to ensure compliance
with Rule 17(f)-5 under the 1940 Act.
ARTICLE V
STANDARD OF CARE; INDEMNIFICATION
Section 5.01. Standard of Care.
(a) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations under
this Agreement, and shall be liable to each Fund for all loss, damage and
expense suffered or incurred by such Fund or its Portfolios resulting from
the failure of the Custodian to exercise such reasonable care and
diligence.
(b) Actions Prohibited by Applicable Law, Etc. In no event shall the
Custodian incur liability hereunder if the Custodian or any Subcustodian or
Securities System, or any subcustodian, securities depository or securities
system utilized by any such Subcustodian, or any nominee of the Custodian
or any Subcustodian (individually, a "Person") is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason
of: (i) any provision of any present or future law or regulation or order
of the United States of America, or any state thereof, or of any foreign
country, or political subdivision thereof or of any court of competent
jurisdiction; or (ii) any act of God or war or other similar circumstance
beyond the control of the Custodian, unless, in each case, such delay or
nonperformance is caused by (A) the negligence, misfeasance or misconduct
of the applicable Person, or (B) a malfunction or failure of equipment
operated or utilized by the applicable Person other than a malfunction or
failure beyond such Person's control and which could not reasonably be
anticipated and/or prevented by such Person.
(c) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Fund or Portfolio,
(i) the Custodian shall, (ii) the Custodian shall cause any applicable
Domestic Subcustodian or Foreign Subcustodian to, and (iii) the Custodian
shall use its best efforts to cause any applicable Interim Subcustodian or
Special Subcustodian to, use all commercially reasonable efforts and take
all reasonable steps under the circumstances to mitigate the effects of
such event and to avoid continuing harm to the Funds and the Portfolios.
(d) Advice of Counsel. The Custodian shall be entitled to receive and act
upon advice of counsel on all matters. The Custodian shall be without
liability for any action reasonably taken or omitted in good faith pursuant
to the advice of (i) counsel for the applicable Fund or Funds, or (ii) at
the expense of the Custodian, such other counsel as the applicable Fund(s)
and the Custodian may agree upon; provided, however, with respect to the
performance of any action or omission of any action upon such advice, the
Custodian shall be required to conform to the standard of care set forth in
Section 5.01(a).
(e) Expenses of the Funds. In addition to the liability of the Custodian
under this Article V, the Custodian shall be liable to each applicable Fund
for all reasonable costs and expenses incurred by such Fund in connection
with any claim by such Fund against the Custodian arising from the
obligations of the Custodian hereunder, including, without limitation, all
reasonable attorneys' fees and expenses incurred by such Fund in asserting
any such claim, and all expenses incurred by such Fund in connection with
any investigations, lawsuits or proceedings relating to such claim;
provided, that such Fund has recovered from the Custodian for such claim.
(f) Liability for Past Records. The Custodian shall have no liability in
respect of any loss, damage or expense suffered by a Fund, insofar as such
loss, damage or expense arises from the performance of the Custodian's
duties hereunder by reason of the Custodian's reliance upon records that
were maintained for such Fund by entities other than the Custodian prior to
the Custodian's appointment as custodian for such Fund.
Section 5.02. Liability of Custodian for Actions of Other Persons.
(a) Domestic Subcustodians and Foreign Subcustodians. The Custodian shall
be liable for the actions or omissions of any Domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such action or omission were
performed by the Custodian itself. In the event of any loss, damage or
expense suffered or incurred by a Fund caused by or resulting from the
actions or omissions of any Domestic Subcustodian or Foreign Subcustodian
for which the Custodian would otherwise be liable, the Custodian shall
promptly reimburse such Fund in the amount of any such loss, damage or
expense.
(b) Interim Subcustodians. Notwithstanding the provisions of Section 5.01
to the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the actions or omissions of an Interim
Subcustodian unless such loss, damage or expense is caused by, or results
from, the negligence, misfeasance or misconduct of the Custodian; provided,
however, in the event of any such loss, damage or expense, the Custodian
shall take all reasonable steps to enforce such rights as it may have
against such Interim Subcustodian to protect the interests of the Funds and
the Portfolios.
(c) Special Subcustodians and Additional Custodians. Notwithstanding the
provisions of Section 5.01 to the contrary and except as otherwise provided
in any subcustodian agreement to which the Custodian, a Fund and any
Special Subcustodian or Additional Custodian are parties, the Custodian
shall not be liable to a Fund for any loss, damage or expense suffered or
incurred by such Fund or any of its Portfolios resulting from the actions
or omissions of a Special Subcustodian or Additional Subcustodian, unless
such loss, damage or expense is caused by, or results from, the negligence,
misfeasance or misconduct of the Custodian; provided, however, that in the
event of any such loss, damage or expense, the Custodian shall take all
reasonable steps to enforce such rights as it may have against any Special
Subcustodian or Additional Custodian to protect the interests of the Funds
and the Portfolios.
(d) Securities Systems. Notwithstanding the provisions of Section 5.01 to
the contrary, the Custodian shall not be liable to a Fund for any loss,
damage or expense suffered or incurred by such Fund or any of its
Portfolios resulting from the use by the Custodian of a Securities System,
unless such loss, damage or expense is caused by, or results from, the
negligence, misfeasance or misconduct of the Custodian; provided, however,
that in the event of any such loss, damage or expense, the Custodian shall
take all reasonable steps to enforce such rights as it may have against the
Securities System to protect the interests of the Funds and the Portfolios.
(e) Reimbursement of Expenses. Each Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.02; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
Section 5.03. Indemnification.
(a) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, each Fund severally and not jointly agrees to indemnify and
hold harmless the Custodian and its nominees from all loss, damage and
expense (including reasonable attorneys' fees) suffered or incurred by the
Custodian or its nominee caused by or arising from actions taken by the
Custodian on behalf of such Fund in the performance of its duties and
obligations under this Agreement; provided, however, that such indemnity
shall not apply to loss, damage and expense occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian or its nominee.
In addition, each Fund agrees severally and not jointly to indemnify any
Person against any liability incurred by reason of taxes assessed to such
Person, or other loss, damage or expenses incurred by such Person,
resulting from the fact that securities and other property of such Fund's
Portfolios are registered in the name of such Person; provided, however,
that in no event shall such indemnification be applicable to income,
franchise or similar taxes which may be imposed or assessed against any
Person.
(b) Notice of Litigation, Right to Prosecute, Etc. No Fund shall be
liable for indemnification under this Section 5.03 unless a Person shall
have promptly notified such Fund in writing of the commencement of any
litigation or proceeding brought against such Person in respect of which
indemnity may be sought under this Section 5.03. With respect to claims in
such litigation or proceedings for which indemnity by a Fund may be sought
and subject to applicable law and the ruling of any court of competent
jurisdiction, such Fund shall be entitled to participate in any such
litigation or proceeding and, after written notice from such Fund to any
Person, such Fund may assume the defense of such litigation or proceeding
with counsel of its choice at its own expense in respect of that portion of
the litigation for which such Fund may be subject to an indemnification
obligation; provided, however, a Person shall be entitled to participate in
(but not control) at its own cost and expense, the defense of any such
litigation or proceeding if such Fund has not acknowledged in writing its
obligation to indemnify the Person with respect to such litigation or
proceeding. If such Fund is not permitted to participate or control such
litigation or proceeding under applicable law or by a ruling of a court of
competent jurisdiction, such Person shall reasonably prosecute such
litigation or proceeding. A Person shall not consent to the entry of any
judgment or enter into any settlement in any such litigation or proceeding
without providing each applicable Fund with adequate notice of any such
settlement or judgment, and without each such Fund's prior written consent.
All Persons shall submit written evidence to each applicable Fund with
respect to any cost or expense for which they are seeking indemnification
in such form and detail as such Fund may reasonably request.
Section 5.04. Investment Limitations. If the Custodian has otherwise
complied with the terms and conditions of this Agreement in performing its
duties generally, and more particularly in connection with the purchase,
sale or exchange of securities made by or for a Portfolio, the Custodian
shall not be liable to the applicable Fund and such Fund agrees to
indemnify the Custodian and its nominees, for any loss, damage or expense
suffered or incurred by the Custodian and its nominees arising out of any
violation of any investment or other limitation to which such Fund is
subject.
Section 5.05. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, each Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's
rights against any Subcustodian, Securities System, or other Person for
loss, damage or expense caused such Fund by such Subcustodian, Securities
System, or other Person, and shall be entitled to enforce the rights of the
Custodian with respect to any claim against such Subcustodian, Securities
System or other Person, which the Custodian may have as a consequence of
any such loss, damage or expense, if and to the extent that such Fund has
not been made whole for any such loss or damage. If the Custodian makes
such Fund whole for any such loss or damage, the Custodian shall retain the
ability to enforce its rights directly against such Subcustodian,
Securities System or other Person. Upon such Fund's election to enforce
any rights of the Custodian under this Section 5.05, such Fund shall
reasonably prosecute all actions and proceedings directly relating to the
rights of the Custodian in respect of the loss, damage or expense incurred
by such Fund; provided that, so long as such Fund has acknowledged in
writing its obligation to indemnify the Custodian under Section 5.03 hereof
with respect to such claim, such Fund shall retain the right to settle,
compromise and/or terminate any action or proceeding in respect of the
loss, damage or expense incurred by such Fund without the Custodian's
consent and provided further, that if such Fund has not made an
acknowledgement of its obligation to indemnify, such Fund shall not settle,
compromise or terminate any such action or proceeding without the written
consent of the Custodian, which consent shall not be unreasonably withheld
or delayed. The Custodian agrees to cooperate with each Fund and take all
actions reasonably requested by such Fund in connection with such Fund's
enforcement of any rights of the Custodian. Each Fund agrees to reimburse
the Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment of its
obligations under this Section 5.05; provided, however, that such
reimbursement shall not apply to expenses occasioned by or resulting from
the negligence, misfeasance or misconduct of the Custodian.
ARTICLE VI
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the
Custodian in an amount, and at such times, as may be agreed upon in
writing, from time to time, by the Custodian and such Fund.
ARTICLE VII
TERMINATION
Section 7.01. Termination of Agreement as to One or More Funds. With
respect to each Fund, this Agreement shall continue in full force and
effect until the first to occur of: (a) termination by the Custodian by an
instrument in writing delivered or mailed to such Fund, such termination to
take effect not sooner than ninety (90) days after the date of such
delivery; (b) termination by such Fund by an instrument in writing
delivered or mailed to the Custodian, such termination to take effect not
sooner than thirty (30) days after the date of such delivery; or (c)
termination by such Fund by written notice delivered to the Custodian,
based upon such Fund's determination that there is a reasonable basis to
conclude that the Custodian is insolvent or that the financial condition of
the Custodian is deteriorating in any material respect, in which case
termination shall take effect upon the Custodian's receipt of such notice
or at such later time as such Fund shall designate. In the event of
termination pursuant to this Section 7.01 by any Fund (a "Terminating
Fund"), each Terminating Fund shall make payment of all accrued fees and
unreimbursed expenses with respect to such Terminating Fund within a
reasonable time following termination and delivery of a statement to the
Terminating Fund setting forth such fees and expenses. Each Terminating
Fund shall identify in any notice of termination a successor custodian or
custodians to which the cash, securities and other assets of its Portfolios
shall, upon termination of this Agreement with respect to such Terminating
Fund, be delivered. In the event that no written notice designating a
successor custodian shall have been delivered to the Custodian on or before
the date when termination of this Agreement as to a Terminating Fund shall
become effective, the Custodian may deliver to a bank or trust company
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities and other
assets of such Terminating Fund's Portfolios held by the Custodian and all
instruments held by the Custodian relative thereto and all other property
of the Terminating Fund's Portfolios held by the Custodian under this
Agreement. Thereafter, such bank or trust company shall be the successor
of the Custodian with respect to such Terminating Fund under this
Agreement. In the event that securities and other assets of such
Terminating Fund's Portfolios remain in the possession of the Custodian
after the date of termination hereof with respect to such Terminating Fund
owing to failure of the Terminating Fund to appoint a successor custodian,
the Custodian shall be entitled to compensation for its services in
accordance with the fee schedule most recently in effect, for such period
as the Custodian retains possession of such securities and other assets,
and the provisions of this Agreement relating to the duties and obligations
of the Custodian and the Terminating Fund shall remain in full force and
effect. In the event of the appointment of a successor custodian, it is
agreed that the cash, securities and other property owned by a Terminating
Fund and held by the Custodian, any Subcustodian or nominee shall be
delivered to the successor custodian; and the Custodian agrees to cooperate
with such Terminating Fund in the execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
Section 7.02. Termination as to One or More Portfolios. This Agreement
may be terminated as to one or more of a Fund's Portfolios (but less than
all of its Portfolios) by delivery of an amended Appendix "A" deleting such
Portfolios pursuant to Section 9.05(b) hereof, in which case termination as
to such deleted Portfolios shall take effect thirty (30) days after the
date of such delivery. The execution and delivery of an amended Appendix
"A" which deletes one or more Portfolios shall constitute a termination of
this Agreement only with respect to such deleted Portfolio(s), shall be
governed by the preceding provisions of Section 7.01 as to the
identification of a successor custodian and the delivery of cash,
securities and other assets of the Portfolio(s) so deleted, and shall not
affect the obligations of the Custodian and any Fund hereunder with respect
to the other Portfolios set forth in Appendix "A," as amended from time to
time.
ARTICLE VIII
DEFINED TERMS
The following terms are defined in the following sections:
Term Section
Account 2.22
ADRs 2.06
Additional Custodian 2.23(a)
Authorized Person(s) 3.02
Banking Institution 2.12(a)
Business Day Appendix "C"
Bank Accounts 2.21
Distribution Account 2.16
Domestic Subcustodian 4.01
Foreign Subcustodian 4.02(a)
Fund Preamble
Institutional Client 2.03
Interim Subcustodian 4.02(b)
Overdraft 2.28
Overdraft Notice 2.28
Person 5.01(b)
Portfolio Preamble
Procedural Agreement 2.10
Proper Instructions 3.01(a)
SEC 2.22
Securities System 2.22
Shares 2.16
Special Instructions 3.01(b)
Special Subcustodian 4.03
Subcustodian Article IV
Terminating Fund 7.01
1940 Act Preamble
ARTICLE IX
MISCELLANEOUS
Section 9.01. Execution of Documents, Etc.
(a) Actions by each Fund. Upon request, each Fund shall execute and
deliver to the Custodian such proxies, powers of attorney or other
instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their
respective obligations to such Fund under this Agreement or any applicable
subcustodian agreement with respect to such Fund, provided that the
exercise by the Custodian or any Subcustodian of any such rights shall in
all events be in compliance with the terms of this Agreement.
(b) Actions by Custodian. Upon receipt of Proper Instructions, the
Custodian shall execute and deliver to each applicable Fund or to such
other parties as such Fund(s) may designate in such Proper Instructions,
all such documents, instruments or agreements as may be reasonable and
necessary or desirable in order to effectuate any of the transactions
contemplated hereby.
Section 9.02. Representative Capacity; Nonrecourse Obligations. A COPY
OF THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH FUND
IS ON FILE WITH THE SECRETARY OF THE STATE OF THE FUND'S FORMATION, AND
NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE
TRUSTEES OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT
ARE NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS, SHAREHOLDERS OR
PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS AND
PROPERTY OF EACH FUND'S RESPECTIVE PORTFOLIOS. THE CUSTODIAN AGREES THAT
NO SHAREHOLDER, TRUSTEE, OFFICER OR PARTNER OF ANY FUND MAY BE HELD
PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY FUND ARISING
OUT OF THIS AGREEMENT.
Section 9.03. Several Obligations of the Funds and the Portfolios. WITH
RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS PORTFOLIOS
ARISING OUT OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE
OBLIGATIONS ARISING UNDER SECTIONS 2.28, 5.03, 5.05 and ARTICLE VI HEREOF,
THE CUSTODIAN SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY OBLIGATION
SOLELY TO THE ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION
RELATES AS THOUGH EACH FUND HAD SEPARATELY CONTRACTED WITH THE CUSTODIAN BY
SEPARATE WRITTEN INSTRUMENT WITH RESPECT TO EACH OF ITS PORTFOLIOS.
Section 9.04. Representations and Warranties.
(a) Representations and Warranties of Each Fund. Each Fund hereby
severally and not jointly represents and warrants that each of the
following shall be true, correct and complete with respect to each Fund at
all times during the term of this Agreement: (i) the Fund is duly organized
under the laws of its jurisdiction of organization and is registered as an
open-end management investment company under the 1940 Act; and (ii) the
execution, delivery and performance by the Fund of this Agreement are (w)
within its power, (x) have been duly authorized by all necessary action,
and (y) will not (A) contribute to or result in a breach of or default
under or conflict with any existing law, order, regulation or ruling of any
governmental or regulatory agency or authority, or (B) violate any
provision of the Fund's corporate charter, Declaration of Trust or other
organizational document, or bylaws, or any amendment thereof or any
provision of its most recent Prospectus or Statement of Additional
Information.
(b) Representations and Warranties of the Custodian. The Custodian
hereby represents and warrants to each Fund that each of the following
shall be true, correct and complete at all times during the term of this
Agreement: (i) the Custodian is duly organized under the laws of its
jurisdiction of organization and qualifies to act as a custodian to
open-end management investment companies under the provisions of the 1940
Act; and (ii) the execution, delivery and performance by the Custodian of
this Agreement are (w) within its power, (x) have been duly authorized by
all necessary action, and (y) will not (A) contribute to or result in a
breach of or default under or conflict with any existing law, order,
regulation or ruling of any governmental or regulatory agency or authority,
or (B) violate any provision of the Custodian's corporate charter, or other
organizational document, or bylaws, or any amendment thereof.
Section 9.05. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the
Custodian, on the other, with respect to the subject matter hereof and
accordingly, supersedes as of the effective date of this Agreement any
custodian agreement heretofore in effect between each Fund and the
Custodian.
Section 9.06. Waivers and Amendments. No provision of this Agreement may
be waived, amended or terminated except by a statement in writing signed by
the party against which enforcement of such waiver, amendment or
termination is sought; provided, however: (a) Appendix "A" listing the
Portfolios of each Fund for which the Custodian serves as custodian may be
amended from time to time to add one or more Portfolios for one or more
Funds, by each applicable Fund's execution and delivery to the Custodian of
an amended Appendix "A", and the execution of such amended Appendix by the
Custodian, in which case such amendment shall take effect immediately upon
execution by the Custodian; (b) Appendix "A" may be amended from time to
time to delete one or more Portfolios (but less than all of the Portfolios)
of one or more of the Funds, by each applicable Fund's execution and
delivery to the Custodian of an amended Appendix "A", in which case such
amendment shall take effect thirty (30) days after such delivery, unless
otherwise agreed by the Custodian and each applicable Fund in writing; (c)
Appendix "B" listing Foreign Subcustodians, Special Subcustodians and
Additional Custodians approved by any Fund may be amended from time to time
to add or delete one or more Foreign Subcustodians, Special Subcustodians
or Additional Custodians for a Fund or Funds by each applicable Fund's
execution and delivery to the Custodian of an amended Appendix "B", in
which case such amendment shall take effect immediately upon execution by
the Custodian; and (d) Appendix "C" setting forth the procedures relating
to the Custodian's security interest with respect to each Fund may be
amended only by an instrument in writing executed by each applicable Fund
and the Custodian.
Section 9.07. Interpretation. In connection with the operation of this
Agreement, the Custodian and any Fund may agree in writing from time to
time on such provisions interpretative of or in addition to the provisions
of this Agreement with respect to such Fund as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative
or additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Agreement or affect any other Fund.
Section 9.08. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the
parties hereto.
Section 9.09. Governing Law. Insofar as any question or dispute may
arise in connection with the custodianship of foreign securities pursuant
to an agreement with a Foreign Subcustodian that is governed by the laws of
the State of New York, the provisions of this Agreement shall be construed
in accordance with and governed by the laws of the State of New York,
provided that in all other instances this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Massachusetts, in each case without giving effect to principles of
conflicts of law.
Section 9.10. Notices. Except in the case of Proper Instructions or
Special Instructions, notices and other writings contemplated by this
Agreement shall be delivered by hand or by facsimile transmission (provided
that in the case of delivery by facsimile transmission, notice shall also
be mailed postage prepaid to the parties at the following addresses:
(a) If to any Fund:
c/o Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attn: Treasurer of the Fidelity Funds
Telephone: (617) 563-7000
Telefax: (617) 476-4195
(b) If to the Custodian:
Brown Brothers Harriman & Company
40 Water Street
Boston, Massachusetts 02109
Attn: W. Casey Gildea, Assistant Manager
Telephone: (617) 772-1330
Telefax: (617) 772-2263
or to such other address as a Fund or the Custodian may have designated in
writing to the other.
Section 9.11. Assignment. This Agreement shall be binding on and shall
inure to the benefit of each Fund severally and the Custodian and their
respective successors and assigns, provided that, subject to the provisions
of Section 7.01 hereof, neither the Custodian nor any Fund may assign this
Agreement or any of its rights or obligations hereunder without the prior
written consent of the other party.
Section 9.12. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original. With respect
to each Fund, this Agreement shall become effective when one or more
counterparts have been signed and delivered by such Fund and the Custodian.
Section 9.13. Confidentiality; Survival of Obligations. The parties
hereto agree that each shall treat confidentially the terms and conditions
of this Agreement and all information provided by each party to the other
regarding its business and operations. All confidential information
provided by a party hereto shall be used by any other party hereto solely
for the purpose of rendering services pursuant to this Agreement and,
except as may be required in carrying out this Agreement, shall not be
disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is
publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by any bank examiner of the Custodian or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation. The provisions of this Section
9.13 and Sections 9.01, 9.02, 9.03, 9.09, Section 2.28, Section 3.04,
Section 7.01, Article V and Article VI hereof and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this Agreement shall survive any termination of this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on Brown Brothers Harriman &
Company
Appendix "A" Attached Hereto, on Behalf
of each of Their Respective Portfolios
By: /s/ Gary French By: /s/ Donahue
Name: Gary French Name: Donahue
Title: Treasurer Title: Partner
APPENDIX "A"
TO
CUSTODIAN AGREEMENT
BETWEEN
Brown Brothers Harriman & Co. and each of the following Investment
Companies
Dated as of September 1, 1994
The following is a list of Funds and their respective Portfolios for which
the Custodian shall serve under a Custodian Agreement dated as of September
1, 1994:
Fund Portfolio Effective as of:
Fidelity Advisor Annuity Fund Fidelity Advisor Annuity Growth Opportunities
Fund September 1, 1994
Fidelity Advisor Series II Fidelity Advisor Growth Opportunities Fund
September 1, 1994
Fidelity Advisor Series V Fidelity Advisor Global Resources Fund September
1, 1994
Fidelity Advisor Series VIII Fidelity Advisor Strategic Opportunities Fund
September 1, 1994
Fidelity Capital Trust Fidelity Capital Appreciation Fund September 1, 1994
Fidelity Disciplined Equity Fund September 1, 1994
Fidelity Stock Selector September 1, 1994
Fidelity Value Fund September 1, 1994
Fidelity Commonwealth Trust Fidelity Market Index Fund September 1, 1994
Fidelity Small Cap Stock Fund September 1, 1994
Fidelity Congress Street Fund Fidelity Congress Street Fund September 1,
1994
Fidelity Contrafund Fidelity Contrafund September 1, 1994
Fidelity Devonshire Trust Fidelity Real Estate Investment Portfolio
September 1, 1994
Fidelity Utilities Fund September 1, 1994
Fidelity Exchange Fund Fidelity Exchange Fund September 1, 1994
Fidelity Financial Trust Fidelity Convertible Securities Fund September 1,
1994
Fidelity Retirement Growth Fund September 1, 1994
Fidelity Hastings Street Trust Fidelity Fifty September 1, 1994
Fidelity Institutional Trust Fidelity U.S. Equity Index Portfolio September
1, 1994
Fidelity Investment Trust Fidelity Canada Fund September 1, 1994
Fidelity Latin America Fund September 1, 1994
Fidelity Short Term World Income Fund September 1, 1994
Fidelity Magellan Fund Fidelity Magellan Fund September 1, 1994
Fidelity Mt. Vernon Street Trust Fidelity Emerging Growth Fund September 1,
1994
Fidelity Growth Company Fund September 1, 1994
Fidelity Puritan Trust Fidelity Balanced Fund September 1, 1994
Fidelity Global Balanced Fund September 1, 1994
Fidelity Low-Priced Stock Fund September 1, 1994
Fidelity Securities Fund Fidelity Blue Chip Growth Fund September 1, 1994
Fidelity Dividend Growth Fund September 1, 1994
Fidelity OTC Portfolio September 1, 1994
Fidelity Select Portfolios Air Transportation Portfolio September 1, 1994
American Gold Portfolio September 1, 1994
Automotive Portfolio September 1, 1994
Biotechnology Portfolio September 1, 1994
Brokerage and Investment Management Portfolio September 1, 1994
Chemicals Portfolio September 1, 1994
Computers Portfolio September 1, 1994
Construction and Housing Portfolio September 1, 1994
Consumer Products Portfolio September 1, 1994
Defense and Aerospace Portfolio September 1, 1994
Developing Communications Portfolio September 1, 1994
Electronics Portfolio September 1, 1994
Energy Portfolio September 1, 1994
Energy Service Portfolio September 1, 1994
Environmental Services Portfolio September 1, 1994
Financial Services Portfolio September 1, 1994
Food and Agriculture Portfolio September 1, 1994
Health Care Portfolio September 1, 1994
Home Finance Portfolio September 1, 1994
Industrial Equipment Portfolio September 1, 1994
Industrial Materials Portfolio September 1, 1994
Insurance Portfolio September 1, 1994
Leisure Portfolio September 1, 1994
Medical Delivery Portfolio September 1, 1994
Multimedia Portfolio September 1, 1994
Natural Gas Portfolio September 1, 1994
Paper and Forest Products Portfolio September 1, 1994
Precious Metals and Minerals Portfolio September 1, 1994
Regional Banks Portfolio September 1, 1994
Retailing Portfolio September 1, 1994
Software and Computer Service Portfolio September 1, 1994
Technology Portfolio September 1, 1994
Telecommunications Portfolio September 1, 1994
Transportation Portfolio September 1, 1994
Utilities Growth Portfolio September 1, 1994
Variable Insurance Products Fund Growth Portfolio September 1, 1994
Variable Insurance Products Fund II Index 500 Portfolio September 1, 1994
Contrafund Portfolio September 1, 1994
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to
be executed in its name and behalf as of the day and year first set forth
opposite each such Portfolio.
Each of the Investment Companies Brown Brothers Harriman & Co.
Listed on this Appendix "a", on behalf
of each of their respective portfolios
By: /s/ Gary French By: /s/ Donahue
Name: Gary French Name: Donahue
Title: Treasurer Title: Partner
Appendix "B"
To
Custodian Agreement
Between
Brown Brothers Harriman & Co. and Each of the Investment
Companies Listed on Appendix "A" thereto
Dated as of December 15, 1994
The following is a list of Additional Custudians, Special Subcustodians
and Foreign Subcustodians under the Custodian Agreement dated as of
September 1, 1994 (the "Custodian Agreement"):
A. Additional Custodians
CUSTODIAN PURPOSE
None
B. Special Subcustodians:
SUBCUSTODIAN PURPOSE
Morgan Guaranty Trust Co. of New York FICASH
C. Foreign Subcustodians:
COUNTRY FOREIGN SUBCUSTODIAN DEPOSITORY
Argentina Citibank, N.A., Buenos Aires Caja de Valores, S.A.
First National Bank of Boston, Buenos Aires
Australia National Australia Bank Ltd., Melbourne Austraclear Limited
The Reserve Bank Information and Transfer System (RITS)
Austria Creditanstalt-Bankverein, Vienna Osterreichische Kontrollbank
Aktiengesellschaft (OEKB)
Bangladesh Standard Chartered Bank, Dhaka None
Belgium Morgan Guaranty Trust Co. of New York, Brussels Caisse
Interprofessionnelle de Depot
et de Virement de Titres (CIK)
Banque Nationale de Belgique
Bostwana Barclays Bank of Bostwana Ltd., Gaborone None
Brazil First National Bank of Boston, Sao Paulo Sao Paulo Stock Exchange
(BOVESPA), Sistema Especial de
Liquidacao e Custodia (SELIC)
Rio de Janeiro Exchange (BVRJ);
Camara de Liquidacao e Custodia
S.A. (CLC)
Canada Canadian Imperial Bank of Commerce, Toronto Canadian Depository for
Securities,
Ltd., (CDS)
Chile Citibank, N.A., Santiago None
China-Shanghai Standard Chartered Bank, Shanghai Shanghai Securities
Central Clearing & Registration Corporation (SSCCRC)
China-Shenzhen Standard Chartered Bank, Shenzhen Shenzhen Securities
Registration Corp. Ltd., (SSRC)
Colombia Cititrust Colombia , S.A., Sociedad Fiduciaria, Bogota None
Czech Republic Ceskoslovenska Obchodni Banka, A.S., Prague Securities
Center (SCP)
Czech National Bank
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen - VP Center
Finland Union Bank of Finland Ltd., Helsinki The Central Share Register of
Finland Cooperative (CSR)
Helsinki Money Market Center Ltd.,
(HMMC)
France Morgan Guaranty Trust Co., of New York, Paris SICOVAM
Banque de France
Germany Morgan Guaranty Trust Co. of New York, Frankfurt Deutscher
Kassenverein AG (DKV)
Ghana Barclays Bank of Ghana Ltd., Accra None
Greece Citibank, N.A., Athens Apothetirio Titlon A.E.
Hong Kong Chase Manhattan Bank, N.A., Hong Kong Hong Kong Securities
Clearing Co. Ltd., (HKSCC), Central Clearing and
The Hongkong & Shanghai Banking Settlement System (CCASS)
Corp., Ltd., Hong Kong
Hungary Citibank Budapest, Rt. Central Depository and Clearing
House (Budapest) Ltd., (KELER Ltd.)
India Citibank, N.A., Bombay None
Standard Chartered Bank
Indonesia Citibank, N.A., Jakarta None
Ireland Allied Irish Banks, plc., Dublin Gilt Settlement Office (GSO)
Israel Bank Hapoalim, B.M. None
Italy Banca Commerciale Italiana, Milan Monte Titoli S.p.A.
Banca D'Italia
Japan Sumitomo Trust & Banking Co., Osaka Japan Securities Depository
Center
(JASDEC)
Bank of Japan
Kenya Barclays Bank of Kenya Ltd. None
Malaysia Hongkong Bank Malaysia Berhad Malaysian Central Depository Sdn.
Bhd. (MCD)
Bank Negara Malaysia
Mexico Citibank, N.A., Mexico City Institucion para el Deposito de
Valores- S.D. INDEVAL, S.A. de C.V.
Banco de Mexico
Morocco Banque Marocaine du Commerce Exterieur, None
Casablanca
Netherlands ABN-AMRO, Bank N. V., Amsterdam Nederlands Centraal Instituut
voor Giraal Effektenverkeer BV (NECIGEF)/KAS Associatie N.V.
(KAS)
De Nederlandsche Bank (DBN)
New Zealand National Australia Bank Ltd., Melbourne Austraclear Limited
(RBNZ)
Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)
Pakistan Standard Chartered Bank, Karachi None
Peru Citibank, N.A., Lima Caja de Valores (CAVAL)
Philippines Citibank, N.A., Manila None
Poland Citibank Poland, S.A. National Depository of Securtities
Portugal Banco Espirito Santo E Comercial Central de Valores Mobiliaros
de Lisboa, S.A., Lisbon (Interbolsa)
Singapore Chase Manhattan Bank, N.A., Singapore Central Depository Pte
Ltd., (CDP)
Hongkong & Shanghai Banking
Corp., Ltd., Singapore
Slovak Republic Ceskoslovenska Obchodni Banka, A.S., Bratislava Stredisko
Cennych Papeirov (SCP)
National Bank of Slovakia
South Africa First National Bank of Southern Africa Ltd., The Central
Depository (Pty) Ltd. Johannesburg (CD)
South Korea Citibank, N.A., Seoul Korean Securities Depository (KSD)
Spain Banco Santander S.A., Madrid Servicio de Compensacion y
Liquidacion de Valores (SCLV)
Banco de Espana
Sri Lanka Hongkong & Shanghai Banking Corp. Ltd., Central Depository
System (Pvt) Colombo Limited, (CDS)
Swaziland Barclays Bank of Swaziland Ltd. None
Sweden Skandinaviska Enskilda Banken, Stokholm Vardepappercentralen VPC AB
Switzerland Swiss Bank Corporation, Basel Schweizerische Effekten - Giro
A.G.
(SEGA)
Taiwan Standard Chartered Bank Taiwan Securities Central Depository
Co. Ltd. (TDSC)
Thailand Hongkong & Shanghai Banking Corp. Ltd., Share Depository Center
(SDC)
Bangkok
Transnational CEDEL S.A., Luxembourg
Euroclear Clearance System
Societe Cooperative, Belgium
Turkey Citibank, N.A., Istanbul Takas ve Saklama A.S. (TvS)
Central Bank of Turkey (CBT)
United Kingdom The Bank of New York, London Central Gilts Office (CGO)
Morgan Guaranty Trust Co. of New York, Central Money Markets Office(CMO)
London
Uruguay Citibank, N.A., Montevideo None
Venezuela Citibank, N.A., Caracas None
Zimbabwe Barclays Bank of Zimbabwe Ltd., Harare None
Each of the Investment Companies Listed on Appendix "A" to the
Custodian Agreement,
on Behalf of Each of Their Respective Portfolios
By: /s/ Gary French
Name: Gary French
Title: Treasurer
Appendix "C" to the
Custodian Agreement
Between
Each of the Investment Companies
Listed on Appendix "A" Thereto
And
BROWN BROTHERS HARRIMAN & COMPANY
Dated as of SEPTEMBER 1, 1994
PROCEDURES RELATING TO CUSTODIAN'S SECURITY INTEREST
As security for any Overdrafts (as defined in the Custodian Agreement) of
any Portfolio, the applicable Fund, on behalf of such Portfolio, shall
pledge, assign and grant to the Custodian a security interest in Collateral
(as hereinafter defined), under the terms, circumstances and conditions set
forth in this Appendix "C".
Section 1. Defined Terms. As used in this Appendix "C" the following
terms shall have the following respective meanings:
(a) "Business Day" shall mean any day that is not a Saturday, a Sunday or
a day on which the Custodian is closed for business.
(b) "Collateral" shall mean, with respect to any Portfolio, securities
held by the Custodian on behalf of the Portfolio having a fair market value
(as determined in accordance with the procedures set forth in the
prospectus for the Portfolio) equal to the aggregate of all Overdraft
Obligations of such Portfolio: (i) identified in any Pledge Certificate
executed on behalf of such Portfolio; or (ii) designated by the Custodian
for such Portfolio pursuant to Section 3 of this Appendix C. Such
securities shall consist of marketable securities held by the Custodian on
behalf of such Portfolio or, if no such marketable securities are held by
the Custodian on behalf of such Portfolio, such other securities designated
by the applicable Fund in the applicable Pledge Certificate or by the
Custodian pursuant to Section 3 of this Appendix C.
(c) "Overdraft Obligations" shall mean, with respect to any Portfolio, the
amount of any outstanding Overdraft(s) provided by the Custodian to such
Portfolio together with all accrued interest thereon.
(d) "Pledge Certificate" shall mean a Pledge Certificate in the form
attached to this Appendix "C" as Schedule 1 executed by a duly authorized
officer of the applicable Fund and delivered by such Fund to the Custodian
by facsimile transmission or in such other manner as the applicable Fund
and the Custodian may agree in writing.
(e) "Release Certificate" shall mean a Release Certificate in the form
attached to this Appendix "C" as Schedule 2 executed by a duly authorized
officer of the Custodian and delivered by the Custodian to the applicable
Fund by facsimile transmission or in such other manner as such Fund and the
Custodian may agree in writing.
(f) "Written Notice" shall mean a written notice executed by a duly
authorized officer of the party delivering the notice and delivered by
facsimile transmission or in such other manner as the applicable Fund and
the Custodian shall agree in writing.
Section 2. Pledge of Collateral. To the extent that any Overdraft
Obligations of a Portfolio are not satisfied by the close of business on
the first Business Day following the Business Day on which the applicable
Fund receives Written Notice requesting security for such Overdraft
Obligation and stating the amount of such Overdraft Obligation, the
applicable Fund, on behalf of such Portfolio, shall pledge, assign and
grant to the Custodian a first priority security interest, by delivering to
the Custodian, a Pledge Certificate executed by such Fund on behalf of such
Portfolio describing the applicable Collateral. Such Written Notice may,
in the discretion of the Custodian, be included within or accompany the
Overdraft Notice relating to the applicable Overdraft Obligations.
Section 3. Failure to Pledge Collateral. In the event that the
applicable Fund shall fail: (a) to pay, on behalf of the applicable
Portfolio, the Overdraft Obligation described in such Written Notice; (b)
to deliver to the Custodian a Pledge Certificate pursuant to Section 2; or
(c) to identify substitute securities pursuant to Section 6 upon the sale
or maturity of any securities identified as Collateral, the Custodian may,
by Written Notice to the applicable Fund specify Collateral which shall
secure the applicable Overdraft Obligation. Such Fund, on behalf of any
applicable Portfolio, hereby pledges, assigns and grants to the Custodian a
first priority security interest in any and all Collateral specified in
such Written Notice; provided that such pledge, assignment and grant of
security shall be deemed to be effective only upon receipt by the
applicable Fund of such Written Notice.
Section 4. Delivery of Additional Collateral. If at any time the
Custodian shall notify a Fund by Written Notice that the fair market value
of the Collateral securing any Overdraft Obligation of one of such Fund's
Portfolios is less than the amount of such Overdraft Obligation, such Fund,
on behalf of the applicable Portfolio, shall deliver to the Custodian,
within one (1) Business Day following the Fund's receipt of such Written
Notice, an additional Pledge Certificate describing additional Collateral.
If such Fund shall fail to deliver such additional Pledge Certificate, the
Custodian may specify Collateral which shall secure the unsecured amount of
the applicable Overdraft Obligation in accordance with Section 3 of this
Appendix C.
Section 5. Release of Collateral. Upon payment by a Fund, on behalf of
one of its Portfolios, of any Overdraft Obligation secured by the pledge of
Collateral, the Custodian shall promptly deliver to such Fund a Release
Certificate pursuant to which the Custodian shall release Collateral from
the lien under the applicable Pledge Certificate or Written Notice pursuant
to Section 3 having a fair market value equal to the amount paid by such
Fund on account of such Overdraft Obligation. In addition, if at any time
a Fund shall notify the Custodian by Written Notice that such Fund desires
that specified Collateral be released and: (a) that the fair market value
of the Collateral securing any Overdraft Obligation shall exceed the amount
of such Overdraft Obligation; or (b) that the Fund has delivered a Pledge
Certificate substituting Collateral for such Overdraft Obligation, the
Custodian shall deliver to such Fund, within one (1) Business Day following
the Custodian's receipt of such Written Notice, a Release Certificate
relating to the Collateral specified in such Written Notice.
Section 6. Substitution of Collateral. A Fund may substitute securities
for any securities identified as Collateral by delivery to the Custodian of
a Pledge Certificate executed by such Fund on behalf of the applicable
Portfolio, indicating the securities pledged as Collateral.
Section 7. Security for Individual Portfolios' Overdraft Obligations.
The pledge of Collateral by a Fund on behalf of any of its individual
Portfolios shall secure only the Overdraft Obligations of such Portfolio.
In no event shall the pledge of Collateral by one of a Fund's Portfolios be
deemed or considered to be security for the Overdraft Obligations of any
other Portfolio of such Fund or of any other Fund.
Section 8. Custodian's Remedies. Upon (a) a Fund's failure to pay any
Overdraft Obligation of an applicable Portfolio within thirty (30) days
after receipt by such Fund of a Written Notice demanding security
therefore, and (b) one (1) Business Day's prior Written Notice to such
Fund, the Custodian may elect to enforce its security interest in the
Collateral securing such Overdraft Obligation, by taking title to (at the
then prevailing fair market value), or selling in a commercially reasonable
manner, so much of the Collateral as shall be required to pay such
Overdraft Obligation in full. Notwithstanding the provisions of any
applicable law, including, without limitation, the Uniform Commercial Code,
the remedy set forth in the preceding sentence shall be the only right or
remedy to which the Custodian is entitled with respect to the pledge and
security interest granted pursuant to any Pledge Certificate or Section 3.
Without limiting the foregoing, the Custodian hereby waives and
relinquishes all contractual and common law rights of set off to which it
may now or hereafter be or become entitled with respect to any obligations
of any Fund to the Custodian arising under this Appendix "C" to the
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Appendix to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies Listed on BROWN BROTHERS HARRIMAN &
Schedule "A" to the Custodian Agreement, on COMPANY
Behalf of Each of Their Respective Portfolios
By: /s/ Gary French By: /s/ Donahue
Name: Gary French Name: Donahue
Title: Treasurer Title: Partner
SCHEDULE 1
TO
APPENDIX "C"
PLEDGE CERTIFICATE
This Pledge Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to [Section 2 or Section 4] of Appendix "C"
attached to the Agreement, the Fund, on behalf of [ ] (the
"Portfolio"), hereby pledges, assigns and grants to the Custodian a first
priority security interest in the securities listed on Exhibit "A" attached
to this Pledge Certificate (collectively, the "Pledged Securities"). Upon
delivery of this Pledge Certificate, the Pledged Securities shall
constitute Collateral, and shall secure all Overdraft Obligations of the
Portfolio described in that certain Written Notice dated , 19 ,
delivered by the Custodian to the Fund. The pledge, assignment and grant
of security in the Pledged Securities hereunder shall be subject in all
respect to the terms and conditions of the Agreement, including, without
limitation, Sections 7 and 8 of Appendix "C" attached thereto.
IN WITNESS WHEREOF, the Fund has caused this Pledge Certificate to be
executed in its name, on behalf of the Portfolio this day of 19 .
[FUND], on Behalf of [Portfolio]
By: ___________________
Name: ___________________
Title: ___________________
EXHIBIT "A"
TO
PLEDGE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
SCHEDULE 2
TO
APPENDIX "C"
RELEASE CERTIFICATE
This Release Certificate is delivered pursuant to the Custodian Agreement
dated as of [ ] (the "Agreement"), between [ ] (the
"Fund") and [ ] (the "Custodian"). Capitalized terms used herein
without definition shall have the respective meanings ascribed to them in
the Agreement. Pursuant to Section 5 of Appendix "C" attached to the
Agreement, the Custodian hereby releases the securities listed on Exhibit
"A" attached to this Release Certificate from the lien under the [Pledge
Certificate dated ___________, 19 or the Written Notice delivered
pursuant to Section 3 of Appendix "C" dated _________, 19 ].
IN WITNESS WHEREOF, the Custodian has caused this Release Certificate to
be executed in its name and on its behalf this day of 19 .
BROWN BROTHERS HARRIMAN & COMPANY
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT "A"
TO
RELEASE CERTIFICATE
Type of Certificate/CUSIP Number of
Issuer Security Numbers Shares
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectuses
and Statements of Additional Information in Post-Effective Amendment No. 20
to the Registration Statement on Form N-1A of Fidelity Institutional Trust:
U.S. Equity Index Portfolio and U.S. Bond Index Portfolio of our reports
dated April 6 and April 10, 1995, respectively, on the financial statements
and financial highlights included in the February 28, 1995 Annual Reports
to Shareholders of U.S. Equity Index Portfolio and U.S. Bond Index
Portfolio.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectuses and "Auditor" in the Statements
of Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
April 13, 1995
EXHIBIT 16(A)
U.S. EQUITY INDEX PORTFOLIO
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions, and
reinvestment prices of the historical period covered.
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]
<TABLE>
<CAPTION>
<S> <C>
Name: U.S. Equity Index (650) MonthEnd MonthEnd MonthEnd
Notes: ERR ERR ERR
Load: ERR
Redemption: ERR MonthEnd
FiscYear: 28-Feb ERR ERR
</TABLE>
Column Column Heading
A Pay Date
B X-Date
C X-NAV
D Month End
E Cum Shares
F Total Value
G Div
H CGLong
I CGShort
J Rep NAV
K Div Shares
L Value of Reinvest Div
M Cap Gain Shares
N Value of Reinvest Cap Gains
O Total Value
P Div Rcv'd in Cash
Q Cap Gains Rcv'd in Cash
R Cost of Reinvest Distributions
<TABLE>
<CAPTION>
<S> <C>
A B C D E F G H I J K L M N O P Q R
1.00 17-Feb-8810000.000 100000.00 10.00
1.00 Feb-88 10000.000 103400.00 10.34 0.00 0.00 0.00 0.00 ** 0.00 0.00 0.00
1.00 Mar-88 10000.000 100200.00 10.02 0.00 0.00 0.00 0.00 ** 0.00 0.00 0.00
1.00 Apr-88 10000.000 100900.00 10.09 0.00 0.00 0.00 0.00 ** 0.00 0.00 0.00
1.00 May-88 10000.000 101700.00 10.17 0.00 0.00 0.00 0.00 ** 0.00 0.00 0.00
27-Jun 13-Jun 10.45 Jun-88 10000.000 105500.00 0.08 10.55 76.56 807.66 0.00 0.00 ** 800.00 0.00 800.00
1.00 Jul-88 10000.000 105300.00 10.53 76.56 806.12 0.00 0.00 ** 800.00 0.00 800.00
1.00 Aug-88 10000.000 101700.00 10.17 76.56 778.56 0.00 0.00 ** 800.00 0.00 800.00
26-Sep 12-Sep 10.29 Sep-88 10000.000 105100.00 0.08 10.51 154.90 1627.96 0.00 0.00 ** 1600.00 0.00 1606.12
1.00 Oct-88 10000.000 108100.00 10.81 154.90 1674.43 0.00 0.00 ** 1600.00 0.00 1606.12
1.00 Nov-88 10000.000 106500.00 10.65 154.90 1649.64 0.00 0.00 ** 1600.00 0.00 1606.12
29-Dec 15-Dec10.56 Dec-88 10000.000 107100.00 0.11 0.01 0.0110.71 260.68 2791.84 19.23 205.99 ** 2700.00 200.00 2926.26
1.00 Jan-89 10000.000 114900.00 11.49 260.68 2995.17 19.23 220.99 ** 2700.00 200.00 2926.26
1.00 Feb-89 10000.000 112100.00 11.21 260.68 2922.18 19.23 215.60 ** 2700.00 200.00 2926.26
27-Mar 13-Mar11.40 Mar-89 10000.000 113900.00 0.08 11.39 332.82 3790.77 19.23 219.06 ** 3500.00 200.00 3748.65
1.00 Apr-89 10000.000 119900.00 11.99 332.82 3990.46 19.23 230.60 ** 3500.00 200.00 3748.65
1.00 May-89 10000.000 124700.00 12.47 332.82 4150.22 19.23 239.84 ** 3500.00 200.00 3748.65
26-Jun 12-Jun12.62 Jun-89 10000.000 123100.00 0.08 12.31 398.44 4904.78 19.23 236.76 ** 4300.00 200.00 4576.82
1.00 Jul-89 10000.000 134300.00 13.43 398.44 5351.04 19.23 258.30 ** 4300.00 200.00 4576.82
1.00 Aug-89 10000.000 136800.00 13.68 398.44 5450.65 19.23 263.11 ** 4300.00 200.00 4576.82
25-Sep 11-Sep13.47 Sep-89 10000.000 135400.00 0.08 13.54 460.31 6232.61 19.23 260.41 ** 5100.00 200.00 5410.23
1.00 Oct-89 10000.000 132300.00 13.23 460.31 6089.91 19.23 254.45 ** 5100.00 200.00 5410.23
1.00 Nov-89 10000.000 135000.00 13.50 460.31 6214.20 19.23 259.65 ** 5100.00 200.00 5410.23
02-Jan 19-Dec13.06 Dec-89 10000.000 134800.00 0.18 0.04 0.10 13.48 604.75 8151.98 131.57 1773.58** 6900.00 1600.00 8763.69
1.00 Jan-90 10000.000 125700.00 12.57 604.75 7601.66 131.57 1653.85** 6900.00 1600.00 8763.69
1.00 Feb-90 10000.000 127300.00 12.73 604.75 7698.42 131.57 1674.90** 6900.00 1600.00 8763.69
21-Mar 09-Mar12.87 Mar-90 10000.000 129600.00 0.10 12.96 688.17 8918.64 131.57 1705.16** 7900.00 1600.00 9837.32
1.00 Apr-90 10000.000 126400.00 12.64 688.17 8698.43 131.57 1663.06** 7900.00 1600.00 9837.32
1.00 May-90 10000.000 138700.00 13.87 688.17 9544.88 131.57 1824.89** 7900.00 1600.00 9837.32
08-Jun 08-Jun13.68 Jun-90 10000.000 136700.00 0.10 13.67 767.26 10488.43 131.57 1798.58** 8900.00 1600.00 10919.29
1.00 Jul-90 10000.000 136200.00 13.62 767.26 10450.07 131.57 1792.00** 8900.00 1600.00 10919.29
1.00 Aug-90 10000.000 123700.00 12.37 767.26 9490.99 131.57 1627.53** 8900.00 1600.00 10919.29
14-Sep 14-Sep12.06 Sep-90 10000.000 116600.00 0.10 11.66 857.63 9999.98 131.57 1534.12** 9900.00 1600.00 12009.17
1.00 Oct-90 10000.000 116100.00 11.61 857.63 9957.10 131.57 1527.54** 9900.00 1600.00 12009.17
1.00 Nov-90 10000.000 123600.00 12.36 857.63 10600.32 131.57 1626.22** 9900.00 1600.00 12009.17
07-Dec 07-Dec12.44 Dec-90 10000.000 125500.00 0.14 12.55 981.30 12315.37 131.57 1651.22**11300.00 1600.00 13547.66
1.00 Jan-91 10000.000 131000.00 13.10 981.30 12855.08 131.57 1723.58**11300.00 1600.00 13547.66
1.00 Feb-91 10000.000 140300.00 14.03 981.30 13767.70 131.57 1845.94**11300.00 1600.00 13547.66
15-Mar 15-Mar14.19 Mar-91 10000.000 142700.00 0.10 14.27 1059.62 15120.76 131.57 1877.52**12300.00 1600.00 14658.95
1.00 Apr-91 10000.000 143000.00 14.30 1059.62 15152.55 131.57 1881.47**12300.00 1600.00 14658.95
1.00 May-91 10000.000 149100.00 14.91 1059.62 15798.92 131.57 1961.72**12300.00 1600.00 14658.95
07-Jun 07-Jun14.42 Jun-91 10000.000 141300.00 0.10 14.13 1137.23 16069.03 131.57 1859.10**13300.00 1600.00 15778.07
1.00 Jul-91 10000.000 147800.00 14.78 1137.23 16808.23 131.57 1944.62**13300.00 1600.00 15778.07
1.00 Aug-91 10000.000 151300.00 15.13 1137.23 17206.26 131.57 1990.67**13300.00 1600.00 15778.07
16-Sep 13-Sep14.59 Sep-91 10000.000 147700.00 0.10 14.77 1214.46 17937.63 131.57 1943.30**14300.00 1600.00 16904.95
1.00 Oct-91 10000.000 149700.00 14.97 1214.46 18180.53 131.57 1969.62**14300.00 1600.00 16904.95
1.00 Nov-91 10000.000 143600.00 14.36 1214.46 17439.70 131.57 1889.36**14300.00 1600.00 16904.95
09-Dec 06-Dec14.23 Dec-91 10000.000 156800.00 0.13 0.13 0.03 15.68 1318.12 20668.07 259.14 4063.38**15600.00 3200.00 20195.30
1.00 Jan-92 10000.000 153800.00 15.38 1318.12 20272.64 259.14 3985.63**15600.00 3200.00 20195.30
1.00 Feb-92 10000.000 155800.00 15.58 1318.12 20536.26 259.14 4037.46**15600.00 3200.00 20195.30
16-Mar 13-Mar15.24 Mar-92 10000.000 151700.00 0.10 15.17 1394.08 21148.24 259.14 3931.21**16600.00 3200.00 21353.02
1.00 Apr-92 10000.000 156100.00 15.61 1394.08 21761.64 259.14 4045.24**16600.00 3200.00 21353.02
1.00 May-92 10000.000 156900.00 15.69 1394.08 21873.16 259.14 4065.97**16600.00 3200.00 21353.02
15-Jun 12-Jun15.40 Jun-92 10000.000 153500.00 0.10 15.35 1469.75 22560.71 259.14 3977.86**17600.00 3200.00 22518.35
1.00 Jul-92 10000.000 159800.00 15.98 1469.75 23486.65 259.14 4141.12**17600.00 3200.00 22518.35
1.00 Aug-92 10000.000 156500.00 15.65 1469.75 23001.63 259.14 4055.60**17600.00 3200.00 22518.35
14-Sep 11-Sep15.77 Sep-92 10000.000 157300.00 0.10 15.73 1544.13 24289.13 259.14 4076.34**18600.00 3200.00 23691.24
1.00 Oct-92 10000.000 157700.00 15.77 1544.13 24350.90 259.14 4086.70**18600.00 3200.00 23691.24
1.00 Nov-92 10000.000 163100.00 16.31 1544.13 25184.73 259.14 4226.64**18600.00 3200.00 23691.24
14-Dec 11-Dec16.28 Dec-92 10000.000 163800.00 0.13 16.38 1638.38 26836.66 259.14 4244.78**19900.00 3200.00 25225.66
1.00 Jan-93 10000.000 165100.00 16.51 1638.38 27049.65 259.14 4278.47**19900.00 3200.00 25225.66
1.00 Feb-93 10000.000 167300.00 16.73 1638.38 27410.10 259.14 4335.48**19900.00 3200.00 25225.66
08-Mar 05-Mar16.75 Mar-93 10000.000 169800.00 0.10 16.98 1709.41 29025.78 259.14 4400.27**20900.00 3200.00 26415.41
05-Apr 02-Apr16.50 Apr-93 10000.000 164600.00 0.07 0.03 16.46 1709.41 28136.89 331.68 5459.47**20900.00 4200.00 27612.27
1.00 May-93 10000.000 169000.00 16.90 1709.41 28889.03 331.68 5605.41**20900.00 4200.00 27612.27
28-Jun 25-Jun16.73 Jun-93 10000.000 168400.00 0.10 16.84 1781.38 29998.49 331.68 5585.51**21900.00 4200.00 28816.38
1.00 Jul-93 10000.000 167700.00 16.77 1781.38 29873.79 331.68 5562.29**21900.00 4200.00 28816.38
1.00 Aug-93 10000.000 174100.00 17.41 1781.38 31013.88 331.68 5774.57**21900.00 4200.00 28816.38
20-Sep 17-Sep17.15 Sep-93 10000.000 171700.00 0.10 17.17 1852.01 31799.06 331.68 5694.96**22900.00 4200.00 30027.69
1.00 Oct-93 10000.000 175200.00 17.52 1852.01 32447.27 331.68 5811.05**22900.00 4200.00 30027.69
1.00 Nov-93 10000.000 173500.00 17.35 1852.01 32132.43 331.68 5754.67**22900.00 4200.00 30027.69
13-Dec 10-Dec17.15 Dec-93 10000.000 172700.00 0.14 0.13 0.02 17.27 1951.47 33701.92 438.24 7568.47**24300.00 5700.00 33560.96
1.00 Jan-94 10000.000 178500.00 17.85 1951.47 34833.78 438.24 7822.66**24300.00 5700.00 33560.96
1.00 Feb-94 10000.000 173600.00 17.36 1951.47 33877.55 438.24 7607.92**24300.00 5700.00 33560.96
14-Mar 11-Mar17.25 Mar-94 10000.000 165000.00 0.10 16.50 2023.30 33384.38 438.24 7231.03**25300.00 5700.00 34799.93
11-Apr 08-Apr16.50 Apr-94 10000.000 166500.00 0.06 16.65 2023.30 33687.88 483.56 8051.26**25300.00 6300.00 35547.62
1.00 May-94 10000.000 169200.00 16.92 2023.30 34234.17 483.56 8181.82**25300.00 6300.00 35547.62
13-Jun 10-Jun16.92 Jun-94 10000.000 164100.00 0.10 16.41 2097.21 34415.28 483.56 7935.20**26300.00 6300.00 36798.31
1.00 Jul-94 10000.000 169500.00 16.95 2097.21 35547.78 483.56 8196.33**26300.00 6300.00 36798.31
1.00 Aug-94 10000.000 176300.00 17.63 2097.21 36973.88 483.56 8525.15**26300.00 6300.00 36798.31
19-Sep 16-Sep17.39 Sep-94 10000.000 171000.00 0.10 17.10 2169.56 37099.46 483.56 8268.86**27300.00 6300.00 38056.38
1.00 Oct-94 10000.000 174800.00 17.48 2169.56 37923.89 483.56 8452.61**27300.00 6300.00 38056.38
1.00 Nov-94 10000.000 168400.00 16.84 2169.56 36535.37 483.56 8143.13**27300.00 6300.00 38056.38
12-Dec 09-Dec16.43 Dec-94 10000.000 169100.00 0.13 0.04 0.01 16.91 2269.68 38380.20 522.07 8828.12**28600.00 6800.00 40333.95
1.00 Jan-95 10000.000 173400.00 17.34 2269.68 39356.16 522.07 9052.61**28600.00 6800.00 40333.95
1.00 Feb-95 10000.000 180200.00 18.02 2269.68 40899.54 522.07 9407.61**28600.00 6800.00 40333.95
</TABLE>
EXHIBIT 16(B)
U.S. BOND INDEX PORTFOLIO
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
Included in this exhibit is a chart showing the data used to calculate the
30-Day Yield as of the fund's fiscal year end.
The 30-DAY YIELD is calculated according to the methods prescribed in Form
N-1A Item 22(b)(ii).
30-Day Total Net Income
30-Day Yield = 2[(--------------------------------------------------) + 1)6
- - 1]
(30-Day Average Shares Outstanding)(Prior Day Price)
<TABLE>
<CAPTION>
<S> <C>
1 FIDELITY FUNDS 1 651-1 U.S. BOND INDEX SC24131 Page 1
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 04/11/95 TIME: 16:36
From 19950202 To 19950301
INCOME W/
SHARES GROSS WRITE BREAKAGE &
DATE OUTSTANDING INCOME EXPENSES NET INCOME ADJUSTMENTS OFF BREAKAGE WRITE OFF
______________________________________________________________________________________________________________________________
2 34,207,145.927 78,033.42 3,016.43 75,016.99 0.00 949.42- 5.60 74,064.07
3 34,211,031.071 77,548.00 3,014.33 74,533.67 0.00 949.42- 1.92 73,589.85
4 34,211,031.071 77,548.00 3,014.33 74,533.67 0.00 949.42- 1.76- 73,586.17
5 34,211,031.071 77,548.00 3,014.33 74,533.67 0.00 949.42- 5.44- 73,582.49
6 34,244,212.356 76,537.61 3,040.85 73,496.76 0.00 949.42- 12.66 72,541.90
7 34,271,763.762 77,153.74 3,040.92 74,112.82 0.00 949.42- 5.84 73,176.06
8 34,276,748.558 77,492.17 3,041.93 74,450.24 0.00 363.40- 13.65- 74,092.68
9 34,298,560.645 77,229.17 3,041.80 74,187.37 0.00 363.40- 0.18- 73,810.32
10 34,313,824.540 77,711.14 90,261.13 12,549.99- 87,222.33 363.40- 14.98- 74,308.76
11 34,313,824.540 77,711.14 3,038.80 74,672.34 87,222.33 363.40- 4.53 74,293.96
12 34,313,824.540 77,711.14 3,038.80 74,672.34 87,222.33 363.40- 10.27- 74,313.47
13 34,335,624.599 78,420.14 4,736.88 73,683.26 87,222.33 363.40- 3.03 73,309.59
14 34,330,122.296 77,826.24 3,033.87 74,792.37 87,222.33 363.40- 4.29 74,432.00
15 34,341,802.117 76,642.10 3,046.36 73,595.74 87,222.33 334.94- 14.03 73,265.09
16 34,362,363.732 76,215.14 3,055.90 73,159.24 87,222.33 334.94- 9.88- 72,838.33
17 34,333,659.000 77,910.30 3,062.34 74,847.96 87,222.33 334.94- 0.90- 74,503.14
18 34,333,659.000 77,910.30 3,062.34 74,847.96 87,222.33 334.94- 8.08 74,512.12
19 34,333,659.000 77,910.30 3,062.34 74,847.96 87,222.33 334.94- 17.06 74,521.10
20 34,333,659.000 77,910.30 3,062.34 74,847.96 87,222.33 334.94- 8.29- 74,530.08
21 34,312,507.084 78,290.40 3,057.72 75,232.68 87,222.33 334.94- 14.75- 74,889.45
22 34,280,571.908 77,860.84 3,053.42 74,807.42 87,222.33 334.94- 0.33 74,457.73
23 34,316,462.585 77,670.18 3,066.65 74,603.53 87,222.33 334.94- 8.09 74,268.92
24 34,359,625.437 78,607.95 3,071.07 75,536.88 87,222.33 334.94- 3.19- 75,210.03
25 34,359,625.437 78,607.95 3,071.07 75,536.88 87,222.33 334.94- 14.47- 75,198.75
26 34,359,625.437 78,607.95 3,071.07 75,536.88 87,222.33 334.94- 8.61 75,187.47
27 34,403,180.937 77,269.80 3,073.91 74,195.89 87,222.33 334.94- 5.93 73,869.56
28 34,406,610.128 77,728.90 3,088.30 74,640.60 87,222.33 334.94- 6.69- 74,311.59
1 34,612,133.403 74,420.27 3,091.50 71,328.77 89,722.33 834.94- 9.85- 72,987.14
_______________
13,764.42-
1 FIDELITY FUNDS 1 651-1 U.S. BOND INDEX SC24131 Page 2
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 04/11/95 TIME: 16:36
From 19950202 To 19950301
MTD DAILY DIST DIVIDEND -------- SHARES OUTSTANDING -------- DAILY
DATE MIL RATE MIL RATE YIELD PAID | 30-DAY TOTAL 30-DAY AVERAGE | YTM INCOME
__________________________________________________________________________________________________________________________________
2 0.002165000 0.004282000 7.86 74,058.47 1,019,201,957.745 33,973,398.592 77,048.65
3 0.002151000 0.006433000 7.81 73,587.93 1,019,690,984.015 33,989,699.467 77,280.11
4 0.002151000 0.008584000 7.74 73,587.93 1,020,017,648.601 34,000,588.287 76,185.94
5 0.002151000 0.010735000 7.74 73,587.93 1,020,353,296.679 34,011,776.556 76,185.94
6 0.002118000 0.012853000 7.62 72,529.24 1,020,722,126.042 34,024,070.868 76,185.94
7 0.002135000 0.014988000 7.70 73,170.22 1,021,118,506.811 34,037,283.560 76,418.20
8 0.002162000 0.017150000 7.80 74,106.33 1,022,482,666.424 34,049,422.214 76,430.20
9 0.002152000 0.019302000 7.76 73,810.50 1,022,896,803.525 34,096,560.118 76,363.46
10 0.002166000 0.021468000 7.83 74,323.74 1,023,262,726.904 34,108,757.563 76,667.91
11 0.002165000 0.023633000 7.85 74,289.43 1,023,565,668.577 34,118,855.619 77,213.55
12 0.002166000 0.025799000 7.85 74,323.74 1,023,891,535.210 34,129,717.840 77,213.55
13 0.002135000 0.027934000 7.74 73,306.56 1,024,239,201.902 34,141,306.730 77,213.55
14 0.002168000 0.030102000 7.85 74,427.71 1,024,581,366.291 34,152,712.210 77,115.52
15 0.002133000 0.032235000 7.69 73,251.06 1,024,916,815.532 34,163,893.851 76,079.14
16 0.002120000 0.034355000 7.62 72,848.21 1,025,262,353.710 34,175,411.790 76,008.38
17 0.002170000 0.036525000 7.79 74,504.04 1,025,567,297.249 34,185,576.575 75,848.85
18 0.002170000 0.038695000 7.80 74,504.04 1,025,845,853.894 34,194,861.796 76,048.86
19 0.002170000 0.040865000 7.80 74,504.04 1,026,119,365.012 34,203,978.834 76,048.86
20 0.002171000 0.043036000 7.80 74,538.37 1,026,392,876.130 34,213,095.871 76,048.86
21 0.002183000 0.045219000 7.84 74,904.20 1,026,645,235.332 34,221,507.844 76,048.86
22 0.002172000 0.047391000 7.80 74,457.40 1,026,874,139.147 34,229,137.972 76,117.10
23 0.002164000 0.049555000 7.74 74,260.83 1,027,092,183.398 34,236,406.113 75,149.76
24 0.002189000 0.051744000 7.83 75,213.22 1,027,361,386.151 34,245,379.538 75,386.81
25 0.002189000 0.053933000 7.83 75,213.22 1,027,627,669.078 34,254,255.636 75,587.44
26 0.002188000 0.056121000 7.83 75,178.86 1,027,918,913.610 34,263,963.787 75,587.44
27 0.002147000 0.058268000 7.68 73,863.63 1,028,253,713.642 34,275,123.788 75,587.44
28 0.002160000 0.060428000 7.69 74,318.28 1,028,591,942.865 34,286,398.096 74,250.90
1 0.002109000 0.002109000 7.51 72,996.99 1,029,154,926.945 34,305,164.232 74,250.90
_______________
2,073,666.12
1 FIDELITY FUNDS 1 651-1 U.S. BOND INDEX SC24131 Page 3
REPORT #R430MA 30 DAY DIVIDEND HISTORY RUN DATE: 04/11/95 TIME: 16:36
From 19950202 To 19950301
DAILY YTM NET DAILY YTM PAYDOWN ADJ TO 30-DAY YTM 30-DAY 30-DAY 30-DAY DAILY SEC PRIOR
DATE INCOME ADJ NET INCOME GAIN/LOSS INCOME NET INCOME MIL RATE YIELD YIELD DAY NAV
_____________________________________________________________________________________________________________________________
2 0.00 74,032.22 864.70- 31.60- 2,199,019.32 0.064760000 7.85 7.76 10.06
3 0.00 74,265.78 864.70- 31.60- 2,199,290.60 0.064736000 7.86 7.79 10.05
4 0.00 73,171.61 864.70- 31.60- 2,198,535.69 0.064682000 7.78 7.60 10.14
5 0.00 73,171.61 864.70- 31.60- 2,197,184.50 0.064622000 7.77 7.60 10.14
6 0.00 73,145.09 864.70- 31.60- 2,195,716.69 0.064558000 7.76 7.60 10.14
7 0.00 73,377.28 1,091.76- 31.60- 2,194,254.00 0.064491000 7.77 7.61 10.12
8 0.00 73,388.27 1,091.76- 31.60- 2,192,803.73 0.064424000 7.76 7.61 10.12
9 0.00 73,321.66 1,091.76- 31.60- 2,191,023.63 0.064348000 7.75 7.60 10.12
10 0.00 73,629.11 1,091.76- 31.60- 2,189,635.71 0.064219000 7.75 7.64 10.10
11 0.00 74,174.75 1,091.76- 31.60- 2,188,855.08 0.064173000 7.77 7.72 10.07
12 0.00 74,174.75 1,091.76- 31.60- 2,188,192.18 0.064134000 7.77 7.72 10.07
13 0.00 72,476.67 1,091.76- 31.60- 2,186,760.11 0.064072000 7.76 7.54 10.07
14 0.00 74,081.65 1,091.76- 31.60- 2,186,933.03 0.064055000 7.75 7.69 10.08
15 0.00 73,032.78 965.73- 31.60- 2,186,198.79 0.064012000 7.71 7.57 10.12
16 0.00 72,952.48 965.73- 31.60- 2,185,639.79 0.063975000 7.68 7.53 10.15
17 0.00 72,786.51 962.31- 31.60- 2,184,673.64 0.063925000 7.66 7.50 10.17
18 0.00 72,986.52 959.06- 31.60- 2,184,639.80 0.063905000 7.67 7.53 10.16
19 0.00 72,986.52 959.06- 31.60- 2,183,257.36 0.063848000 7.66 7.53 10.16
20 0.00 72,986.52 959.06- 31.60- 2,181,513.90 0.063780000 7.65 7.53 10.16
21 0.00 72,991.14 959.06- 31.60- 2,179,775.06 0.063712000 7.64 7.53 10.16
22 0.00 73,063.68 959.06- 31.60- 2,178,100.14 0.063647000 7.64 7.55 10.16
23 0.00 72,083.11 950.74- 31.60- 2,175,424.64 0.063555000 7.59 7.42 10.20
24 0.00 72,315.74 950.74- 31.60- 2,172,878.48 0.063467000 7.58 7.44 10.20
25 0.00 72,516.37 950.74- 31.60- 2,170,743.72 0.063388000 7.57 7.45 10.20
26 0.00 72,516.37 950.74- 31.60- 2,168,960.97 0.063319000 7.57 7.45 10.20
27 0.00 72,513.53 950.74- 31.60- 2,167,522.70 0.063260000 7.56 7.45 10.20
28 0.00 71,162.60 950.74- 31.60- 2,164,733.50 0.063158000 7.51 7.26 10.25
1 0.00 71,159.40 950.74- 31.60- 2,161,954.69 0.063056000 7.50 7.26 10.25
avg: 10.14
</TABLE>
EXHIBIT 16(C)
U.S. EQUITY INDEX PORTFOLIO
SCHEDULE FOR THE COMPUTATION OF MOVING AVERAGES
The 13-week and 39-week moving averages are long-term or weekly moving
averages. As such, they are based upon the closing adjusted NAV (presented
here) on the last business day of each week for the past 13 and 39 weeks
through the last business day of the week closest to the fund's fiscal year
end.
Adjusted Net Asset Value:
Following Day Dividend + Following Day Capital Gains
Current Day Factor = [---------------------------------------------- + 1]
(Following Day Factor)
Following Day NAV
Where:
Following Day Factor = 1.0 until the day preceding the first distribution.
Current Day NAV
Adjusted NAV = ---------------
Current Day Factor
13-week Moving Average is calculated as follows:
Sum of the end-of-week Adjusted Navs for the time period
13
39-week Moving Average is calculated as follows:
Sum of the end-of-week Adjusted NAVs for the time period
39
39 Week Moving Averages
U.S. EQUITY INDEX (UEI)
ADJUSTED
DATE FACTOR NAV
03-Jun-94 1.050655 16.24
06-Jun-94 1.050655 16.20
07-Jun-94 1.050655 16.17
08-Jun-94 1.050655 16.13
09-Jun-94 1.050655 16.17
10-Jun-94 1.044482 16.20
13-Jun-94 1.044482 16.22
14-Jun-94 1.044482 16.33
15-Jun-94 1.044482 16.27
16-Jun-94 1.044482 16.31
17-Jun-94 1.044482 16.20
20-Jun-94 1.044482 16.09
21-Jun-94 1.044482 15.95
22-Jun-94 1.044482 16.01
23-Jun-94 1.044482 15.88
24-Jun-94 1.044482 15.64
27-Jun-94 1.044482 15.82
28-Jun-94 1.044482 15.77
29-Jun-94 1.044482 15.83
30-Jun-94 1.041010 15.76
01-Jul-94 1.041010 15.83
04-Jul-94 1.041010 15.84
05-Jul-94 1.041010 15.84
06-Jul-94 1.041010 15.83
07-Jul-94 1.041010 15.92
08-Jul-94 1.041010 15.96
11-Jul-94 1.041010 15.91
12-Jul-94 1.041010 15.90
13-Jul-94 1.041010 15.93
14-Jul-94 1.041010 16.10
15-Jul-94 1.041010 16.12
18-Jul-94 1.041010 16.16
19-Jul-94 1.041010 16.12
20-Jul-94 1.041010 16.03
21-Jul-94 1.041010 16.07
22-Jul-94 1.041010 16.09
25-Jul-94 1.041010 16.13
26-Jul-94 1.041010 16.10
27-Jul-94 1.041010 16.07
28-Jul-94 1.041010 16.13
29-Jul-94 1.037556 16.34
01-Aug-94 1.037556 16.43
02-Aug-94 1.037556 16.43
03-Aug-94 1.037556 16.45
04-Aug-94 1.037556 16.35
05-Aug-94 1.037556 16.31
08-Aug-94 1.037556 16.34
09-Aug-94 1.037556 16.35
10-Aug-94 1.037556 16.43
11-Aug-94 1.037556 16.38
12-Aug-94 1.037556 16.49
15-Aug-94 1.037556 16.47
16-Aug-94 1.037556 16.61
17-Aug-94 1.037556 16.62
18-Aug-94 1.037556 16.54
19-Aug-94 1.037556 16.56
22-Aug-94 1.037556 16.52
23-Aug-94 1.037556 16.60
24-Aug-94 1.037556 16.76
25-Aug-94 1.037556 16.72
26-Aug-94 1.037556 16.93
29-Aug-94 1.037556 16.96
30-Aug-94 1.037556 17.02
31-Aug-94 1.034105 17.05
01-Sep-94 1.034105 16.97
02-Sep-94 1.034105 16.90
05-Sep-94 1.034105 16.93
06-Sep-94 1.034105 16.93
07-Sep-94 1.034105 16.89
08-Sep-94 1.034105 16.97
09-Sep-94 1.034105 16.81
12-Sep-94 1.034105 16.74
13-Sep-94 1.034105 16.78
14-Sep-94 1.034105 16.83
15-Sep-94 1.034105 17.05
16-Sep-94 1.028193 16.91
19-Sep-94 1.028193 16.91
20-Sep-94 1.028193 16.64
21-Sep-94 1.028193 16.57
22-Sep-94 1.028193 16.56
23-Sep-94 1.028193 16.51
26-Sep-94 1.028193 16.56
27-Sep-94 1.028193 16.60
28-Sep-94 1.028193 16.71
29-Sep-94 1.028193 16.61
30-Sep-94 1.024763 16.69
03-Oct-94 1.024763 16.66
04-Oct-94 1.024763 16.40
05-Oct-94 1.024763 16.36
06-Oct-94 1.024763 16.33
07-Oct-94 1.024763 16.42
10-Oct-94 1.024763 16.57
11-Oct-94 1.024763 16.81
12-Oct-94 1.024763 16.80
13-Oct-94 1.024763 16.88
14-Oct-94 1.024763 16.93
17-Oct-94 1.024763 16.92
18-Oct-94 1.024763 16.88
19-Oct-94 1.024763 16.97
20-Oct-94 1.024763 16.85
21-Oct-94 1.024763 16.77
24-Oct-94 1.024763 16.64
25-Oct-94 1.024763 16.66
26-Oct-94 1.024763 16.71
27-Oct-94 1.024763 16.82
28-Oct-94 1.024763 17.11
31-Oct-94 1.021293 17.12
01-Nov-94 1.021293 16.98
02-Nov-94 1.021293 16.91
03-Nov-94 1.021293 16.96
04-Nov-94 1.021293 16.77
07-Nov-94 1.021293 16.80
08-Nov-94 1.021293 16.90
09-Nov-94 1.021293 16.89
10-Nov-94 1.021293 16.86
11-Nov-94 1.021293 16.78
14-Nov-94 1.021293 16.92
15-Nov-94 1.021293 16.88
16-Nov-94 1.021293 16.91
17-Nov-94 1.021293 16.83
18-Nov-94 1.021293 16.76
21-Nov-94 1.021293 16.65
22-Nov-94 1.021293 16.34
23-Nov-94 1.021293 16.35
24-Nov-94 1.021293 16.35
25-Nov-94 1.021293 16.44
28-Nov-94 1.021293 16.51
29-Nov-94 1.021293 16.55
30-Nov-94 1.017835 16.54
01-Dec-94 1.017835 16.38
02-Dec-94 1.017835 16.54
05-Dec-94 1.017835 16.54
06-Dec-94 1.017835 16.54
07-Dec-94 1.017835 16.47
08-Dec-94 1.017835 16.26
09-Dec-94 1.006805 16.32
12-Dec-94 1.006805 16.42
13-Dec-94 1.006805 16.44
14-Dec-94 1.006805 16.62
15-Dec-94 1.006805 16.64
16-Dec-94 1.006805 16.76
19-Dec-94 1.006805 16.73
20-Dec-94 1.006805 16.70
21-Dec-94 1.006805 16.80
22-Dec-94 1.006805 16.80
23-Dec-94 1.006805 16.82
26-Dec-94 1.006805 16.90
27-Dec-94 1.006805 16.90
28-Dec-94 1.006805 16.85
29-Dec-94 1.006805 16.86
30-Dec-94 1.003354 16.85
02-Jan-95 1.003354 16.84
03-Jan-95 1.003354 16.84
04-Jan-95 1.003354 16.91
05-Jan-95 1.003354 16.89
06-Jan-95 1.003354 16.91
09-Jan-95 1.003354 16.91
10-Jan-95 1.003354 16.95
11-Jan-95 1.003354 16.94
12-Jan-95 1.003354 16.94
13-Jan-95 1.003354 17.11
16-Jan-95 1.003354 17.23
17-Jan-95 1.003354 17.25
18-Jan-95 1.003354 17.24
19-Jan-95 1.003354 17.14
20-Jan-95 1.003354 17.06
23-Jan-95 1.003354 17.10
24-Jan-95 1.003354 17.11
25-Jan-95 1.003354 17.17
26-Jan-95 1.003354 17.20
27-Jan-95 1.003354 17.27
30-Jan-95 1.003354 17.21
31-Jan-95 1.000000 17.34
01-Feb-95 1.000000 17.34
02-Feb-95 1.000000 17.43
03-Feb-95 1.000000 17.65
06-Feb-95 1.000000 17.75
07-Feb-95 1.000000 17.74
08-Feb-95 1.000000 17.76
09-Feb-95 1.000000 17.73
10-Feb-95 1.000000 17.77
13-Feb-95 1.000000 17.78
14-Feb-95 1.000000 17.82
15-Feb-95 1.000000 17.90
16-Feb-95 1.000000 17.92
17-Feb-95 1.000000 17.81
20-Feb-95 1.000000 17.83
21-Feb-95 1.000000 17.83
22-Feb-95 1.000000 17.92
23-Feb-95 1.000000 17.99
24-Feb-95 1.000000 18.04
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000819118
<NAME> Fidelity Institutional Trust
<SERIES>
<NUMBER> 91
<NAME> Fidelity U.S. Equity Index Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> FEB-28-1995
<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 1,917,403
<INVESTMENTS-AT-VALUE> 2,228,676
<RECEIVABLES> 12,540
<ASSETS-OTHER> 3
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,241,219
<PAYABLE-FOR-SECURITIES> 1,317
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,010
<TOTAL-LIABILITIES> 6,327
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,916,218
<SHARES-COMMON-STOCK> 124,049
<SHARES-COMMON-PRIOR> 109,011
<ACCUMULATED-NII-CURRENT> 7,791
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4,579)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 315,462
<NET-ASSETS> 2,234,892
<DIVIDEND-INCOME> 53,643
<INTEREST-INCOME> 3,721
<OTHER-INCOME> 0
<EXPENSES-NET> 5,484
<NET-INVESTMENT-INCOME> 51,880
<REALIZED-GAINS-CURRENT> 2,043
<APPREC-INCREASE-CURRENT> 95,982
<NET-CHANGE-FROM-OPS> 149,905
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 48,368
<DISTRIBUTIONS-OF-GAINS> 12,500
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55,584
<NUMBER-OF-SHARES-REDEEMED> 44,005
<SHARES-REINVESTED> 3,459
<NET-CHANGE-IN-ASSETS> 342,638
<ACCUMULATED-NII-PRIOR> 6,425
<ACCUMULATED-GAINS-PRIOR> 8,712
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 5,488
<INTEREST-EXPENSE> 2
<GROSS-EXPENSE> 11,493
<AVERAGE-NET-ASSETS> 1,958,189
<PER-SHARE-NAV-BEGIN> 17.360
<PER-SHARE-NII> .430
<PER-SHARE-GAIN-APPREC> .770
<PER-SHARE-DIVIDEND> .430
<PER-SHARE-DISTRIBUTIONS> .110
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.020
<EXPENSE-RATIO> 28
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
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<NAME> Fidelity Institutional Trust
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<NAME> Fidelity U.S. Bond Index Portfolio
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<S>
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<PERIOD-TYPE> year
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<PERIOD-END> FEB-28-1995
<INVESTMENTS-AT-COST> 368,052
<INVESTMENTS-AT-VALUE> 357,191
<RECEIVABLES> 11,799
<ASSETS-OTHER> 734
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 369,724
<PAYABLE-FOR-SECURITIES> 14,628
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 414
<TOTAL-LIABILITIES> 15,042
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 375,779
<SHARES-COMMON-STOCK> 34,612
<SHARES-COMMON-PRIOR> 26,635
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 276
<ACCUMULATED-NET-GAINS> (9,959)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (10,862)
<NET-ASSETS> 354,682
<DIVIDEND-INCOME> 7
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<REALIZED-GAINS-CURRENT> (10,706)
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