(REGISTERED TRADEMARK)
SPARTAN(registered trademark)
U.S. EQUITY INDEX
FUND
SEMIANNUAL REPORT
AUGUST 31, 1997
UEI-SANN-1097-01
43016
CONTENTS
<TABLE>
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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
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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
HEALTH 10.2 10.4
NONDURABLES 10.1 11.2
ENERGY 8.8 8.1
UTILITIES 8.3 9.7
INDUSTRIAL MACHINERY & EQUIPMENT 5.7 5.1
BASIC INDUSTRIES 5.5 5.5
RETAIL & WHOLESALE 4.7 4.2
MEDIA & LEISURE 3.8 3.7
</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 - 2.3%
AEROSPACE & DEFENSE - 1.9%
AlliedSignal, Inc. 337,358 $ 27,853
Boeing Co. 1,184,881 64,502
Lockheed Martin Corp. 230,166 23,866
Rockwell International Corp. 254,148 15,249
Textron, Inc. 196,766 12,261
United Technologies Corp. 282,606 22,061
165,792
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 195,314
BASIC INDUSTRIES - 5.5%
CHEMICALS & PLASTICS - 2.7%
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
Union Carbide Corp. 149,529 7,673
W.R. Grace & Co. 86,680 5,965
238,036
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 - 0.4%
Ball Corp. 36,138 1,188
Bemis Co., Inc. 63,220 2,778
Corning, Inc. 273,676 14,471
Crown Cork & Seal Co., Inc. 153,190 7,793
Owens-Illinois, Inc. 166,600 5,800
Tupperware Corp. 73,357 2,462
34,492
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 474,262
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 - 0.0%
Centex Corp. 34,538 1,878
Fleetwood Enterprises, Inc. 42,468 1,322
Kaufman & Broad Home Corp. 46,254 925
Pulte Corp. 25,028 917
5,042
ENGINEERING - 0.1%
EG&G, Inc. 54,942 1,167
Fluor Corp. 100,198 5,623
Foster Wheeler Corp. 48,539 2,218
9,008
TOTAL CONSTRUCTION & REAL ESTATE 36,558
DURABLES - 3.7%
AUTOS, TIRES, & ACCESSORIES - 2.6%
AutoZone, Inc. (a) 179,800 5,079
Chrysler Corp. 820,140 28,806
Cooper Tire & Rubber Co. 93,843 2,358
Cummins Engine Co., Inc. 45,610 3,509
Dana Corp. 123,118 5,671
Eaton Corp. 92,122 8,297
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
Johnson Controls, Inc. 99,840 4,761
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
Snap-On Tools Corp. 72,716 3,054
TRW, Inc. 148,952 7,764
219,478
CONSUMER DURABLES - 0.5%
Minnesota Mining & Manufacturing Co. 496,277 44,603
CONSUMER ELECTRONICS - 0.2%
Black & Decker Corp. 112,480 4,309
Maytag Co. 116,429 3,194
Newell Co. 189,730 7,471
Whirlpool Corp. 88,733 5,080
20,054
SHARES VALUE (NOTE 1)
(000S)
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 321,261
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 - 7.1%
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
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
616,446
CREDIT & OTHER FINANCE - 1.6%
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
Fleet Financial Group, Inc. 254,470 16,398
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
140,026
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 - 10.2%
DRUGS & PHARMACEUTICALS - 6.5%
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
Sigma Aldrich Corp. 119,264 3,891
Warner-Lambert Co. 323,430 41,096
561,175
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 878,384
HOLDING COMPANIES - 0.2%
CINergy Corp. 187,927 6,213
Norfolk Southern Corp. 149,481 14,649
20,862
INDUSTRIAL MACHINERY & EQUIPMENT - 5.7%
ELECTRICAL EQUIPMENT - 3.8%
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
Scientific-Atlanta, Inc. 92,378 2,009
Westinghouse Electric Corp. 757,655 19,509
321,809
INDUSTRIAL MACHINERY & EQUIPMENT - 1.6%
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
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
Stanley Works 90,786 3,864
Tenneco, Inc. 204,087 9,911
Timken Co. 74,566 2,792
Tyco International Ltd. 290,986 22,824
138,205
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 487,550
MEDIA & LEISURE - 3.8%
BROADCASTING - 0.2%
Clear Channel Communications, Inc. 104,200 7,079
TCI Group Class A 791,925 13,859
20,938
ENTERTAINMENT - 0.9%
Disney (Walt) Co. 804,997 61,833
King World Productions, Inc. 44,488 1,768
Viacom, Inc. Class B (non-vtg.) (a) 420,379 12,454
76,055
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 - 1.5%
American Greetings Corp. Class A 89,521 3,111
Cognizant Corp. 199,601 8,383
Dow Jones & Co., Inc. 114,057 4,883
Dun & Bradstreet Corp. 204,001 5,712
Gannett Co., Inc. 168,711 16,439
Harcourt General, Inc. 84,230 4,006
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
Time Warner, Inc. 666,456 34,323
Tribune Co. 146,284 7,232
U.S. West Media Group 723,079 14,462
124,427
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 327,318
NONDURABLES - 10.1%
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 - 2.2%
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 - 2.9%
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
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
254,214
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 882,457
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
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
214,831
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 400,984
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
Ecolab, Inc. 77,427 3,489
Jostens, Inc. 46,297 1,117
National Service Industries, Inc. 53,913 2,385
Service Corp. International 285,552 9,138
20,999
TOTAL SERVICES 44,284
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
Tektronix, Inc. 39,595 2,200
Thermo Electron Corp. (a) 179,000 7,205
33,652
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 1,312,450
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 - 8.3%
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 - 5.3%
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
WorldCom, Inc. (a) 1,064,600 31,872
456,667
TOTAL UTILITIES 716,262
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
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
