FIDELITY CONCORD STREET TRUST, N-30D, 1997-10-24

FIDELITY CONCORD STREET TRUST
N-30D, 1997-10-24

Previous: INSURED MUNICIPALS INC TR & INV QUAL TAX EX TR MULTI SER 59, 24F-2NT, 1997-10-24

Next: FIDELITY CONCORD STREET TRUST, DEFA14A, 1997-10-24

(REGISTERED TRADEMARK)
SPARTAN(registered trademark)
U.S. EQUITY INDEX
FUND

SEMIANNUAL REPORT
AUGUST 31, 1997
UEI-SANN-1097
40041
CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.

PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.

FUND TALK 6 THE MANAGER'S REVIEW OF FUND PERFORMANCE,
STRATEGY AND OUTLOOK.

INVESTMENT CHANGES 8 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S INVESTMENTS
OVER THE PAST SIX MONTHS.

INVESTMENTS 9 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.

FINANCIAL STATEMENTS 18 STATEMENTS OF ASSETS AND LIABILITIES, OPERATIONS, AND
CHANGES IN NET ASSETS, AS WELL AS FINANCIAL HIGHLIGHTS.

NOTES 22 NOTES TO THE FINANCIAL STATEMENTS.

PROXY VOTING RESULTS 25

</TABLE>

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.
THIS
REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN
THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES
ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND
NOR FIDELITY DISTRIBUTORS CORPORATION
IS A BANK.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, or for more information on any
Fidelity fund including charges and expenses, please call the
appropriate number listed below or the number provided to your
institutional or employer-sponsored retirement plan. Read the
prospectus carefully before you invest or send money.
Retirement Plan Level Accounts
Corporate Clients (800) 962-1375
"Not For Profit" Clients (800) 343-0860
Financial and Other Institutions
Nationwide (800) 843-3001
Other Investors (800) 544-6666
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
The short-term volatility that hit the stock and bond markets in the
spring re-emerged in August, and many equity and fixed-income
securities retreated from their 1997 highs. Still, the Standard &
Poor's 500 Index was up roughly 23% year-to-date through August 31,
more than twice its historical annual average. The bond markets have
posted moderate returns through the first eight months of the year,
primarily influenced by positive news on the inflation front.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $100,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain fund
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

SPARTAN U.S. EQUITY INDEX FUND 14.66% 40.31% 143.52% 347.00%

S&P 500(REGISTERED TRADEMARK) 14.78% 40.65% 146.47% 358.88%

S&P 500 INDEX OBJECTIVE FUNDS AVERAGE 14.45% 39.89% 140.98% N/A

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years, or since the fund started on February 17, 1988. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the S&P 500 index objective funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months
average represents a peer group of 69 mutual funds. These benchmarks
reflect reinvestment of dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

SPARTAN U.S. EQUITY INDEX FUND 40.31% 19.48% 16.99%

S&P 500 40.65% 19.77% 17.31%

S&P 500 INDEX OBJECTIVE FUNDS AVERAGE 39.89% 19.23% N/A

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$100,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970911 144321 S00000000000001
Spartan U.S. Equity Index S&P 500
00650 SP001
1988/02/17 100000.00 100000.00
1988/02/29 103400.00 103287.20
1988/03/31 100200.00 100095.63
1988/04/30 100900.00 101206.69
1988/05/31 101700.00 102087.19
1988/06/30 106307.66 106772.99
1988/07/31 106106.12 106367.25
1988/08/31 102478.56 102750.77
1988/09/30 106727.95 107127.95
1988/10/31 109774.42 110106.11
1988/11/30 108149.64 108531.59
1988/12/31 110097.82 110430.89
1989/01/31 118116.15 118514.43
1989/02/28 115237.77 115563.42
1989/03/31 117909.83 118256.05
1989/04/30 124121.06 124393.54
1989/05/31 129090.04 129431.48
1989/06/30 128241.53 128693.72
1989/07/31 139909.33 140314.76
1989/08/31 142513.74 143064.93
1989/09/30 141893.01 142478.36
1989/10/31 138644.36 139172.87
1989/11/30 141473.83 142011.99
1989/12/31 144725.54 145420.28
1990/01/31 134955.49 135662.58
1990/02/28 136673.30 137412.63
1990/03/31 140223.80 141054.06
1990/04/30 136761.48 137527.71
1990/05/31 150069.76 150936.66
1990/06/30 148986.99 149910.29
1990/07/31 148442.05 149430.58
1990/08/31 134818.51 135922.05
1990/09/30 128134.08 129302.65
1990/10/31 127584.62 128746.65
1990/11/30 135826.52 137063.68
1990/12/31 139466.56 140887.76
1991/01/31 145578.64 147030.47
1991/02/28 155913.61 157543.14
1991/03/31 159698.26 161355.69
1991/04/30 160033.99 161742.94
1991/05/31 166860.62 168730.24
1991/06/30 159228.10 161002.39
1991/07/31 166552.82 168505.10
1991/08/31 170496.90 172498.67
1991/09/30 167580.91 169617.95
1991/10/31 169850.12 171890.83
1991/11/30 162929.04 164963.63
1991/12/31 181531.43 183835.47
1992/01/31 178058.25 180416.13
1992/02/29 180373.71 182761.54
1992/03/31 176779.44 179197.69
1992/04/30 181906.86 184466.10
1992/05/31 182839.12 185369.98
1992/06/30 180038.56 182607.97
1992/07/31 187427.76 190076.64
1992/08/31 183557.23 186180.06
1992/09/30 185665.45 188376.99
1992/10/31 186137.58 189036.31
1992/11/30 192511.35 195482.45
1992/12/31 194881.43 197886.88
1993/01/31 196428.11 199549.13
1993/02/28 199045.56 202263.00
1993/03/31 203226.03 206530.75
1993/04/30 198196.34 201532.70
1993/05/31 203494.42 206933.78
1993/06/30 203983.98 207533.89
1993/07/31 203136.06 206703.75
1993/08/31 210888.42 214537.82
1993/09/30 209194.01 212885.88
1993/10/31 213458.30 217292.62
1993/11/30 211387.07 215228.34
1993/12/31 213970.37 217832.60
1994/01/31 221156.41 225238.91
1994/02/28 215085.45 219134.94
1994/03/31 205615.39 209580.65
1994/04/30 208239.11 212263.29
1994/05/31 211615.97 215744.41
1994/06/30 206450.46 210458.67
1994/07/31 213244.07 217361.71
1994/08/31 221799.00 226273.54
1994/09/30 216368.29 220729.84
1994/10/31 221176.47 225696.26
1994/11/30 213078.48 217476.40
1994/12/31 216308.29 220701.58
1995/01/31 221808.74 226424.37
1995/02/28 230507.12 235248.13
1995/03/31 237188.64 242190.30
1995/04/30 244138.93 249322.80
1995/05/31 253796.32 259288.24
1995/06/30 259633.20 265311.50
1995/07/31 268175.46 274109.23
1995/08/31 268822.61 274797.25
1995/09/30 280085.88 286393.69
1995/10/31 279045.64 285371.27
1995/11/30 291268.51 297899.06
1995/12/31 296728.36 303636.60
1996/01/31 306851.56 313972.39
1996/02/29 309743.91 316882.91
1996/03/31 312794.92 319934.50
1996/04/30 317149.92 324650.33
1996/05/31 325231.02 333023.06
1996/06/30 326565.57 334291.88
1996/07/31 312054.50 319522.87
1996/08/31 318577.83 326261.60
1996/09/30 336433.81 344623.61
1996/10/31 345664.00 354128.32
1996/11/30 371749.33 380896.88
1996/12/31 364185.72 373351.32
1997/01/31 386888.20 396678.31
1997/02/28 389861.15 399788.27
1997/03/31 373707.13 383360.97
1997/04/30 395904.11 406247.62
1997/05/31 420009.72 430979.97
1997/06/30 438649.43 450287.87
1997/07/31 473538.89 486117.28
1997/08/29 446995.54 458884.99
IMATRL PRASUN SHR__CHT 19970831 19970911 144324 R00000000000118
$100,000 OVER LIFE OF FUND: Let's say hypothetically that $100,000
was invested in Spartan U.S. Equity Index Fund on February 17, 1988,
when the fund started. As the chart shows, by August 31, 1997, the
value of the investment would have grown to $446,996 - a 347.00%
increase on the initial investment. For comparison, look at how the
S&P 500 did over the same period. With dividends and capital gains, if
any, reinvested, the same $100,000 investment in the S&P 500 would
have grown to $458,885 - a 358.88% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no guarantee of
how it will do tomorrow. The stock market, for
example, has a history of long-term growth and
short-term volatility. In turn, the share price and
return of a fund that invests in stocks or bonds
will vary. That means if you sell your shares
during a market downturn, you might lose
money. But if you can ride out the market's ups
and downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

AN INTERVIEW WITH
JENNIFER FARRELLY,
PORTFOLIO MANAGER OF
SPARTAN U.S. EQUITY
INDEX FUND
Q. JEN, HOW DID THE FUND PERFORM?
A. For the six months that ended August 31, 1997, the fund had a total
return of 14.66%, while the Standard & Poor's 500 Index returned
14.78%. The fund's total return is slightly lower than the index due
to expenses. In addition, the fund's return beat that of the S&P 500
index objective funds average tracked by Lipper Analytical Services,
which returned 14.45% during the same period. For the 12 months that
ended August 31, 1997, the fund returned 40.31%, the S&P 500 returned
40.65% and the S&P 500 index objective funds average returned 39.89%.
Q. HOW WOULD YOU CHARACTERIZE THE MARKET OVER THE PAST SIX MONTHS?
A. For the most part, the U.S. stock market continued to be strong.
There were a number of factors that contributed to the positive
investment environment. Most importantly, corporate earnings were
healthy, helped by a steadily growing economy that has shown no signs
of emerging inflation. Interest rates remained relatively low, helping
to sustain economic growth, keep corporate borrowing costs under
control and make investment alternatives to stocks less attractive.
Economic growth remained moderate enough to discourage the Federal
Reserve Board from aggressively raising interest rates to cool an
overheated economy and head off potential inflation. However, the
market did experience two sharp corrections during the period, one
during late March and early April, and one in August.
Q. WHAT CAUSED THE EARLIER CORRECTION?
A. In February, Fed Chairman Alan Greenspan indicated in his
semiannual Congressional testimony that the Fed was
inclined to raise short-term rates in the first half of 1997 as a
pre-emptive strike against possible inflation caused by a tight labor
market. As the Fed's March 25 Open Market Committee meeting approached
and data emerged showing the economy picking up speed, the market
experienced a sharp sell-off. Investors became convinced that the Fed
would raise rates, which it did by increasing a key short-term rate by
0.25% at its March meeting. However, the market recovered through the
beginning of August, as statistics emerged showing no significant
increase in inflation, and that the economy continued to grow, but at
a more moderate pace.
Q. AND WHAT HAPPENED IN AUGUST?
A. Valuations in the market - especially among the
large-capitalization stocks that comprise the S&P 500 - have been at
historically high levels for some time now. With high valuations come
high expectations that can exert a great deal of influence on stock
prices. That is, any small change in the overall view of the market
can lead to a large change in stock prices. In August, it seemed that
investors became less certain that the earnings growth posted by some
of the S&P 500 companies could be sustained, and we witnessed another
sell-off among large-cap issues.
Q. WHAT SECTORS WITHIN THE S&P 500 PERFORMED THE BEST OVER THE PAST
SIX MONTHS?
A. Technology was the best-performing sector within the index during
the period, spurred by demand for computers and related products.
While Microsoft had been a market leader for some time and continued
to see its share price rise, its performance was topped by Compaq,
Dell Computer and Tandem Computers during the six-month period. In
addition, many financial services stocks did well. Interest rates
remained at a relatively low level and many financial services
companies have emphasized steadier fee-based businesses that tend to
insulate them from the negative influence that Fed monetary policy
might exert. In addition, many financial services firms benefited from
the strong stock market and the positive impact of significant inflows
of capital, especially through mutual funds. Positive merger and
acquisition activity also bolstered stocks in the sector.
Q. WHICH SECTORS LAGGED DURING THE PERIOD?
A. Utilities stocks struggled in an environment of overall uncertainty
brought on by deregulation and increased competition. MCI was one
stock that struggled, as it encountered problems in its planned
acquisition by British Telecommunications. While consumer nondurables
and health stocks were some of the best performers during the S&P
500's strong rise over the past couple of years, they lagged the
market over the period. Starting from high valuations, these sectors
lagged because the healthy economic backdrop encouraged investors to
invest in companies that had better growth potential.
Q. WHAT'S YOUR OUTLOOK?
A. Dividend yields for stocks in the S&P 500 are at an all-time low,
while stock valuations are at near-record highs. While earnings growth
and earnings surprises have supported stock prices through much of the
period, August's shake-up points to a fair amount of uncertainty going
forward. Even though the large-cap stocks that make up the S&P 500
have rallied to post annual returns in the 20% to 30% range for more
than two years, the index's historical average annual return is
approximately 11%. Investors should set their expectations
accordingly.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.

JENNIFER FARRELLY ON CHANGES TO THE S&P 500:
"The S&P 500 is an index of 500 stocks chosen to be a
representation of the broader market. Periodically,
companies will be added or deleted from the index.
Usually, this is based on such events as acquisitions,
spin-offs or shifts in asset size."
Here are some of the changes to the index in the past
six months involving some well-known companies:
(solid bullet) April 2, 1997: Pacific Telesis was removed due to
its acquisition by SBC Communications, already a
component of the S&P 500.
(solid bullet) May 30, 1997: Morgan Stanley was removed due to
its merger with Dean Witter, Discover & Co.
(solid bullet) August 1, 1997: McDonnell Douglas was removed
because of its merger with S&P 500 component
Boeing Co.
(solid bullet) August 15, 1997: NYNEX was removed as it merged
with Bell Atlantic Corp., already a component of the
S&P 500.

NOTE TO SHAREHOLDERS: The fund's Board of
Trustees has recommended that shareholders approve
proposals to amend the management contract for the
fund and to adopt a sub-advisory agreement with
Bankers Trust Company for the fund. Shareholders of
the fund on September 22, 1997, are entitled to vote on
the proposals. If you received proxy materials in the
mail, you are urged to indicate voting instructions on
your proxy card(s) and return the card(s) prior to the
scheduled November 19, 1997, shareholder meeting.
FUND FACTS
GOAL: seeks a total return which corresponds
to that of the Standard and Poor's 500 Index
START DATE: February 17, 1988
SIZE: as of August 31, 1997, more than
$8.6 billion
MANAGER: Jennifer Farrelly, since 1994; manager
Spartan Market Index Fund and VIP II: Index 500
Portfolio, since 1994; joined Fidelity in 1988
(checkmark)
INVESTMENT CHANGES

TOP TEN STOCKS AS OF AUGUST 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO

GENERAL ELECTRIC CO. 2.8 2.7

MICROSOFT CORP. 2.2 1.8

EXXON CORP. 2.1 1.9

INTEL CORP. 2.1 1.8

COCA-COLA CO. (THE) 2.0 2.4

MERCK & CO., INC. 1.5 1.7

ROYAL DUTCH PETROLEUM CO. 1.5 1.5

PHILIP MORRIS COMPANIES, INC. 1.5 1.7

INTERNATIONAL BUSINESS MACHINES CORP. 1.4 1.2

PROCTER & GAMBLE CO. 1.2 1.3

TOP TEN MARKET SECTORS AS OF AUGUST 31, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO

FINANCE 15.3 14.7

TECHNOLOGY 15.2 12.8

NONDURABLES 10.3 11.2

HEALTH 10.1 10.4

ENERGY 8.8 8.1

UTILITIES 8.5 9.7

INDUSTRIAL MACHINERY & EQUIPMENT 6.0 5.1

BASIC INDUSTRIES 5.4 5.5

RETAIL & WHOLESALE 4.7 4.2

DURABLES 3.7 3.9
</TABLE>
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)

SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES

COMMON STOCKS - 96.1%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 2.1%
AEROSPACE & DEFENSE - 1.7%
AlliedSignal, Inc. 337,358 $ 27,853
Boeing Co. 1,184,881 64,502
Lockheed Martin Corp. 230,166 23,866
Textron, Inc. 196,766 12,261
United Technologies Corp. 282,606 22,061
150,543
DEFENSE ELECTRONICS - 0.3%
Northrop Grumman Corp. 69,269 8,109
Raytheon Co. 281,652 15,491
23,600
SHIP BUILDING & REPAIR - 0.1%
General Dynamics Corp. 74,379 5,922
TOTAL AEROSPACE & DEFENSE 180,065
BASIC INDUSTRIES - 5.4%
CHEMICALS & PLASTICS - 2.8%
Air Products & Chemicals, Inc. 130,843 10,672
Avery Dennison Corp. 123,302 5,063
Dow Chemical Co. 278,280 24,628
du Pont (E.I.) de Nemours & Co. 1,345,980 83,870
Eastman Chemical Co. 93,371 5,585
Engelhard Corp. 171,849 3,587
FMC Corp. (a) 44,470 3,694
Goodrich (B.F.) Co. 64,190 2,704
Great Lakes Chemical Corp. 71,504 3,325
Hercules, Inc. 119,737 6,189
Monsanto Co. 705,410 30,994
Morton International, Inc. 167,070 5,555
Nalco Chemical Co. 74,957 2,998
PPG Industries, Inc. 214,907 13,539
Praxair, Inc. 188,181 10,056
Raychem Corp. 51,968 4,836
Rohm & Haas Co. 74,131 7,103
Sigma Aldrich Corp. 119,264 3,891
Union Carbide Corp. 149,529 7,673
W.R. Grace & Co. 86,680 5,965
241,927
IRON & STEEL - 0.3%
Aeroquip Vickers, Inc. 33,254 1,858
Allegheny Teledyne, Inc. 209,769 6,477
Armco, Inc. (a) 127,605 758
Bethlehem Steel Corp. (a) 133,709 1,604
Inland Steel Industries, Inc. 58,387 1,230
Nucor Corp. 104,727 5,937

SHARES VALUE (NOTE 1)
(000S)
USX-U.S. Steel Group 101,971 $ 3,580
Worthington Industries, Inc. 115,103 2,136
23,580
METALS & MINING - 0.7%
Alcan Aluminium Ltd. 270,674 9,460
Aluminum Co. of America 207,066 17,031
ASARCO, Inc. 51,143 1,573
Commscope, Inc. 57,900 999
Cyprus Amax Minerals Co. 111,211 2,808
Freeport-McMoRan Copper & Gold, Inc.
Class B 238,986 6,691
Inco Ltd. 198,317 5,365
Phelps Dodge Corp. 73,910 5,945
Reynolds Metals Co. 87,239 6,167
56,039
PACKAGING & CONTAINERS - 0.2%
Ball Corp. 36,138 1,188
Bemis Co., Inc. 63,220 2,778
Crown Cork & Seal Co., Inc. 153,190 7,793
Owens-Illinois, Inc. 166,600 5,800
Tupperware Corp. 73,357 2,462
20,021
PAPER & FOREST PRODUCTS - 1.4%
Boise Cascade Corp. 57,777 2,286
Champion International Corp. 113,953 6,744
Fort James Corp. 223,919 9,405
Georgia-Pacific Corp. 109,177 9,962
International Paper Co. 358,627 18,917
Kimberly-Clark Corp. 667,240 31,652
Louisiana-Pacific Corp. 130,212 2,881
Mead Corp. 62,318 4,421
Potlatch Corp. 34,527 1,612
Stone Container Corp. 118,480 2,042
Temple-Inland, Inc. 66,103 4,263
Union Camp Corp. 82,589 4,897
Westvaco Corp. 121,647 4,121
Weyerhaeuser Co. 236,479 13,657
Willamette Industries, Inc. 65,902 5,255
122,115
TOTAL BASIC INDUSTRIES 463,682
CONSTRUCTION & REAL ESTATE - 0.4%
BUILDING MATERIALS - 0.3%
Armstrong World Industries, Inc. 48,658 3,330
Crane Co. 54,705 2,414
Masco Corp. 192,329 8,547
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Owens-Corning 63,556 $ 2,578
Sherwin-Williams Co. 205,544 5,639
22,508
CONSTRUCTION - 0.1%
Centex Corp. 34,538 1,878
Fleetwood Enterprises, Inc. 42,468 1,322
Fluor Corp. 100,198 5,623
Kaufman & Broad Home Corp. 46,254 925
Pulte Corp. 25,028 917
10,665
ENGINEERING - 0.0%
EG&G, Inc. 54,942 1,167
Foster Wheeler Corp. 48,539 2,218
3,385
TOTAL CONSTRUCTION & REAL ESTATE 36,558
DURABLES - 3.7%
AUTOS, TIRES, & ACCESSORIES - 2.3%
AutoZone, Inc. (a) 179,800 5,079
Chrysler Corp. 820,140 28,806
Cooper Tire & Rubber Co. 93,843 2,358
Dana Corp. 123,118 5,671
Echlin, Inc. 74,511 2,762
Ford Motor Co. 1,418,441 60,992
General Motors Corp. 869,461 54,559
Genuine Parts Co. 214,634 6,626
Goodyear Tire & Rubber Co. 185,891 11,456
ITT Industries, Inc. (a) 141,089 4,444
NACCO Industries, Inc. Class A 9,904 854
Navistar International Corp. (a) 87,373 2,167
PACCAR, Inc. 92,798 4,396
Pep Boys-Manny, Moe & Jack 72,548 1,923
TRW, Inc. 148,952 7,764
199,857
CONSUMER DURABLES - 0.7%
Corning, Inc. 273,676 14,471
Minnesota Mining & Manufacturing Co. 496,277 44,603
Stanley Works 90,786 3,864
62,938
CONSUMER ELECTRONICS - 0.1%
Maytag Co. 116,429 3,194
Whirlpool Corp. 88,733 5,080
8,274

SHARES VALUE (NOTE 1)
(000S)
HOME FURNISHINGS - 0.2%
Johnson Controls, Inc. 99,840 $ 4,761
Newell Co. 189,730 7,471
12,232
TEXTILES & APPAREL - 0.4%
Fruit of the Loom, Inc. Class A (a) 90,960 2,433
Liz Claiborne, Inc. 84,182 3,751
NIKE, Inc. Class B 344,248 18,374
Reebok International Ltd. 63,170 2,776
Russell Corp. 43,542 1,241
Springs Industries, Inc. Class A 24,059 1,131
Stride Rite Corp. 58,248 692
VF Corp. 76,131 6,728
37,126
TOTAL DURABLES 320,427
ENERGY - 8.8%
ENERGY SERVICES - 1.0%
Baker Hughes, Inc. 196,423 8,323
Dresser Industries, Inc. 210,060 8,770
Halliburton Co. 301,644 14,403
Helmerich & Payne, Inc. 29,824 2,107
McDermott International, Inc. 65,527 2,113
Rowan Companies, Inc. (a) 102,253 3,055
Schlumberger Ltd. 588,630 44,846
Western Atlas, Inc. (a) 64,115 5,081
88,698
OIL & GAS - 7.8%
Amerada Hess Corp. 110,731 6,436
Amoco Corp. 589,299 55,726
Anadarko Petroleum Corp. 67,600 4,964
Apache Corp. 100,600 3,993
Ashland, Inc. 88,618 4,442
Atlantic Richfield Co. 384,042 28,803
Burlington Resources, Inc. 139,892 7,082
Chevron Corp. 779,094 60,331
Coastal Corp. (The) 126,286 7,293
Enserch Exploration, Inc. 125,396 1,129
Exxon Corp. 2,960,546 181,149
Kerr-McGee Corp. 57,067 3,545
Louisiana Land & Exploration Co. 40,761 3,121
Mobil Corp. 938,256 68,258
Monterey Resources, Inc. 52,237 1,077
Occidental Petroleum Corp. 393,278 9,218
Oryx Energy Co. (a) 125,709 3,323
Pennzoil Co. 55,903 4,315
Phillips Petroleum Co. 314,411 14,954
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Royal Dutch Petroleum Co. 2,556,748 $ 129,755
Santa Fe Energy Resources, Inc. 118,432 1,310
Sun Co., Inc. 86,973 3,381
Texaco, Inc. 314,291 36,222
USX-Marathon Group 343,105 11,173
Union Pacific Resources Group, Inc. 302,644 7,566
Unocal Corp. 299,168 11,686
670,252
TOTAL ENERGY 758,950
FINANCE - 15.3%
BANKS - 7.3%
Banc One Corp. 685,353 36,752
Bank of New York Co., Inc. 461,466 20,593
BankBoston Corp. 175,087 14,554
BankAmerica Corp. 845,556 55,648
Bankers Trust New York Corp. 92,596 9,607
Barnett Banks, Inc. 237,170 16,157
Chase Manhattan Corp. 513,973 57,147
Citicorp 552,433 70,504
Comerica, Inc. 125,900 8,915
CoreStates Financial Corp. 246,355 15,151
Fifth Third Bancorp 189,450 11,083
First Union Corp. 682,402 32,798
Fleet Financial Group, Inc. 254,470 16,398
Huntington Bancshares, Inc. 190,200 6,158
KeyCorp. 266,331 16,146
Mellon Bank Corp. 308,554 14,849
Morgan (J.P.) & Co., Inc. 219,779 23,571
National City Corp. 265,026 14,974
NationsBank Corp. 870,518 51,687
Norwest Corp. 445,577 25,593
PNC Financial Corp. 383,578 16,590
Republic New York Corp. 64,725 6,929
State Street Corp. 198,900 9,920
SunTrust Banks, Inc. 262,950 16,435
U.S. Bancorp 291,835 25,554
Wachovia Corp. 192,686 11,995
Wells Fargo & Co. 106,731 27,136
632,844
CREDIT & OTHER FINANCE - 1.4%
American Express Co. 563,903 43,843
Beneficial Corp. 64,050 4,584

SHARES VALUE (NOTE 1)
(000S)
Countrywide Credit Industries, Inc. 124,500 $ 4,194
First Chicago NBD Corp. 372,380 26,718
Green Tree Financial Corp. 161,900 7,114
Household International, Inc. 126,940 14,082
MBNA Corp. 398,430 15,315
Transamerica Corp. 78,917 7,778
123,628
FEDERAL SPONSORED CREDIT - 1.0%
Federal Home Loan
Mortgage Corporation 828,812 26,988
Federal National
Mortgage Association 1,265,140 55,667
82,655
INSURANCE - 4.4%
Aetna, Inc. 179,913 17,170
Allstate Corp. 525,660 38,406
American General Corp. 287,948 13,875
American International Group, Inc. 839,667 79,244
Aon Corp. 198,400 10,106
CIGNA Corp. 88,364 16,204
Chubb Corp. (The) 208,552 13,947
Conseco, Inc. 218,500 9,396
General Re Corp. 96,454 18,700
Hartford Financial Services Group, Inc. 140,489 11,204
Jefferson Pilot Corp. 84,319 5,865
Lincoln National Corp. 123,139 8,243
Loews Corp. 137,160 13,982
MBIA, Inc. 38,800 4,394
MGIC Investment Corp. 140,900 7,089
Marsh & McLennan Companies, Inc. 197,646 13,489
Progressive Corp. 86,400 8,554
Providian Financial Corp. 111,707 4,161
SAFECO Corp. 150,506 7,394
St. Paul Companies, Inc. (The) 99,752 7,319
SunAmerica, Inc. 233,400 8,383
Torchmark Corp. 166,712 6,283
Travelers Group, Inc. (The) 764,893 48,571
UNUM Corp. 166,452 6,866
USF&G Corp. (a) 131,521 2,885
381,730
SAVINGS & LOANS - 0.3%
Ahmanson (H.F.) & Co. 119,837 6,082
Golden West Financial Corp. 68,314 5,623
Washington Mutual, Inc. 298,267 17,859
29,564
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.9%
Merrill Lynch & Co., Inc. 395,020 $ 24,294
Morgan Stanley Dean Witter
Discover and Co. 683,172 32,878
Salomon, Inc. 128,993 7,723
Schwab (Charles) Corp. 208,800 8,861
73,756
TOTAL FINANCE 1,324,177
HEALTH - 10.1%
DRUGS & PHARMACEUTICALS - 6.4%
Allergan, Inc. 78,003 2,525
ALZA Corp. Class A (a) 101,306 2,938
American Home Products Corp. 767,430 55,255
Amgen, Inc. 315,874 15,656
Bristol-Myers Squibb Co. 1,192,116 90,600
Lilly (Eli) & Co. 662,332 69,297
Merck & Co., Inc. 1,439,423 132,157
Pharmacia & Upjohn, Inc. 605,135 20,612
Pfizer, Inc. 1,539,732 85,262
Schering-Plough Corp. 872,632 41,886
Warner-Lambert Co. 323,430 41,096
557,284
MEDICAL EQUIPMENT & SUPPLIES - 2.9%
Abbott Laboratories 922,252 55,277
Bard (C.R.), Inc. 68,101 2,350
Bausch & Lomb, Inc. 66,322 2,723
Baxter International, Inc. 331,346 17,623
Becton, Dickinson & Co. 145,510 6,975
Biomet, Inc. 132,732 2,754
Boston Scientific Corp. (a) 232,249 16,374
Cardinal Health, Inc. 129,500 8,579
Guidant Corp. 88,300 7,754
Johnson & Johnson 1,588,092 90,025
Mallinckrodt, Inc. 87,422 3,180
Medtronic, Inc. 284,024 25,669
Millipore Corp. 51,957 2,572
Pall Corp. 150,699 3,570
St. Jude Medical, Inc. (a) 109,072 4,152
U.S. Surgical Corp. 87,219 2,873
252,450
MEDICAL FACILITIES MANAGEMENT - 0.8%
Beverly Enterprises, Inc. (a) 118,139 1,927
Columbia/HCA Healthcare Corp. 796,322 25,134
HEALTHSOUTH Corp. (a) 408,900 10,197

SHARES VALUE (NOTE 1)
(000S)
Humana, Inc. (a) 194,300 $ 4,578
Manor Care, Inc. 75,639 2,335
Tenet Healthcare Corp. (a) 359,368 9,793
United HealthCare Corp. 221,994 10,795
64,759
TOTAL HEALTH 874,493
HOLDING COMPANIES - 0.2%
CINergy Corp. 187,927 6,213
Norfolk Southern Corp. 149,481 14,649
20,862
INDUSTRIAL MACHINERY & EQUIPMENT - 6.0%
ELECTRICAL EQUIPMENT - 4.0%
Eaton Corp. 92,122 8,297
Emerson Electric Co. 530,890 29,034
General Electric Co. 3,911,238 244,450
General Semiconductor, Inc. 43,425 613
General Signal Corp. 59,896 2,598
Grainger (W.W.), Inc. 61,705 5,480
Harris Corp. 47,554 4,143
Honeywell, Inc. 151,470 10,470
Nextlevel Systems, Inc. 174,600 3,503
Rockwell International Corp. 254,148 15,249
Scientific-Atlanta, Inc. 92,378 2,009
Westinghouse Electric Corp. 757,655 19,509
345,355
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
Black & Decker Corp. 112,480 4,309
Briggs & Stratton Corp. 30,305 1,464
Case Corp. 88,500 5,935
Caterpillar, Inc. 450,384 26,150
Cincinnati Milacron, Inc. 47,333 1,219
Cooper Industries, Inc. 141,222 7,529
Cummins Engine Co., Inc. 45,610 3,509
Deere & Co. 304,437 17,048
Dover Corp. 133,804 9,241
Harnischfeger Industries, Inc. 58,802 2,360
Illinois Tool Works, Inc. 297,198 14,377
Ingersoll-Rand Co. 129,312 7,775
Parker-Hannifin Corp. 88,878 5,716
Tenneco, Inc. 204,087 9,911
Timken Co. 74,566 2,792
Tyco International Ltd. 290,986 22,824
142,159
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.3%
Browning-Ferris Industries, Inc. 253,322 $ 8,850
Safety Kleen Corp. 69,555 1,404
Waste Management, Inc. 540,052 17,282
27,536
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 515,050
MEDIA & LEISURE - 3.5%
BROADCASTING - 0.2%
Clear Channel Communications, Inc. 104,200 7,079
TCI Group Class A 791,925 13,859
20,938
ENTERTAINMENT - 1.3%
Disney (Walt) Co. 804,997 61,833
King World Productions, Inc. 44,488 1,768
Time Warner, Inc. 666,456 34,323
Viacom, Inc. Class B (non-vtg.) (a) 420,379 12,454
110,378
LEISURE DURABLES & TOYS - 0.2%
Brunswick Corp. 118,178 3,604
Hasbro, Inc. 152,763 4,106
Mattel, Inc. 347,716 11,627
19,337
LODGING & GAMING - 0.5%
HFS, Inc. (a) 188,500 10,497
Harrah's Entertainment, Inc. (a) 122,510 2,749
Hilton Hotels Corp. 297,619 9,133
ITT Corp. 138,889 8,724
Marriott International, Inc. 150,865 10,042
Mirage Resorts, Inc. 33,700 903
42,048
PUBLISHING - 0.8%
American Greetings Corp. Class A 89,521 3,111
Cognizant Corp. 199,601 8,383
Dow Jones & Co., Inc. 114,057 4,883
Gannett Co., Inc. 168,711 16,439
Knight-Ridder, Inc. 108,566 5,496
McGraw-Hill, Inc. 119,130 7,304
Meredith Corp. 63,828 1,915
New York Times Co. (The) Class A 114,000 5,387
Times Mirror Co. Class A 113,920 5,774
Tribune Co. 146,284 7,232
65,924

SHARES VALUE (NOTE 1)
(000S)
RESTAURANTS - 0.5%
Darden Restaurants, Inc. 182,334 $ 1,835
McDonald's Corp. 822,412 38,910
Wendy's International, Inc. 156,607 3,768
44,513
TOTAL MEDIA & LEISURE 303,138
NONDURABLES - 10.3%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 98,061 8,403
BEVERAGES - 3.3%
Anheuser-Busch Companies, Inc. 591,648 25,219
Brown-Forman Corp. Class B 82,322 3,972
Coca-Cola Co. (The) 2,955,800 169,405
Coors (Adolph) Co. Class B 44,581 1,644
PepsiCo, Inc. 1,827,132 65,776
Seagram Co. Ltd. 442,028 15,448
Whitman Corp. 121,102 2,967
284,431
FOODS - 2.3%
Archer-Daniels-Midland Co. 667,742 14,440
CPC International, Inc. 171,015 15,242
Campbell Soup Co. 554,376 25,709
ConAgra, Inc. 284,609 18,304
General Mills, Inc. 192,234 12,327
Heinz (H.J.) Co. 438,408 18,249
Hershey Foods Corp. 182,246 9,727
Kellogg Co. 495,386 22,168
Quaker Oats Co. 162,720 7,648
Ralston Purina Co. 126,774 11,410
Sara Lee Corp. 572,773 23,054
Sysco Corp. 207,998 7,384
Wrigley (Wm.) Jr. Co. 138,454 10,038
195,700
HOUSEHOLD PRODUCTS - 3.0%
Alberto Culver Co. Class B 66,856 1,951
Avon Products, Inc. 157,472 10,088
Clorox Co. 61,649 8,091
Colgate-Palmolive Co. 352,020 22,089
Ecolab, Inc. 77,427 3,489
Gillette Co. 664,282 55,011
International Flavors & Fragrances, Inc. 130,167 6,655
Procter & Gamble Co. 807,551 107,455
Rubbermaid, Inc. 178,619 4,466
Unilever NV ADR 190,847 38,408
257,703
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
TOBACCO - 1.6%
Fortune Brands, Inc. 205,081 $ 7,050
Philip Morris Companies, Inc. 2,895,903 126,333
UST, Inc. 219,067 6,326
139,709
TOTAL NONDURABLES 885,946
PRECIOUS METALS - 0.3%
Barrick Gold Corp. 444,528 10,058
Battle Mountain Gold Co. 273,800 1,557
Echo Bay Mines Ltd. 165,988 837
Homestake Mining Co. 175,164 2,453
Newmont Mining Corp. 186,072 7,873
Placer Dome, Inc. 285,446 4,772
27,550
RETAIL & WHOLESALE - 4.7%
APPAREL STORES - 0.3%
Charming Shoppes, Inc. (a) 125,809 759
Gap, Inc. 326,324 14,501
Limited, Inc. (The) 323,179 7,352
TJX Companies, Inc. 185,366 5,098
27,710
DRUG STORES - 0.4%
CVS Corp. 199,281 11,234
Long Drug Stores, Inc. 46,452 1,176
Rite Aid Corp. 146,492 7,334
Walgreen Co. 586,796 15,807
35,551
GENERAL MERCHANDISE STORES - 2.5%
Costco Companies, Inc. (a) 251,853 9,082
Dayton Hudson Corp. 258,565 14,738
Dillards, Inc. Class A 135,294 5,412
Federated Department Stores, Inc. (a) 248,000 10,416
Harcourt General, Inc. 84,230 4,006
K mart Corp. (a) 578,194 8,022
May Department Stores Co. (The) 282,646 15,210
Mercantile Stores Co., Inc. 43,808 2,735
Nordstrom, Inc. 94,990 5,557
Penney (J.C.) Co., Inc. 294,456 17,667
Sears, Roebuck & Co. 467,288 26,519
Wal-Mart Stores, Inc. 2,701,201 95,893
Woolworth Corp. (a) 159,965 3,580
218,837

SHARES VALUE (NOTE 1)
(000S)
GROCERY STORES - 0.5%
Albertson's, Inc. 298,913 $ 10,275
American Stores Co. 334,430 7,922
Fleming Companies, Inc. 45,027 850
Giant Food, Inc. Class A 71,453 2,322
Great Atlantic & Pacific Tea Co., Inc. 45,630 1,143
Kroger Co. (The) (a) 302,866 9,124
Supervalu, Inc. 76,711 3,011
Winn-Dixie Stores, Inc. 177,552 5,982
40,629
RETAIL & WHOLESALE, MISCELLANEOUS - 1.0%
Circuit City Stores, Inc. -
Circuit City Group 116,900 4,165
Comcast Corp. Class A special 417,619 9,788
Home Depot, Inc. 868,563 40,985
IKON Office Solutions, Inc. 158,122 4,111
Lowe's Companies, Inc. 206,368 7,133
Tandy Corp. 64,844 4,304
Toys "R" Us, Inc. (a) 340,728 11,777
82,263
TOTAL RETAIL & WHOLESALE 404,990
SERVICES - 0.5%
ADVERTISING - 0.1%
Interpublic Group of Companies, Inc. 146,912 7,162
LEASING & RENTAL - 0.0%
Ryder Systems, Inc. 91,150 3,253
PRINTING - 0.1%
Deluxe Corp. 98,115 3,232
Donnelley (R.R.) & Sons Co. 174,554 6,796
Harland (John H.) Co. 36,928 732
Moore Corporation Ltd. 104,962 2,110
12,870
SERVICES - 0.3%
Block (H&R), Inc. 124,081 4,870
Dun & Bradstreet Corp. 204,001 5,712
Jostens, Inc. 46,297 1,117
National Service Industries, Inc. 53,913 2,385
Service Corp. International 285,552 9,138
23,222
TOTAL SERVICES 46,507
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 15.2%
COMMUNICATIONS EQUIPMENT - 2.3%
Andrew Corp. (a) 108,717 $ 2,705
Cabletron Systems, Inc. (a) 185,862 5,622
Cisco Systems, Inc. (a) 791,182 59,635
DSC Communications Corp. (a) 139,907 4,075
Lucent Technologies, Inc. 762,932 59,413
Northern Telecom Ltd. 310,091 30,780
Tellabs, Inc. (a) 215,402 12,857
3Com Corp. (a) 395,900 19,770
194,857
COMPUTER SERVICES & SOFTWARE - 4.0%
Adobe Systems, Inc. 85,300 3,359
Autodesk, Inc. 56,855 2,487
Automatic Data Processing, Inc. 349,094 15,908
CUC International, Inc. (a) 487,040 11,446
Ceridian Corp. (a) 95,732 3,309
Choice Point, Inc. 17,910 636
Computer Associates International, Inc. 433,041 28,960
Computer Sciences Corp. (a) 91,149 6,779
Equifax, Inc. 180,100 5,302
First Data Corp. 534,958 21,969
Microsoft Corp. (a) 1,428,774 188,866
Netscape Communications Corp. 848 34
Novell, Inc. (a) 413,473 3,876
Oracle Corp. (a) 1,168,765 44,559
Parametric Technology Corp. (a) 152,000 7,059
Shared Medical Systems Corp. 29,752 1,459
346,008
COMPUTERS & OFFICE EQUIPMENT - 4.7%
Amdahl Corp. (a) 146,223 1,801
Apple Computer, Inc. (a) 150,553 3,275
Bay Networks, Inc. (a) 237,200 8,391
Compaq Computer Corp. (a) 818,555 53,615
Data General Corp. (a) 48,243 1,734
Dell Computer Corp. (a) 399,600 32,792
Digital Equipment Corp. (a) 182,302 7,839
EMC Corp. (a) 293,600 15,065
Hewlett-Packard Co. 1,211,566 74,284
Intergraph Corp. (a) 56,651 563
International Business Machines Corp. 1,184,124 119,449
Pitney Bowes, Inc. 173,677 13,264
Seagate Technology (a) 292,500 11,170
Silicon Graphics, Inc. (a) 211,070 5,791
Sun Microsystems, Inc. (a) 439,760 21,108
Tandem Computers, Inc. (a) 138,190 4,699

SHARES VALUE (NOTE 1)
(000S)
Unisys Corp. (a) 208,453 $ 2,358
Xerox Corp. 385,844 29,131
406,329
ELECTRONIC INSTRUMENTS - 0.4%
Applied Materials, Inc. (a) 216,026 20,387
Perkin-Elmer Corp. 52,158 3,860
Snap-On Tools Corp. 72,716 3,054
Tektronix, Inc. 39,595 2,200
Thermo Electron Corp. (a) 179,000 7,205
36,706
ELECTRONICS - 3.5%
Advanced Micro Devices, Inc. (a) 167,202 6,260
AMP, Inc. 261,787 13,089
Intel Corp. 1,952,998 179,920
LSI Logic Corp. (a) 168,800 5,433
Micron Technology, Inc. (a) 250,625 11,169
Motorola, Inc. 708,506 51,987
National Semiconductor Corp. (a) 168,520 5,772
Texas Instruments, Inc. 227,772 25,881
Thomas & Betts Corp. 64,458 3,610
303,121
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 392,362 25,650
Polaroid Corp. 53,639 2,833
28,483
TOTAL TECHNOLOGY 1,315,504
TRANSPORTATION - 1.1%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 108,804 10,962
Delta Air Lines, Inc. 87,530 7,571
Southwest Airlines Co. 173,481 4,857
US Airways Group, Inc. (a) 93,826 3,202
26,592
RAILROADS - 0.6%
Burlington Northern Santa Fe Corp. 183,842 16,856
CSX Corp. 259,590 14,845
Union Pacific Corp. 294,322 19,113
50,814
TRUCKING & FREIGHT - 0.2%
Caliber System, Inc. 46,432 1,939
Federal Express Corp. (a) 136,444 9,065
Laidlaw, Inc. 374,566 5,479
16,483
TOTAL TRANSPORTATION 93,889
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 8.5%
CELLULAR - 0.2%
AirTouch Communications, Inc. (a) 599,772 $ 20,280
ELECTRIC UTILITY - 2.2%
American Electric Power Co., Inc. 225,046 9,832
Baltimore Gas & Electric Co. 176,099 4,755
Carolina Power & Light Co. 180,089 6,078
Central & South West Corp. 252,934 5,233
Consolidated Edison Co. of
New York, Inc. 280,269 8,583
DTE Energy Co. 173,056 5,127
Dominion Resources, Inc. 220,031 7,921
Duke Energy Corp. 428,536 20,757
Edison International 489,182 11,802
Entergy Corp. 283,390 7,032
FPL Group, Inc. 217,477 10,113
GPU, Inc. 143,743 4,833
Houston Industries, Inc. 299,011 6,055
Niagara Mohawk Power Corp. (a) 165,454 1,479
Northern States Power Co. 82,363 3,964
Ohio Edison Co. 181,873 4,001
PECO Energy Co. 265,258 6,316
PG&E Corp. 487,738 11,309
PP&L Resources, Inc. 195,800 4,295
PacifiCorp. 352,601 7,316
Public Service Enterprise Group, Inc. 276,496 6,861
Southern Co. 812,642 17,116
Texas Utilities Co. 286,859 10,004
Unicom Corp. 257,900 6,093
Union Electric Co. 121,648 4,524
191,399
GAS - 0.6%
Columbia Gas System, Inc. (The) 65,855 4,346
Consolidated Natural Gas Co. 113,318 6,693
Eastern Enterprises Co. 24,260 866
Enron Corp. 364,405 14,052
NICOR, Inc. 58,353 2,119
ONEOK, Inc. 33,557 1,086
Pacific Enterprises 99,376 3,273
Peoples Energy Corp. 41,609 1,568
Sonat, Inc. 102,720 5,117
Williams Companies, Inc. 188,910 8,796
47,916

SHARES VALUE (NOTE 1)
(000S)
TELEPHONE SERVICES - 5.5%
AT&T Corp. 1,937,466 $ 75,557
ALLTEL Corp. 222,488 7,036
Ameritech Corp. 654,599 41,035
Bell Atlantic Corp. 925,071 66,952
BellSouth Corp. 1,183,442 52,071
Frontier Corp. 195,700 4,318
GTE Corp. 1,138,665 50,742
MCI Communications Corp. 819,124 23,345
SBC Communications, Inc. 1,087,693 59,144
Sprint Corp. 513,376 24,129
U.S. West Communications Group (a) 571,479 20,466
U.S. West Media Group 723,079 14,462
WorldCom, Inc. (a) 1,064,600 31,872
471,129
TOTAL UTILITIES 730,724
TOTAL COMMON STOCKS
(Cost $5,337,130) 8,302,512
U.S. TREASURY OBLIGATIONS (C) - 0.2%
PRINCIPAL
AMOUNT (000S)
U.S. Treasury Bills, yields at dates of
purchase 5.20% to 5.30%, 1/8/98
(Cost $19,881) $ 20,250 19,881
CASH EQUIVALENTS - 3.7%
SHARES
Taxable Central Cash Fund (b)
(Cost $319,820) $ 319,819,588 319,820
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $5,676,831) $ 8,642,213
FUTURES CONTRACTS
DOLLAR AMOUNTS
IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
753 S&P 500 Stock
Index Contracts Sept. 97 $ 340,017 $ (13,047)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN
SECURITIES - 3.9%
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.65%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
3. A portion of the security was pledged to cover margin requirements
for futures contracts. At the period end, the value of securities
pledged amounted to $1,267,000.
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $5,680,872,000. Net unrealized appreciation
aggregated $2,961,341,000, of which $3,066,231,000 related to
appreciated investment securities and $104,890,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) AUGUST 31, 1997 (UNAUDITED)

ASSETS

INVESTMENT IN SECURITIES, AT VALUE (COST $5,676,831) - SEE ACCOMPANYING SCHEDULE $ 8,642,213

RECEIVABLE FOR FUND SHARES SOLD 25,707

DIVIDENDS RECEIVABLE 14,936

INTEREST RECEIVABLE 1,480

RECEIVABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 1,267

OTHER RECEIVABLES 84

RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 146

TOTAL ASSETS 8,685,833

LIABILITIES

PAYABLE FOR INVESTMENTS PURCHASED $ 7,079

PAYABLE FOR FUND SHARES REDEEMED 13,697

OTHER PAYABLES AND ACCRUED EXPENSES 2,035

COLLATERAL ON SECURITIES LOANED, AT VALUE 10,279

TOTAL LIABILITIES 33,090

NET ASSETS $ 8,652,743

NET ASSETS CONSIST OF:

PAID IN CAPITAL $ 5,614,496

UNDISTRIBUTED NET INVESTMENT INCOME 23,585

ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS 62,327

NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,952,335

NET ASSETS, FOR 264,846 SHARES OUTSTANDING $ 8,652,743

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $32.67
PER SHARE ($8,652,743 (DIVIDED BY) 264,846 SHARES)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED AUGUST 31, 1997 (UNAUDITED)

INVESTMENT INCOME $ 64,890
DIVIDENDS

INTEREST (INCLUDING INCOME ON SECURITIES LOANED OF $175) 9,306

TOTAL INCOME 74,196

EXPENSES

MANAGEMENT FEE $ 10,565

TRANSFER AGENT FEES 8,131

ACCOUNTING AND SECURITY LENDING FEES 412

NON-INTERESTED TRUSTEES' COMPENSATION 17

CUSTODIAN FEES AND EXPENSES 67

REGISTRATION FEES 409

AUDIT 34

LEGAL 70

REPORTS TO SHAREHOLDERS 117

TOTAL EXPENSES BEFORE REDUCTIONS 19,822

EXPENSE REDUCTIONS (12,288) 7,534

NET INVESTMENT INCOME 66,662

REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:

INVESTMENT SECURITIES 16,152

FUTURES CONTRACTS 46,671 62,823

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:

INVESTMENT SECURITIES 864,836

FUTURES CONTRACTS (9,402) 855,434

NET GAIN (LOSS) 918,257

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 984,919

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1997 FEBRUARY 28,
(UNAUDITED) 1997

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS $ 66,662 $ 100,614
NET INVESTMENT INCOME

NET REALIZED GAIN (LOSS) 62,823 104,584

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 855,434 1,006,122

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 984,919 1,211,320

DISTRIBUTIONS TO SHAREHOLDERS (62,967) (95,107)
FROM NET INVESTMENT INCOME

FROM NET REALIZED GAIN (22,778) (39,757)

TOTAL DISTRIBUTIONS (85,745) (134,864)

SHARE TRANSACTIONS 2,683,879 2,905,735
NET PROCEEDS FROM SALES OF SHARES

REINVESTMENT OF DISTRIBUTIONS 83,895 131,170

COST OF SHARES REDEEMED (1,501,265) (1,739,466)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,266,509 1,297,439
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 2,165,683 2,373,895

NET ASSETS

BEGINNING OF PERIOD 6,487,060 4,113,165

END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $23,585 AND $19,890,
RESPECTIVELY) $ 8,652,743 $ 6,487,060

OTHER INFORMATION
SHARES

SOLD 86,055 113,005

ISSUED IN REINVESTMENT OF DISTRIBUTIONS 2,816 5,223

REDEEMED (48,907) (67,942)

NET INCREASE (DECREASE) 39,964 50,286

</TABLE>

FINANCIAL HIGHLIGHTS

SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEARS ENDED FEBRUARY 28, FOUR MONTHS ENDED YEAR ENDED

AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, OCTOBER 31,

(UNAUDITED) 1997 1996 1995 1994 E 1993 1992

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

NET ASSET VALUE, BEGINNING OF PERIOD $ 28.85 $ 23.56 $ 18.02 $ 17.36 $ 16.73 $ 15.77 $ 14.97

INCOME FROM INVESTMENT OPERATIONS

NET INVESTMENT INCOME .28 D .51 D .48 .43 .44 .15 .42

NET REALIZED AND UNREALIZED GAIN (LOSS) 3.91 5.47 5.63 .77 .88 .94 .97

TOTAL FROM INVESTMENT OPERATIONS 4.19 5.98 6.11 1.20 1.32 1.09 1.39

LESS DISTRIBUTIONS

FROM NET INVESTMENT INCOME (.27) (.49) (.46) (.43) (.44) (.13) (.43)

FROM NET REALIZED GAIN (.10) (.20) (.11) (.07) (.25) - (.16)

IN EXCESS OF NET REALIZED GAIN - - - (.04) - - -

TOTAL DISTRIBUTIONS (.37) (.69) (.57) (.54) (.69) (.13) (.59)

NET ASSET VALUE, END OF PERIOD $ 32.67 $ 28.85 $ 23.56 $ 18.02 $ 17.36 $ 16.73 $ 15.77

TOTAL RETURN B, C 14.66% 25.87% 34.37% 7.17% 8.06% 6.93% 9.59%

RATIOS AND SUPPLEMENTAL DATA

NET ASSETS, END OF PERIOD (IN MILLIONS) $ 8,653 $ 6,487 $ 4,113 $ 2,235 $ 1,892 $ 1,472 $ 1,455

RATIO OF EXPENSES TO AVERAGE NET ASSETS F .21% A .28% .28% .28% .28% .28% A .28%

RATIO OF EXPENSES TO AVERAGE NET ASSETS .20% A, G .26% G .25% G .28% .28% .28% A .28%
AFTER EXPENSE REDUCTIONS

RATIO OF NET INVESTMENT INCOME TO AVERAGE 1.77% A 2.00% 2.34% 2.65% 2.59% 2.95% A 2.78%
NET ASSETS

PORTFOLIO TURNOVER RATE 1% A 3% 1% 11% 4% 28% A 6%

AVERAGE COMMISSION RATE H $ .0234 $ .0237

</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 6 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E EFFECTIVE MARCH 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
F FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1997 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan U.S. Equity Index Fund (the fund) is a fund of Fidelity
Concord Street Trust (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the
U.S. dollar amount actually received.
The effects of changes in foreign currency exchange rates on
investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date. Non-cash dividends included in dividend income, if any, are
recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, is
accrued as earned. Investment income is recorded net of foreign taxes
withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures and options transactions, redemptions in kind
and losses deferred due to wash sales. The fund also utilized earnings
and profits distributed to shareholders on redemption of shares as a
part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences which will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, an affiliate of FMR. The Cash Fund is
an open-end money market fund available only to investment companies
and other accounts managed by FMR and its affiliates. The Cash Fund
seeks preservation of capital, liquidity, and current income by
investing in U.S. Treasury securities and repurchase agreements for
these securities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
received by the fund are recorded as interest income in the
accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. Buying futures tends to increase the
fund's exposure to the underlying instrument, while selling futures
tends to decrease the fund's exposure to the underlying instrument or
hedge other fund investments. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in
the value of the underlying instruments or if the counterparties do
not perform under the contracts' terms. Gains (losses) are realized
upon the expiration or closing of the futures contracts. Futures
contracts are valued at the settlement price established each day by
the board of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases of securities, other than short-term securities, aggregated
$1,164,216,000, of which $44,683,000 represents the current value of
securities delivered in exchange for fund shares.
Sales of securities, other than short-term securities, aggregated
$49,814,000.
The market value of futures contracts opened and closed during the
period amounted to $1,468,964,000 and $1,338,522,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee
that is computed daily at an annual rate of .28% of the fund's average
net assets.
The Board of Trustees has approved an amended management contract
(Amended Contract) which allows for the appointment of Bankers Trust
Company (BTC) as the fund's sub-adviser. A special meeting of the
shareholders will be held on November 19, 1997 for shareholders of
record on September 22, 1997 to approve this amended contract. If the
shareholders approve the appointment of BTC, FMR would continue to
serve as the fund's manager and investment adviser, but would delegate
day-to-day responsibility for managing the fund's investments to BTC.
BTC
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
would also provide custodial and securities lending services to the
fund. FMR would be responsible for overseeing BTC's performance and
would retain its other management services. If the sub-advisory
arrangement is approved, FMR has agreed to reduce its management fee,
which includes custodial services, to an annual rate of .24% of the
fund's average net assets. FMR would pay BTC a sub-advisory fee equal
to 0.006% of the fund's average net assets. BTC would also receive a
fee from the fund equal to 40% of the net income from securities
lending activities, which would not be covered by FMR's voluntary
expense limitation.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer,
dividend disbursing and shareholder servicing agent. FIIOC receives
account fees and asset-based fees that vary according to account size
and type of account. FIIOC pays for typesetting, printing and mailing
of all shareholder reports, except proxy statements. For the period,
the transfer agent fees were equivalent to an annualized rate of .22%
of average net assets.
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
(FSC), an affiliate of FMR, maintains the fund's accounting records
and administers the security lending program. The security lending fee
is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $27,000 for the
period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund
negotiated lenders' fees. These fees are included in interest income.
The fund receives U.S. Treasury obligations and/or cash as collateral
against the loaned securities, in an amount at least equal to 102% of
the market value of the loaned securities at the inception of each
loan. This collateral must be maintained at not less than 100% of the
market value of the loaned securities during the period of the loan.
At period end, the value of the securities loaned and the value of
collateral amounted to $9,862,000 and $10,279,000, respectively.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During
the period, this expense limitation ranged from .28% to .19% of
average net assets and the reimbursement reduced expenses by
$11,827,000. In addition, through December 31, 1999, FMR has agreed to
limit the fund's total operating expenses to an annual rate of .19%.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $3,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $3,000 and $455,000, respectively, under these
arrangements.
PROXY VOTING RESULTS

A special meeting of Spartan U.S. Equity Index Fund's shareholders was
held on March 19, 1997. The meeting was adjourned with respect to
Proposal 3 and Proposals 6-15 and reconvened on March 24, 1997. The
results of votes taken among shareholders on proposals are listed
below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 137,795,009.946 96.540
Withheld 4,938,702.449 3.460
TOTAL 142,733,712.395 100.000
RALPH F. COX
Affirmative 137,794,473.493 96.552
Withheld 4,920,897.902 3.448
TOTAL 142,715,371.395 100.000
Broker
Non-Votes 18,341.000
PHYLLIS BURKE DAVIS
Affirmative 137,727,271.486 96.492
Withheld 5,006,440.909 3.508
TOTAL 142,733,712.395 100.000
ROBERT M. GATES
Affirmative 137,514,094.332 96.343
Withheld 5,219,618.063 3.657
TOTAL 142,733,712.395 100.000
EDWARD C. JOHNSON 3D
Affirmative 137,737,570.694 96.500
Withheld 4,996,141.701 3.500
TOTAL 142,733,712.395 100.000
E. BRADLEY JONES
Affirmative 137,639,422.772 96.431
Withheld 5,094,289.623 3.569
TOTAL 142,733,712.395 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 137,818,547.000 96.556
Withheld 4,915,165.395 3.444
TOTAL 142,733,712.395 100.000
PETER S. LYNCH
Affirmative 137,772,000.244 96.524
Withheld 4,961,712.151 3.476
TOTAL 142,733,712.395 100.000
WILLIAM O. MCCOY
Affirmative 137,801,020.083 96.544
Withheld 4,932,692.312 3.456
TOTAL 142,733,712.395 100.000
GERALD C. MCDONOUGH
Affirmative 137,746,325.927 96.506
Withheld 4,987,386.468 3.494
TOTAL 142,733,712.395 100.000
MARVIN L. MANN
Affirmative 137,784,341.519 96.532
Withheld 4,949,370.876 3.468
TOTAL 142,733,712.395 100.000
THOMAS R. WILLIAMS
Affirmative 137,730,749.586 96.495
Withheld 5,002,962.809 3.505
TOTAL 142,733,712.395 100.000
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 132,475,336.225 92.813
Against 1,859,660.708 1.303
Abstain 8,398,715.462 5.884
TOTAL 142,733,712.395 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
Affirmative 121,865,317.107 85.916
Against 10,962,650.857 7.728
Abstain 9,015,160.431 6.356
TOTAL 141,843,128.395 100.000
Broker Non-Votes 890,584.000
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
Affirmative 94,597,637.203 86.667
Against 6,169,147.110 5.652
Abstain 8,384,029.974 7.681
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 4
To amend the Declaration of Trust to eliminate the notification
requirement regarding the appointment of Trustees
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 121,401,125.939 85.588
Against 10,557,263.759 7.443
Abstain 9,884,738.697 6.969
TOTAL 141,843,128.395 100.000
Broker Non-Votes 890,584.000
PROPOSAL 5
To amend the Declaration of Trust to clarify that the Trustees may
authorize the investment of all of a fund's assets in another open-end
investment company with substantially the same investment objective
and policies.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 118,484,070.068 83.532
Against 13,125,326.708 9.253
Abstain 10,233,731.619 7.215
TOTAL 141,843,128.395 100.000
Broker Non-Votes 890,584.000
PROPOSAL 6
To adopt a new fundamental investment policy for the fund that would
permit it to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 88,152,595.226 80.762
Against 11,301,849.305 10.355
Abstain 9,696,369.756 8.883
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 7
To amend the fundamental investment limitation concerning the sale and
purchase of real estate.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 85,802,938.046 78.610
Against 10,833,666.607 9.925
Abstain 12,514,209.634 11.465
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 8
To amend the fundamental investment limitation concerning borrowing.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 86,263,924.288 79.032
Against 10,294,216.477 9.431
Abstain 12,592,673.522 11.537
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 9
To amend the fundamental investment limitation regarding the purchase
and sale of commodities.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 84,591,303.788 77.499
Against 11,904,106.682 10.907
Abstain 12,655,403.817 11.594
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 10
To amend the fundamental investment limitation concerning
diversification to exclude securities of other investment companies
from the limitation.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 87,172,425.884 79.864
Against 9,489,164.773 8.694
Abstain 12,489,223.630 11.442
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 11
To amend the fundamental investment limitation concerning the issuance
of senior securities.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 85,995,430.017 78.786
Against 10,245,172.094 9.386
Abstain 12,910,212.176 11.828
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 12
To eliminate the fundamental investment limitation concerning short
sales of securities.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 83,640,804.708 76.629
Against 13,028,987.955 11.936
Abstain 12,481,021.624 11.435
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 13
To eliminate the fundamental investment limitation concerning margin
purchases.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 83,277,421.386 76.296
Against 13,376,362.524 12.255
Abstain 12,497,030.377 11.449
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 14
To amend the fundamental investment limitation concerning lending.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 85,897,453.712 78.696
Against 10,481,951.106 9.603
Abstain 12,771,409.469 11.701
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000
PROPOSAL 15
To amend the fundamental investment limitation concerning the
concentration of its investments in a single industry.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 84,925,747.552 77.806
Against 11,653,756.070 10.677
Abstain 12,571,310.665 11.517
TOTAL 109,150,814.287 100.000
Broker Non-Votes 885,453.000

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
William J. Hayes, VICE PRESIDENT
Jennifer Farrelly, VICE PRESIDENT
Robert A. Lawrence, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Richard A. Silver, TREASURER
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
* INDEPENDENT TRUSTEES

(REGISTERED TRADEMARK)
FIDELITY
U.S. BOND INDEX
FUND
(FORMERLY FIDELITY U.S. BOND
INDEX PORTFOLIO)
SEMIANNUAL REPORT
AUGUST 31, 1997
CONTENTS

<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.

PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.

FUND TALK 7 THE MANAGER'S REVIEW OF FUND PERFORMANCE,
STRATEGY AND OUTLOOK.

INVESTMENT CHANGES 9 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S INVESTMENTS
OVER THE PAST SIX MONTHS.

INVESTMENTS 10 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.

FINANCIAL STATEMENTS 15 STATEMENTS OF ASSETS AND LIABILITIES, OPERATIONS, AND
CHANGES IN NET ASSETS, AS WELL AS FINANCIAL HIGHLIGHTS.

NOTES 19 NOTES TO THE FINANCIAL STATEMENTS.

PROXY VOTING RESULTS 21

</TABLE>

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
The short-term volatility that hit the stock and bond markets in the
spring re-emerged in August, and many equity and fixed-income
securities retreated from their 1997 highs. Still, the Standard &
Poor's 500 Index was up roughly 23% year-to-date through August 31,
more than twice its historical annual average. The bond markets have
posted moderate returns through the first eight months of the year,
primarily influenced by positive news on the inflation front.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $100,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of dividend income and capital gains (the
profits earned upon the sale of securities that have grown in value).
You can also look at the fund's income, as reflected in the fund's
yield, to measure performance. If Fidelity had not reimbursed certain
fund expenses, the total returns and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND

FIDELITY U.S. BOND INDEX 4.39% 9.73% 39.16% 89.67%

LEHMAN BROTHERS AGGREGATE BOND INDEX 4.39% 10.00% 39.31% N/A

INTERMEDIATE U.S. GOVERNMENT FUNDS AVERAGE 3.64% 8.46% 30.51% N/A
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on March 8, 1990. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the
fund's returns to the performance of the Lehman Brothers Aggregate
Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of at least one year. To measure how the fund's performance
stacked up against its peers, you can compare it to the intermediate
U.S. government funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past six months average represents a peer group of
124 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

FIDELITY U.S. BOND INDEX 9.73% 6.83% 8.92%

LEHMAN BROTHERS AGGREGATE BOND INDEX 10.00% 6.86% N/A

INTERMEDIATE U.S. GOVERNMENT FUNDS AVERAGE 8.46% 5.45% N/A

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$100,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19970831 19970912 162211 S00000000000001
U.S. Bond Index Fund LB Aggregate Bond
00651 LB001
1990/03/31 100000.00 100000.00
1990/04/30 98902.15 99083.85
1990/05/31 101848.95 102017.56
1990/06/30 103292.33 103654.45
1990/07/31 104861.22 105088.32
1990/08/31 103552.16 103684.91
1990/09/30 104402.79 104542.69
1990/10/31 105789.54 105869.96
1990/11/30 107912.50 108148.92
1990/12/31 109639.21 109834.03
1991/01/31 110945.71 111191.76
1991/02/28 111681.88 112140.90
1991/03/31 112576.12 112912.39
1991/04/30 113908.49 114135.62
1991/05/31 114705.78 114803.07
1991/06/30 114615.95 114744.70
1991/07/31 116187.72 116335.90
1991/08/31 118683.01 118853.42
1991/09/30 121180.35 121261.80
1991/10/31 122572.41 122611.92
1991/11/30 123844.13 123736.17
1991/12/31 127589.08 127410.92
1992/01/31 126089.97 125677.60
1992/02/29 126777.95 126494.77
1992/03/31 126332.45 125781.65
1992/04/30 127155.26 126690.18
1992/05/31 129563.14 129080.80
1992/06/30 131479.59 130857.27
1992/07/31 134384.15 133527.05
1992/08/31 135838.15 134879.71
1992/09/30 137508.23 136478.53
1992/10/31 135863.12 134669.07
1992/11/30 135802.95 134699.52
1992/12/31 137757.58 136841.44
1993/01/31 140497.88 139465.54
1993/02/28 143334.37 141906.91
1993/03/31 143928.53 142498.22
1993/04/30 145002.76 143490.51
1993/05/31 145185.54 143673.23
1993/06/30 147708.62 146277.03
1993/07/31 148811.04 147104.35
1993/08/31 151228.58 149682.77
1993/09/30 151744.97 150093.90
1993/10/31 152254.90 150654.76
1993/11/30 151011.43 149373.16
1993/12/31 151827.73 150182.72
1994/01/31 153733.24 152210.44
1994/02/28 151041.86 149566.03
1994/03/31 147851.94 145878.59
1994/04/30 146592.88 144713.73
1994/05/31 146472.17 144693.43
1994/06/30 146357.40 144373.67
1994/07/31 148983.72 147241.40
1994/08/31 149184.14 147424.12
1994/09/30 147199.85 145254.29
1994/10/31 147124.76 145124.86
1994/11/30 146887.75 144802.56
1994/12/31 147861.23 145802.46
1995/01/31 150615.89 148687.95
1995/02/28 153906.27 152223.12
1995/03/31 154741.75 153157.04
1995/04/30 156921.63 155296.42
1995/05/31 162915.09 161305.96
1995/06/30 164175.49 162488.58
1995/07/31 163920.93 162125.67
1995/08/31 165680.40 164082.33
1995/09/30 167266.66 165678.61
1995/10/31 169659.14 167833.21
1995/11/30 172051.51 170348.19
1995/12/31 174475.09 172738.81
1996/01/31 175635.69 173885.90
1996/02/29 172573.36 170863.36
1996/03/31 171338.87 169675.67
1996/04/30 170217.63 168721.45
1996/05/31 169914.39 168378.84
1996/06/30 172042.14 170640.04
1996/07/31 172563.31 171106.99
1996/08/31 172267.20 170820.22
1996/09/30 175105.19 173797.08
1996/10/31 178991.99 177646.94
1996/11/30 182038.14 180689.78
1996/12/31 180381.75 179009.75
1997/01/31 180767.40 179557.91
1997/02/28 181077.80 180004.57
1997/03/31 179224.55 178009.85
1997/04/30 182026.88 180674.55
1997/05/31 183474.97 182382.50
1997/06/30 185776.23 184547.25
1997/07/31 190598.61 189523.91
1997/08/29 189035.92 187907.32
IMATRL PRASUN SHR__CHT 19970831 19970912 162214 R00000000000092
$100,000 OVER LIFE OF FUND: Let's say hypothetically that $100,000
was invested in Fidelity U.S. Bond Index Fund on March 31, 1990,
shortly after the fund started. As the chart shows, by August 31,
1997, the value of the investment would have grown to $189,036 - an
89.04% increase on the initial investment. For comparison, look at how
the Lehman Brothers Aggregate Bond Index did over the same period.
With dividends and capital gains, if any, reinvested, the same
$100,000 would have grown to $187,907 - an 87.91% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE OPPOSITE
DIRECTION OF INTEREST RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT INVESTS IN BONDS
WILL VARY. THAT MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU MIGHT LOSE
MONEY. BUT IF YOU CAN RIDE OUT THE MARKET'S UPS
AND DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
DIVIDENDS AND YIELD
PERIODS ENDED AUGUST 31, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

DIVIDENDS PER SHARE 6.22(CENTS) 37.24(CENTS) 73.74(CENTS)

ANNUALIZED DIVIDEND RATE 6.92% 7.05% 7.02%

30-DAY ANNUALIZED YIELD 6.39% - -

DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $10.58 over the past one
month, $10.48 over the past six months and $10.51 over the past one
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based
on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds
from different companies on an equal basis. If Fidelity had not
reimbursed certain fund expenses during the period shown, the yield
would have been 6.11%.
FUND TALK: THE MANAGER'S OVERVIEW

AN INTERVIEW WITH
JENNIFER FARRELLY,
PORTFOLIO MANAGER OF
SPARTAN U.S. EQUITY
INDEX FUND
Q. HOW HAS THE FUND PERFORMED, CHRISTINE?
A. The fund's performance closely tracked the Lehman Brothers
Aggregate Bond Index just as it is designed to do. For the six months
that ended August 31, 1997, the fund had a total return of 4.39%,
equal to the Lehman Brothers Aggregate Bond Index return of 4.39%. For
another comparison, the intermediate U.S. government funds average
returned 3.64% for the same six-month period, as tracked by Lipper
Analytical Services. For the 12-month period that ended August 31,
1997, the fund had a total return of 9.73%, while the Lehman Brothers
Aggregate Bond Index returned 10.00% and the intermediate U.S.
government funds average returned 8.46%. The fund's total return is
slightly lower than the index due to operating expenses.
Q. WHAT ACCOUNTED FOR THE BOND MARKET'S PERFORMANCE OVER THE PAST SIX
MONTHS?
A. At the beginning of the period, the yield on a 10-year Treasury
bond - which we'll use as a barometer of the market's overall
performance - stood at 6.67%. From there on, the bond market really
followed a pattern that reflected news about economic growth. For the
first quarter of 1997, the nation's Gross Domestic Product (GDP) -
which is the primary indicator of the status of the U.S. economy -
proved to be quite strong. In response to signs of a strengthening
economy, the Federal Reserve Board raised short-term interest rates as
a pre-emptive strike against inflation. Shortly after that, the yield
on the 10-year Treasury bond reached a six-month peak of 6.98% on
April 14. But the pace of growth eased in the second quarter and this
had a positive impact on the market's performance. The yield on the
10-year bond reached a low of 6.01% on July 31. Subsequently, the
10-year Treasury yield edged higher and ended the period somewhat
higher at 6.34%, as various economic indicators suggested that the
economy was heating up again.
Q. AGAINST THAT BACKDROP, HOW DID INDIVIDUAL SECTORS OF THE TAXABLE
BOND MARKET PERFORM?
A. The non-government sectors - including corporate, mortgage-backed
and agency securities - outpaced Treasuries during the period. One
reason for their better performance was that the yield advantage they
offered over Treasuries made them attractive to investors.
Furthermore, their performance was driven by the fact that yield
spreads - which measure the difference in yields between Treasury
securities and other sectors of the market - narrowed. By that I mean
that there was a smaller difference in yields at the end of the period
than there was at the beginning. For the six-month period that ended
August 31, 1997, here's how individual sectors within the index
performed: corporate securities, which made up about 19% of the index,
returned 4.68%; mortgage-backed securities, at about 30% of the index,
returned 4.50%; agency securities, which accounted for nearly 7% of
the index, returned 4.44%; Treasury securities, at about 43% of the
index, returned 4.21%; and asset-backed securities at less than 1% of
the index, returned 3.73%.
Q. WHAT CHOICES DID YOU MAKE IN THE CORPORATE SECTOR?
A. Within the corporate bond sector, I moved toward a more equal
distribution of investments across a variety of corporate sectors. At
the beginning of the period, the fund had a modest overweighting in
bank securities relative to the index. But I reduced the fund's stake
in bank holdings because their prices had reached what I believed to
be fair value. Additionally, I shortened the duration - which measures
a bond's sensitivity to changes in interest rates - of the fund's
remaining bank holdings. I also pared back the fund's stake in Yankee
bonds - which are bonds issued by foreign companies or governments,
sold in the United States and denominated in U.S. dollars. I felt that
many of the fund's Yankee bonds had also reached fair value.
Offsetting these moves, I added more holdings in the utility and
various other sectors.
Q. WHAT CHOICES DID YOU MAKE WITHIN THE MORTGAGE SECTOR?
A. I continued to focus on "seasoned" mortgages - those that have been
outstanding for some period of time. That's because seasoned holdings
are less susceptible to the increase in refinancing that occurs when
interest rates fall. Additionally, I emphasized mortgage securities
with coupons that were higher and lower than current coupon mortgages.
Here again, the level of refinancing is likely to be affected less by
interest rate movements. Unseasoned current coupon mortgages - which I
have underweighted - are backed by mortgage loans recently
underwritten. These loans historically have proven to be the most
likely to be refinanced when interest rates fall and give homeowners
their first opportunity to refinance and lower their borrowing costs.
Q. WHAT'S AHEAD FOR THE FUND?
A. As always, I will attempt to keep the fund's performance on track
with its benchmark index. In the current environment, there are fewer
opportunities to exploit price inefficiencies that historically result
from a bond's maturity, credit quality, or other structural
characteristics. As a result, there is less room to differentiate the
fund's performance from its index based on security selection than
there was even six months ago. However, I'll continue to rely on
Fidelity's research efforts to identify those opportunities as they
arise.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
CHRISTINE THOMPSON ON HER INVESTMENT
STRATEGY:
"SINCE THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS
MADE UP OF 4,000 INDIVIDUAL SECURITIES, IT'S IMPRACTICAL
FOR THE FUND TO OWN EVERYTHING IN IT. IN CHOOSING THE
FUND'S INVESTMENTS, I USE A TECHNIQUE KNOWN AS
STATISTICAL SAMPLING. THIS PROCESS ENTAILS ASSEMBLING
A PORTFOLIO THAT REPLICATES THE CHARACTERISTICS OF THE
INDEX - WHICH CAN INCLUDE DURATION, SECTOR, MATURITY,
CREDIT QUALITY AND OTHERS - BY INVESTING IN
REPRESENTATIVE ISSUES.
"ONE EXAMPLE IS DURATION, WHICH IS A MEASURE OF A
SECURITY'S PRICE SENSITIVITY TO CHANGES IN INTEREST RATES.
THE DURATION OF THE FUND AND THE DISTRIBUTION OF
DURATION ARE ALWAYS SET TO APPROXIMATE THE INDEX. I
DETERMINE WHAT PERCENT OF THE INDEX FALLS WITHIN A
DURATION OF ZERO TO ONE YEAR, ONE TO TWO YEARS AND SO ON.
THE NEXT STEP IS TO IDENTIFY SECURITIES THAT WILL GIVE THE
FUND THE SAME DURATION BREAKDOWN AS THE INDEX. I FOLLOW
THE SAME PROCEDURE FOR OTHER SECURITY CHARACTERISTICS
INCLUDING, BUT NOT LIMITED TO, SECTOR, MATURITY AND
CREDIT QUALITY.
"THE NEXT STEP IS TO PICK INDIVIDUAL SECURITIES USING
FIDELITY'S RESEARCH RESOURCES. I CHOOSE SECURITIES THAT
HAVE THE CHARACTERISTICS I NEED AND ALSO OFFER THE
POTENTIAL FOR PERFORMING BETTER THAN OTHER SECURITIES
WITH SIMILAR CHARACTERISTICS. FOR EXAMPLE, I MAY NEED
A CORPORATE SECURITY AND, AT THE SAME TIME, A SECURITY
WITH A 10-YEAR DURATION. I ALSO CONSIDER RELATIVE PRICES
IN A HISTORIC CONTEXT AND HOW VALUATIONS HAVE DIFFERED
AT VARIOUS POINTS IN AN ECONOMIC CYCLE."
FUND FACTS
GOAL: TO PROVIDE RETURNS CONSISTENT WITH THOSE OF
THE LEHMAN BROTHERS AGGREGATE BOND INDEX
START DATE: MARCH 8, 1990
SIZE: AS OF AUGUST 31, 1997, MORE THAN
$599 MILLION
MANAGER: CHRISTINE THOMPSON, SINCE 1990;
MANAGER, FIDELITY INTERMEDIATE BOND FUND, SINCE
1995; CO-MANAGER, FIDELITY GLOBAL BOND FUND,
SINCE 1996; FIDELITY TARGET TIMELINE FUNDS, SINCE
1996; JOINED FIDELITY IN 1985
(CHECKMARK)
INVESTMENT CHANGES

QUALITY DIVERSIFICATION AS OF AUGUST 31, 1997
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS 6 MONTHS AGO

AAA 70.1 71.2

AA 0.9 0.9

A 11.1 12.5

BAA 10.7 12.7

BA 2.7 1.0

TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING
AGENCIES OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF
ACQUISITION BY FIDELITY.
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1997
6 MONTHS AGO

YEARS 8.1 8.4

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF AUGUST 31, 1997
6 MONTHS AGO

YEARS 4.6 4.7

DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF AUGUST 31, 1997 * AS OF FEBRUARY 28, 1997 **
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 40.2%
MORTGAGE-BACKED
SECURITIES 27.7%
CORPORATE BONDS 27.1%
FOREIGN GOVERNMENT
OBLIGATIONS 0.3%
OTHER 0.2%
SHORT-TERM
INVESTMENTS 4.5%
FOREIGN INVESTMENTS 3.8%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 41.5%
MORTGAGE-BACKED
SECURITIES 27.7%
CORPORATE BONDS 28.1%
FOREIGN GOVERNMENT
OBLIGATIONS 0.7%
OTHER 0.3%
SHORT-TERM
INVESTMENTS 1.7%
FOREIGN INVESTMENTS 4.7%
ROW: 1, COL: 1, VALUE: 4.5
ROW: 1, COL: 2, VALUE: 1.0
ROW: 1, COL: 3, VALUE: 1.3
ROW: 1, COL: 4, VALUE: 27.1
ROW: 1, COL: 5, VALUE: 27.7
ROW: 1, COL: 6, VALUE: 40.2
ROW: 1, COL: 1, VALUE: 2.7
ROW: 1, COL: 2, VALUE: 1.0
ROW: 1, COL: 3, VALUE: 1.4
ROW: 1, COL: 4, VALUE: 28.1
ROW: 1, COL: 5, VALUE: 27.7
ROW: 1, COL: 6, VALUE: 45.1
*
**
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)

SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES

NONCONVERTIBLE BONDS - 27.1%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
AEROSPACE & DEFENSE - 1.0%
DEFENSE ELECTRONICS - 1.0%
Raytheon Co.:
6.30%, 8/15/00 Baa1 $ 3,000,000 $ 2,989,320
6.45%, 8/15/04 Baa1 3,470,000 3,438,701
6,428,021
BASIC INDUSTRIES - 0.5%
CHEMICALS & PLASTICS - 0.5%
Methanex Corp. yankee
8 7/8%, 11/15/01 A2 2,820,000 2,985,844
DURABLES - 0.6%
TEXTILES & APPAREL - 0.6%
Levi Strauss & Co. 7%,
11/1/06 (b) Baa2 4,000,000 4,001,960
ENERGY - 0.7%
OIL & GAS - 0.7%
Nationale Elf Aquitaine yankee
7 3/4%, 5/1/99 Aa3 150,000 153,492
Occidental Petroleum Corp.:
6 3/4%, 9/16/99 Baa3 810,000 814,180
6.09%, 11/29/99 Baa3 390,000 386,619
Phillips 66 Capital II
8%, 1/15/07 Baa1 3,000,000 3,019,230
4,373,521
FINANCE - 15.5%
ASSET-BACKED SECURITIES - 2.9%
Boatmens Auto Trust
6.35%, 10/15/01 A2 430,000 430,672
Case Equipment Loan Trust
6.45%, 9/15/02 A3 1,000,000 991,170
Caterpillar Financial Asset Trust
6.55%, 5/22/02 A3 500,000 501,953
Ford Credit Grantor Trust
5.90%, 10/15/00 Aaa 1,952,313 1,952,313
Green Tree Financial Corp.:
6.45%, 5/15/27 Aaa 1,460,000 1,465,008
6.65%, 7/15/27 Aaa 2,120,000 2,128,607
KeyCorp Auto Grantor Trust
5.80%, 7/15/00 A3 100,061 100,034
MBNA Master Credit Card Trust II Aaa 3,000,000 3,024,375
Olympic Automobile Receivables
Trust 6 1/8%, 11/15/04 Aaa 1,472,877 1,495,751
Premier Auto Trust:
6.80%, 12/2/98 Aa3 290,150 291,145 6%, 5/6/00 Aaa 1,230,000
1,230,381

MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
Standard Credit Card Master Trust I:
participation certificate 5 1/2%,
9/7/98 A2 $ 960,000 $ 959,100
7.65%, 2/15/00 A2 430,000 431,344
Union Acceptance Corp.
7.075%, 7/10/02 Baa2 225,353 226,689
Union Federal Savings Bank
Grantor Trust 6.975%,
7/10/00 Baa2 485,142 484,990
WFS Financial Owner Trust
6.90%, 12/20/03 Aaa 2,370,000 2,411,950
18,125,482
BANKS - 7.9%
Banco Latinoamer Exportaciones
Euro 6.90%, 12/6/99 (b) Baa2 1,000,000 1,012,818
BanPonce Financial Corp.
6.642%, 4/8/99 A3 2,540,000 2,558,034
BanPonce Corp. 6.488%, 3/3/00 A3 1,440,000 1,441,080
Barnett Banks, Inc.
10 7/8%, 3/15/03 A3 1,020,000 1,195,797
Capital One Bank:
6.83%, 5/17/99 Baa3 1,000,000 1,006,760
6.55%, 2/4/00 Baa3 2,000,000 1,996,180
Citicorp 9%, 4/15/99 A1 1,053,000 1,096,426
Comerica, Inc. 9 3/4%, 5/1/99 A3 1,000,000 1,053,010
Corporacion Andina De Fomento
yankee 7 3/8%, 7/21/00 A3 5,000,000 5,100,600
First Hawaiian, Inc.
6 1/4%, 8/15/00 Baa1 1,000,000 988,180
First Interstate Bancorp
8 5/8%, 4/1/99 A2 1,042,000 1,079,231
First Maryland Bancorp
10 3/8%, 8/1/99 A3 750,000 802,485
First Tennessee National Corp.
6 3/4%, 11/15/05 Baa1 620,000 610,719
Firstar Corp. 7.15%, 9/1/00 A3 1,300,000 1,307,878
Fleet/Norstar Financial Group,
Inc. 9.90%, 6/15/01 A3 1,390,000 1,539,953
Kansallis-Osake-Pankki
10%, 5/1/02 A3 2,600,000 2,923,440
Korea Development Bank yankee:
7%, 7/15/99 A1 1,000,000 1,009,590
6 1/4%, 5/1/00 A1 2,000,000 1,989,860
Merchants National Corp.
9 7/8%, 10/1/99 A2 1,650,000 1,760,468
Merita Bank Ltd. yankee
6 1/2%, 1/15/06 A3 2,100,000 2,016,126
Midland American Capital Corp.
gtd. 12 3/4%, 11/15/03 Aa3 330,000 354,047
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Midland Bank PLC yankee
7 5/8%, 6/15/06 Aa3 $ 2,000,000 $ 2,080,560
Midlantic Corp.:
9 7/8%, 12/1/99 A3 1,000,000 1,069,680
9.20%, 8/1/01 A3 1,337,000 1,449,535
NCNB Corp. 10.20%, 7/15/15 A2 2,000,000 2,521,120
Provident Bank:
6 1/8%, 12/15/00 A3 1,800,000 1,776,330 6 3/8%, 1/15/04 Baa2
1,500,000 1,456,005
Shawmut National Corp.
8 5/8%, 12/15/99 A3 1,190,000 1,241,682
Signet Bank 7.80%, 9/15/06 Baa1 1,500,000 1,564,935
Signet Banking Corp.
9 5/8%, 6/1/99 Baa2 1,264,000 1,328,135
Union Planters Corp.
6 3/4%, 11/1/05 Baa2 1,500,000 1,468,560
48,799,224
CREDIT & OTHER FINANCE - 3.0%
AT&T Capital Corp.
6.65%, 4/30/99 Baa3 4,100,000 4,122,755
Chase Capital I
7.67%, 12/1/26 A1 3,000,000 2,922,720
Edison Mission Energy Funding
Corp. 6.77%, 9/15/03 (b) Baa1 3,524,986 3,527,630
First Security Capital I
8.41%, 12/15/26 A3 3,000,000 3,111,480
Fleet Mortgage Group, Inc.
6 1/2%, 6/15/00 A2 800,000 801,456
Ford Motor Credit
7.05%, 6/6/01 A1 1,000,000 1,016,450
MCN Investment Corp.:
5.84%, 2/1/99 Baa2 1,460,000 1,458,102
6.03%, 2/1/01 Baa2 1,940,000 1,907,136
18,867,729
INSURANCE - 0.8%
Metropolitan Life Insurance Co.
6.30%, 11/1/03 (b) A1 2,560,000 2,481,050
Nationwide Mutual Insurance Co.
6 1/2%, 2/15/04 (b) A1 2,690,000 2,620,867
5,101,917
SAVINGS & LOANS - 0.9%
Great Western Financial Corp.
6 3/8%, 7/1/00 A3 1,000,000 995,620

MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
Home Savings of America FSB:
6%, 11/1/00 A3 $ 1,000,000 $ 980,700
6 1/2%, 8/15/04 A3 2,000,000 1,957,680
Long Island Savings Bank FSB
7%, 6/13/02 Baa3 1,500,000 1,503,750
5,437,750
TOTAL FINANCE 96,332,102
MEDIA & LEISURE - 1.5%
BROADCASTING - 1.1%
Bell Cablemedia PLC (d):
0%, 7/15/04 Baa3 1,940,000 1,779,950
0%, 9/15/05 Baa3 1,400,000 1,197,000
TCI Communication, Inc.
7 1/4%, 6/15/99 Ba1 4,000,000 4,036,000
7,012,950
ENTERTAINMENT - 0.4%
Time Warner, Inc.
7.95%, 2/1/00 Ba1 2,400,000 2,471,568
TOTAL MEDIA & LEISURE 9,484,518
NONDURABLES - 0.8%
TOBACCO - 0.8%
Philip Morris Companies, Inc.:
7 1/4%, 9/15/01 A2 2,400,000 2,442,816
7%, 7/15/05 A2 2,500,000 2,468,600
4,911,416
RETAIL & WHOLESALE - 1.5%
APPAREL STORES - 0.2%
Limited, Inc. 9 1/8%, 2/1/01 Baa2 1,150,000 1,219,495
GENERAL MERCHANDISE STORES - 1.3%
Dayton Hudson Corp.
10%, 12/1/00 Baa1 1,000,000 1,095,320
Federated Department Stores, Inc.:
10%, 2/15/01 Baa2 2,500,000 2,755,375
8 1/8%, 10/15/02 Baa2 2,000,000 2,115,120
6.79%, 7/15/27 Baa2 1,800,000 1,793,232
7,759,047
TOTAL RETAIL & WHOLESALE 8,978,542
TECHNOLOGY - 0.8%
COMPUTERS & OFFICE EQUIPMENT - 0.8%
Comdisco, Inc.:
6.55%, 2/4/00 Baa1 1,500,000 1,504,275
9.30%, 6/27/00 Baa2 1,250,000 1,339,638
9 1/4%, 7/6/00 Baa2 375,000 401,190
5 3/4%, 2/15/01 Baa1 1,500,000 1,460,355
4,705,458
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
Continental Airlines Pass Through
Trust pass through certificate
7.42%, 10/1/08 Baa2 $1,500,000 $ 1,520,715
UTILITIES - 4.0%
CELLULAR - 0.5%
360 Degrees Communications Co.:
7 1/8%, 3/1/03 Ba1 1,530,000 1,534,728
7 1/2%, 3/1/06 Ba1 1,425,000 1,439,136
2,973,864
ELECTRIC UTILITY - 0.8%
British Columbia Hydro & Power
Authority yankee 12 1/2%,
1/15/14 Aa2 930,000 1,040,856
Massachusetts Electric Co.
6.78%, 11/20/06 A2 2,000,000 1,979,000
United Illuminating Co.:
7 3/8%, 1/15/98 Baa3 1,500,000 1,508,325
9.76%, 1/2/06 Baa3 273,000 281,627
4,809,808
GAS - 1.5%
Columbia Gas System, Inc.:
6.39%, 11/28/00 Baa1 2,000,000 1,988,660
6.61%, 11/28/02 Baa1 1,000,000 995,280
Sonat, Inc. 9 1/2%, 8/15/99 A3 3,034,000 3,190,827
Southwest Gas Corp.
9 3/4%, 6/15/02 Baa2 2,930,000 3,265,544
9,440,311
TELEPHONE SERVICES - 1.2%
LCI International, Inc.
7 1/4%, 6/15/07 Ba1 725,000 724,369
WorldCom, Inc.:
9 3/8%, 1/15/04 Ba1 1,891,000 2,018,283
8 7/8%, 1/15/06 Ba1 2,014,000 2,171,696
7 3/4%, 4/1/07 Ba1 2,500,000 2,579,675
7,494,023
TOTAL UTILITIES 24,718,006
TOTAL NONCONVERTIBLE BONDS
(Cost $168,849,365) 168,440,103
U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS - 40.2%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 36.3%
9 1/4%, 8/15/98 Aaa $15,445,000 $ 15,932,444
8 7/8%, 2/15/99 Aaa 630,000 655,691
8%, 8/15/99 Aaa 6,350,000 6,582,156
7 3/4%, 12/31/99 Aaa 18,953,000 19,648,954
8 1/2%, 2/15/00 Aaa 9,500,000 10,020,980
7 7/8%, 8/15/01 Aaa 14,500,000 15,338,245
10 3/4%, 2/15/03 Aaa 1,300,000 1,564,667
10 3/4%, 5/15/03 Aaa 12,173,000 14,738,825
12 3/8%, 5/15/04 Aaa 6,666,000 8,832,450
11 5/8%, 11/15/04 Aaa 1,900,000 2,468,518
7%, 7/15/06 Aaa 850,000 883,465
11 3/4%, 2/15/10 (callable) Aaa 4,762,000 6,234,506
12 3/4%, 11/15/10 (callable) Aaa 7,950,000 11,079,041
13 7/8%, 5/15/11 (callable) Aaa 300,000 445,452
12%, 8/15/13 (callable) Aaa 27,090,000 38,429,603
9 7/8%, 11/15/15 Aaa 18,300,000 24,439,101
9%, 11/15/18 Aaa 19,790,000 24,910,663
7 1/4%, 2/15/23 Aaa 21,900,000 23,015,586
TOTAL U.S. TREASURY OBLIGATIONS 225,220,347
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.9%
Federal Agricultural Mortgage
Corporation:
7.44%, 5/25/00 Aaa 500,000 515,310
6.92%, 8/10/02 Aaa 1,040,000 1,060,634
Federal Home Loan Bank:
6.37%, 6/30/03 Aaa 510,000 507,292 7.31%, 6/16/04 Aaa 2,040,000
2,124,782
7.38%, 8/5/04 Aaa 460,000 481,201
Federal Home Loan Mortgage
Corporation 8%, 1/26/05 Aaa 1,000,000 1,078,440
Federal National Mortgage
Association 7 3/8%, 3/28/05 Aaa 500,000 522,110
Government Loan Trusts (assets
of Trust guaranteed by U.S.
Government through Agency
for International Development)
8 1/2%, 4/1/06 Aaa 2,705,000 2,933,059
Government Trust Certificates
(assets of Trust guaranteed by
U.S. Government through
Defense Security Assistance
Agency):
Class 1-C, 9 1/4%, 11/15/01 Aaa 611,617 648,650 Class 2-E,
9.40%, 5/15/02 Aaa 1,197,533 1,268,858 Class T-3, 9 5/8%, 5/15/02
Aaa 2,578,381 2,733,161
U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
Guaranteed Export Trust
Certificates (assets of Trust
guaranteed by U.S. Government
through Export-Import Bank):
Series 1994-C, 6.61%,
9/15/99 Aaa $ 150,930 $ 151,609
Series 1993-C, 5.20%,
10/15/04 Aaa 1,201,244 1,159,248
Series 1993-D, 5.23%,
5/15/05 Aaa 620,000 594,740
Overseas Private Investment
Corp. (U.S. Government
guaranteed participation
certificate) Series 1994-195,
6.08%, 8/15/04 (callable) Aaa 1,590,000 1,564,878
Private Export Funding Corp.
secured:
5.65%, 3/15/03 Aaa 858,000 845,139
5.48%, 9/15/03 Aaa 2,112,500 2,055,885
5.80%, 2/1/04 Aaa 1,900,000 1,857,630
6.86%, 4/30/04 Aaa 955,500 966,326
U.S. Department of Housing
and Urban Development (U.S.
Government guaranteed
participation certificates) Series
1995-A, 8.27%, 8/1/03 Aaa 1,000,000 1,085,540
TOTAL U.S. GOVERNMENT
AGENCY OBLIGATIONS 24,154,492
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $248,874,216) 249,374,839
U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES - 27.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.1%
6 1/2%, 10/1/07 Aaa 770,522 765,336
7%, 6/1/99 to 7/1/26 Aaa 2,406,828 2,428,967
7 1/2%, 4/1/26 to 8/1/27 Aaa 9,851,407 9,966,699
8%, 7/1/16 Aaa 11,656 12,135
8%, 9/1/27 (e) Aaa 4,850,000 4,997,016
8 1/2%, 9/1/19 Aaa 32,919 34,723
9%, 11/1/01 to 10/1/16 Aaa 697,765 733,635
9 1/2%, 10/1/08 to 9/1/18 Aaa 1,048,627 1,118,904
10%, 6/1/20 Aaa 195,529 213,768
10 1/2%, 1/1/01 to 2/1/29 Aaa 639,724 699,918

MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
11%, 1/1/06 to 9/1/20 Aaa $ 3,234,326 $ 3,615,132
11 1/2%, 8/1/13 to 10/1/15 Aaa 185,425 208,323
11 3/4%, 9/1/13 Aaa 77,842 87,292
12%, 2/1/13 to 7/1/15 Aaa 68,563 78,453
12 3/4%, 8/1/12 to 10/1/13 Aaa 155,046 179,196
13 1/2%, 1/1/23 Aaa 411,705 489,402
25,628,899
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 14.9%
5 1/2%, 9/1/00 to 4/1/11 Aaa 13,023,769 12,513,367
6%, 1/1/01 to 5/1/26 Aaa 12,150,304 11,876,574
6 1/2%, 11/1/08 to 3/1/26 Aaa 13,704,762 13,302,721
7%, 10/1/11 to 5/1/27 Aaa 34,113,741 34,125,861
7%, 8/1/27 (e) Aaa 700,000 691,469
7 1/2%, 11/1/07 to
10/1/09 Aaa 1,689,512 1,725,856
7 1/2%, 9/1/27 (e) Aaa 4,880,000 4,928,800
8%, 8/1/27 (e) Aaa 7,000,000 7,196,875
8 1/2%, 6/1/17 to 7/1/24 Aaa 3,159,756 3,316,033
9 1/2%, 9/1/21 Aaa 1,705,593 1,839,892
10 3/4%, 9/1/10 to 5/1/14 Aaa 283,527 312,747
11 1/4%, 5/1/14 Aaa 53,592 59,994
11 1/2%, 8/1/14 Aaa 176,629 200,186
12 1/2%, 1/1/15 Aaa 64,184 73,904
13%, 12/1/14 to 1/1/15 Aaa 104,928 124,634
13 1/2%, 8/1/14 to 11/1/14 Aaa 46,831 56,300
14%, 3/1/12 to 10/1/14 Aaa 308,148 367,504
92,712,717
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 8.1%
6%, 12/15/08 to 4/15/09 Aaa 2,334,575 2,282,945
6 1/2%, 6/15/23 to 6/15/24 Aaa 7,393,918 7,158,585
7%, 12/15/22 to 9/15/23 Aaa 2,689,310 2,667,645
7 1/2%, 2/15/17 to 4/15/24 Aaa 3,509,684 3,556,340
8%, 5/15/17 to 7/15/27 Aaa 17,811,904 18,341,495
9%, 7/15/18 Aaa 29,512 31,818
9 1/2%, 1/15/19 to 11/15/24 Aaa 462,014 502,462
10%, 6/15/13 to 9/15/25 Aaa 4,231,424 4,708,817
10 1/2%, 5/15/16 to 1/15/18 Aaa 2,980,621 3,343,699
11%, 2/15/10 to 8/15/19 Aaa 5,032,650 5,718,422
11%, 2/15/10 (e) Aaa 90,454 101,357
11 1/2%, 7/15/10 to 8/15/13 Aaa 2,708 3,109
12%, 2/15/16 Aaa 1,336,128 1,561,800
49,978,494
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $166,238,498) 168,320,110
COMMERCIAL MORTGAGE SECURITIES - 0.6%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
GS Mortgage Securities Corp. II
Series 1997-GL Class A2-B,
6.86%, 7/13/30 Aaa $ 3,000,000 $ 3,024,844
Oregon Commercial Mortgage, Inc.
Series 1995-1 Class A,
7.15%, 6/25/26 (b)(f) Aaa 450,215 451,270
Resolution Trust Corp. Series
1995-C2 Class A-1B,
6 1/4%, 5/25/27 Aaa 159,794 159,144
TOTAL COMMERCIAL MORTGAGE
SECURITIES (Cost $3,653,900) 3,635,258
FOREIGN GOVERNMENT OBLIGATIONS (C) - 0.3%
Manitoba Province yankee
7.93%, 2/15/00 A1 850,000 877,812
Newfoundland Province yankee
7.32%, 10/13/23 Baa1 1,220,000 1,201,346
TOTAL FOREIGN GOVERNMENT
OBLIGATIONS (Cost $2,093,867) 2,079,158
SUPRANATIONAL OBLIGATIONS - 0.2%
African Development Bank
7 3/4%, 12/15/01
(Cost $1,382,934) Aa1 1,325,000 1,382,540
CASH EQUIVALENTS - 4.5%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.33%, dated
8/29/97 due 9/2/97 $ 27,678,382 27,662,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $618,754,780) $ 620,894,008
LEGEND
4. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
5. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $14,095,595 or
2.4% of net assets.
6. For foreign government obligations not individually rated by S&P or
Moody's, the ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
7. Debt obligation initially issued in zero coupon form which converts
to coupon form at a specified rate and date.
8. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
9. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 82.0% AAA, AA, A 76.1%
Baa 10.8% BBB 19.2%
Ba 2.7% BB 0.2%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings
of the sovereign credit of the issuing government.
INCOME TAX INFORMATION
At August 31, 1997, the aggregate cost of investment securities for
income tax purposes was $619,126,979. Net unrealized appreciation
aggregated $1,767,029 of which $6,562,948 related to appreciated
investment securities and $4,795,919 related to depreciated investment
securities.
At February 28, 1997, the fund had a capital loss carryforward of
approximately $11,394,000 of which $5,486,000, $3,769,000 and
$2,139,000 will expire on February 28, 2003, February 29, 2004 and
February 28, 2005, respectively.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS AUGUST 31, 1997 (UNAUDITED)

ASSETS

INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE AGREEMENTS OF $27,662,000)
(COST $618,754,780) $ 620,894,008
- - SEE ACCOMPANYING SCHEDULE

CASH 143,252

RECEIVABLE FOR INVESTMENTS SOLD 592,858

INTEREST RECEIVABLE 6,701,131

TOTAL ASSETS 628,331,249

LIABILITIES

PAYABLE FOR INVESTMENTS PURCHASED $ 10,526,101
REGULAR DELIVERY

DELAYED DELIVERY 17,909,614

DISTRIBUTIONS PAYABLE 305,476

ACCRUED MANAGEMENT FEE 24,437

OTHER PAYABLES AND ACCRUED EXPENSES 163,241

TOTAL LIABILITIES 28,928,869

NET ASSETS $ 599,402,380

NET ASSETS CONSIST OF:

PAID IN CAPITAL $ 610,033,350

DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME (265,514)

ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS (12,504,684)

NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,139,228

NET ASSETS, FOR 56,741,542 SHARES OUTSTANDING $ 599,402,380

NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE ($599,402,380 (DIVIDED BY)
56,741,542 SHARES) $10.56

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED AUGUST 31, 1997 (UNAUDITED)

INVESTMENT INCOME $ 21,754,294
INTEREST

EXPENSES

MANAGEMENT FEE $ 931,578

TRANSFER AGENT FEES 650,340

ACCOUNTING FEES AND EXPENSES 108,828

NON-INTERESTED TRUSTEES' COMPENSATION 1,351

CUSTODIAN FEES AND EXPENSES 22,855

REGISTRATION FEES 22,203

AUDIT 24,975

LEGAL 6,252

REPORTS TO SHAREHOLDERS 9,436

MISCELLANEOUS 79

TOTAL EXPENSES BEFORE REDUCTIONS 1,777,897

EXPENSE REDUCTIONS (870,029) 907,868

NET INVESTMENT INCOME 20,846,426

REALIZED AND UNREALIZED GAIN (LOSS) (390,694)
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENT SECURITIES 4,739,899

NET GAIN (LOSS) 4,349,205

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 25,195,631

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1997 FEBRUARY 28,
(UNAUDITED) 1997

INCREASE (DECREASE) IN NET ASSETS

OPERATIONS $ 20,846,426 $ 36,315,771
NET INVESTMENT INCOME

NET REALIZED GAIN (LOSS) (390,694) (2,760,808)

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 4,739,899 (7,661,971)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 25,195,631 25,892,992

DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (20,721,209) (36,038,592)

SHARE TRANSACTIONS 115,535,349 199,504,433
NET PROCEEDS FROM SALES OF SHARES

REINVESTMENT OF DISTRIBUTIONS 18,833,127 32,500,246

COST OF SHARES REDEEMED (107,820,483) (129,124,771)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 26,547,993 102,879,908

TOTAL INCREASE (DECREASE) IN NET ASSETS 31,022,415 92,734,308

NET ASSETS

BEGINNING OF PERIOD 568,379,965 475,645,657

END OF PERIOD (INCLUDING DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME OF
$265,514 AND $ 599,402,380 $ 568,379,965
$390,731, RESPECTIVELY)

OTHER INFORMATION
SHARES

SOLD 11,013,882 18,991,542

ISSUED IN REINVESTMENT OF DISTRIBUTIONS 1,796,003 3,099,083

REDEEMED (10,277,355) (12,298,032)

NET INCREASE (DECREASE) 2,532,530 9,792,593

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEARS ENDED FEBRUARY 28, FOUR MONTHS YEAR ENDED
AUGUST 31, 1997 FEBRUARY 28, FEBRUARY 29, ENDED OCTOBER 31,
FEBRUARY 28,

(UNAUDITED) 1997 1996 1995 1994 E 1993 1992

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

NET ASSET VALUE, BEGINNING OF PERIOD $ 10.480 $ 10.710 $ 10.250 $ 10.830 $ 11.070 $ 10.910 $ 10.710

INCOME FROM INVESTMENT OPERATIONS .375 D .739 D .755 .718 .697 .260 .839
NET INVESTMENT INCOME

NET REALIZED AND UNREALIZED .077 (.235) .460 (.542) (.110) .324 .277
GAIN (LOSS)

TOTAL FROM INVESTMENT OPERATIONS .452 .504 1.215 .176 .587 .584 1.116

LESS DISTRIBUTIONS

FROM NET INVESTMENT INCOME (.372) (.734) (.755) (.756) (.727) (.254) (.836)

FROM NET REALIZED GAIN - - - - (.070) (.170) (.080)

IN EXCESS OF NET REALIZED GAIN - - - - (.030) - -

TOTAL DISTRIBUTIONS (.372) (.734) (.755) (.756) (.827) (.424) (.916)

NET ASSET VALUE, END OF PERIOD $ 10.560 $ 10.480 $ 10.710 $ 10.250 $ 10.830 $ 11.070 $ 10.910

TOTAL RETURN B, C 4.39% 4.93% 12.13% 1.90% 5.38% 5.50% 10.84%

RATIOS AND SUPPLEMENTAL DATA

NET ASSETS, END OF PERIOD $ 599,402 $ 568,380 $ 475,646 $ 354,682 $ 288,504 $ 123,351 $ 86,149
(000 OMITTED)

RATIO OF EXPENSES TO AVERAGE .32% A, .32% F .32% F .32% F .32% F .32% A, .32%
NET ASSETS F F F

RATIO OF EXPENSES TO AVERAGE NET .31% A, .31% G .31% G .32% .32% .32% A .32%
ASSETS AFTER EXPENSE REDUCTIONS G

RATIO OF NET INVESTMENT INCOME TO 7.10% A 7.05% 7.11% 7.58% 6.93% 7.34% A 7.70%
AVERAGE NET ASSETS

PORTFOLIO TURNOVER RATE 82% A 65% 128% 73% 160% 89% A 113%

</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).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E EFFECTIVE MARCH 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
F FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1997 (Unaudited)

7. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity U.S. Bond Index Fund (the fund) is a fund of Fidelity Concord
Street Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under
the general supervision of the Board of Trustees. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward
currency contracts, disposition of foreign currencies, and the
difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of
original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net investment income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for paydown gains/losses on certain securities, market
discount, capital loss carryforwards and losses deferred due to wash
sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments may include
temporary book and tax basis differences that will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
8. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of
the underlying securities and the date when the securities will be
delivered and paid for are fixed at the time the transaction is
negotiated. The market values of the securities purchased or sold on a
delayed delivery basis are identified as such in the fund's schedule
of investments. The fund may receive compensation for interest forgone
in the purchase of a delayed delivery security. With respect to
purchase commitments, the fund identifies securities as segregated in
its custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
9. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $266,429,714 and $236,612,091, respectively, of which U.S.
government and government agency obligations aggregated $200,992,518
and $176,566,957, respectively.
10. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee
that is computed daily at an annual rate of .32% of the fund's average
net assets.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer,
dividend disbursing and shareholder servicing agent. FIIOC receives
account fees and asset-based fees that vary according to account size
and type of account. FIIOC pays for typesetting, printing and mailing
of all shareholder reports, except proxy statements. For the period,
the transfer agent fees were equivalent to an annualized rate of .22%
of average net assets.
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
11. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .32% of average net assets. For the
period, the reimbursement reduced the expenses by $838,658.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $6,891 and $24,480, respectively, under these arrangements.
PROXY VOTING RESULTS

A special meeting of the fund's shareholders was held on March 19,
1997. The results of votes taken among shareholders on proposals
before them are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 137,795,009.946 96.540
Withheld 4,938,702.449 3.460
TOTAL 142,733,712.395 100.000
RALPH F. COX
Affirmative 137,794,473.493 96.552
Withheld 4,920,897.902 3.448
TOTAL 142,715,371.395 100.000
Broker Non-Votes 18,341.000
PHYLLIS BURKE DAVIS
Affirmative 137,727,271.486 96.492
Withheld 5,006,440.909 3.508
TOTAL 142,733,712.395 100.000
ROBERT M. GATES
Affirmative 137,514,094.332 96.343
Withheld 5,219,618.063 3.657
TOTAL 142,733,712.395 100.000
EDWARD C. JOHNSON 3D
Affirmative 137,737,570.694 96.500
Withheld 4,996,141.701 3.500
TOTAL 142,733,712.395 100.000
E. BRADLEY JONES
Affirmative 137,639,422.772 96.431
Withheld 5,094,289.623 3.569
TOTAL 142,733,712.395 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 137,818,547.000 96.556
Withheld 4,915,165.395 3.444
TOTAL 142,733,712.395 100.000
PETER S. LYNCH
Affirmative 137,772,000.244 96.524
Withheld 4,961,712.151 3.476
TOTAL 142,733,712.395 100.000
WILLIAM O. MCCOY
Affirmative 137,801,020.083 96.544
Withheld 4,932,692.312 3.456
TOTAL 142,733,712.395 100.000
GERALD C. MCDONOUGH
Affirmative 137,746,325.927 96.506
Withheld 4,987,386.468 3.494
TOTAL 142,733,712.395 100.000
MARVIN L. MANN
Affirmative 137,784,341.519 96.532
Withheld 4,949,370.876 3.468
TOTAL 142,733,712.395 100.000
THOMAS R. WILLIAMS
Affirmative 137,730,749.586 96.495
Withheld 5,002,962.809 3.505
TOTAL 142,733,712.395 100.000
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 132,475,336.225 92.813

AGAINST 1,859,660.708 1.303

ABSTAIN 8,398,715.462 5.884

TOTAL 142,733,712.395 100.000

PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the
number of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 121,865,317.107 85.916

AGAINST 10,962,650.857 7.728

ABSTAIN 9,015,160.431 6.356

TOTAL 141,843,128.395 100.000

BROKER NON-VOTES 890,584.000

# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 28,363,130.559 83.697

AGAINST 4,847,639.585 14.305

ABSTAIN 676,924.274 1.998

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 4
To amend the Declaration of Trust to eliminate the notification
requirement regarding the appointment of Trustees.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 121,401,125.939 85.588

AGAINST 10,557,263.759 7.443

ABSTAIN 9,884,738.697 6.969

TOTAL 141,843,128.395 100.000

BROKER NON-VOTES 890,584.000

PROPOSAL 5
To amend the Declaration of Trust to clarify that the Trustees may
authorize the investment of all of a fund's assets in another open-end
investment company with substantially the same investment objectives
and policies.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 118,484,070.068 83.532

AGAINST 13,125,326.708 9.253

ABSTAIN 10,233,731.619 7.215

TOTAL 141,843,128.395 100.000

BROKER NON-VOTES 890,584.000

PROPOSAL 6
To adopt a new fundamental investment policy for the fund that would
permit it to invest all of its assets in another open-end investment
company managed by FMR or an affiliate with substantially the same
investment objective and policies.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 30,477,249.360 89.936

AGAINST 2,577,251.676 7.605

ABSTAIN 833,193.382 2.459

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 7
To amend the fundamental investment limitation concerning the sale and
purchase of real estate.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 30,231,092.748 89.210

AGAINST 2,341,708.682 6.910

ABSTAIN 1,314,892.988 3.880

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 8
To amend the fundamental investment limitation concerning borrowing.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 30,070,443.891 88.736

AGAINST 2,525,921.999 7.453

ABSTAIN 1,291,328.528 3.811

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 9
To amend the fundamental investment limitation regarding the purchase
and sale of commodities.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 30,055,908.690 88.693

AGAINST 2,527,997.059 7.460

ABSTAIN 1,303,788.669 3.847

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 10
To amend the fundamental investment limitation concerning
diversification to exclude securities of other investment companies
from the limitation.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 31,638,747.280 93.364

AGAINST 977,400.541 2.884

ABSTAIN 1,271,546.597 3.752

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 11
To amend the fundamental investment limitation concerning the issuance
of senior securities.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 30,836,217.801 90.995

AGAINST 1,751,017.294 5.167

ABSTAIN 1,300,459.323 3.838

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 12
To eliminate the fundamental investment limitation concerning short
sales of securities.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 25,070,658.411 73.982

AGAINST 7,869,490.854 23.222

ABSTAIN 947,545.153 2.796

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 13
To eliminate the fundamental investment limitation concerning margin
purchases.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 25,007,942.627 73.797

AGAINST 7,932,547.982 23.408

ABSTAIN 947,203.809 2.795

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 14
To amend the fundamental investment limitation concerning lending.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 28,314,613.453 83.554

AGAINST 4,258,528.509 12.567

ABSTAIN 1,314,552.456 3.879

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

PROPOSAL 15
To amend the fundamental investment limitation concerning the
concentration of its investments in a single industry.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
AFFIRMATIVE 29,686,996.252 87.604

AGAINST 2,937,913.800 8.670

ABSTAIN 1,262,784.366 3.726

TOTAL 33,887,694.418 100.000

BROKER NON-VOTES 250.000

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
Fred L. Henning, Jr., VICE PRESIDENT
Dwight D. Churchill, VICE PRESIDENT
Christine J. Thompson, VICE PRESIDENT
Arthur S. Loring, SECRETARY
Richard A. Silver, TREASURER
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
* INDEPENDENT TRUSTEES