SUPPLEMENT TO THE
SPARTAN(registered trademark) TOTAL MARKET INDEX FUND,
SPARTAN EXTENDED MARKET INDEX FUND, AND
SPARTAN INTERNATIONAL INDEX FUND
FUNDS OF FIDELITY CONCORD STREET TRUST
APRIL 21, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "INVESTMENT LIMITATIONS OF SPARTAN TOTAL MARKET INDEX FUND" IN
THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "INVESTMENT LIMITATIONS OF SPARTAN EXTENDED MARKET INDEX FUND"
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE
3.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "INVESTMENT LIMITATIONS OF SPARTAN INTERNATIONAL INDEX FUND"
IN THE "INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE
4.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES THE NINTH PARAGRAPH FOUND IN THE
"PORTFOLIO TRANSACTIONS" SECTION BEGINNING ON PAGE 28.
To the extent permitted by applicable law, BT is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. BT may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., and BT Brokerage
Corporation and BT Futures Corp., indirect subsidiaries of Deutsche
Bank AG, if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to December 9, 1997, FMR used research
services provided by and placed agency transactions with Fidelity
Brokerage Services (FBS), an indirect subsidiary of FMR Corp.
SHARES OF EACH FUND PURCHASED AFTER APRIL 28, 1999 WILL NO LONGER BE
SUBJECT TO A PURCHASE FEE. HOWEVER, EACH FUND WILL DEDUCT A SHORT-TERM
TRADING FEE OF 0.50% FOR SPARTAN TOTAL MARKET INDEX FUND, 0.75% FOR
SPARTAN EXTENDED MARKET INDEX FUND, OR 1.00% FOR SPARTAN INTERNATIONAL
INDEX FUND, FROM THE REDEMPTION AMOUNT IF YOU SELL SHARES PURCHASED
AFTER APRIL 28, 1999 AFTER HOLDING THEM FOR LESS THAN 90 DAYS.
EFFECTIVE APRIL 29, 1999, THE FOLLOWING INFORMATION REPLACES THE THIRD
PARAGRAPH FOUND IN THE "PERFORMANCE" SECTION ON PAGE 31.
In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple changes in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's short-term trading fee or
index account fee. Excluding a fund's short-term trading fee or index
account fee from a return calculation produces a higher return figure.
Returns and other performance information may be quoted numerically or
in a table, graph, or similar information.
EFFECTIVE APRIL 29, 1999, THE FOLLOWING INFORMATION REPLACES SIMILAR
INFORMATION FOUND IN THE "PERFORMANCE" SECTION ON PAGE 32.
CALCULATING HISTORICAL FUND RESULTS. The following table shows
performance for each fund. For Spartan Total Market Index Fund,
Spartan Extended Market Index Fund, and Spartan International Index
Fund, returns do not include the effect of each fund's 0.50%, 0.75% or
1.00%, respectively, short-term trading fee, applicable to shares held
less than 90 days.
HISTORICAL FUND RESULTS. The following table shows each fund's
performance for the fiscal periods ended 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Average Annual Returns Cumulative Returns
One Year Life of Fund* One Year Life of Fund*
Spartan Total Market Index Fund 14.61% 20.48% 14.61% 27.77%
Spartan Extended Market Index -1.33% 4.50% -1.33% 5.96%
Fund
Spartan International Index 6.58% 13.50% 6.58% 18.12%
Fund
</TABLE>
* From November 5, 1997 (commencement of operations).
EFFECTIVE APRIL 29, 1999, THE FOLLOWING INFORMATION REPLACES SIMILAR
INFORMATION FOUND IN THE "PERFORMANCE" SECTION BEGINNING ON PAGE 31.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the life of each fund, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments (with the exception of foreign tax withholdings)
have not been factored into the figures below.
During the period from November 5, 1997 (commencement of operations)
to February 28, 1999, a hypothetical $10,000 investment in Spartan
Total Market Index Fund would have grown to $12,777.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SPARTAN TOTAL MARKET INDEX FUND
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 12,520 $ 138 $ 119 $ 12,777
1998* $ 11,112 $ 36 $ 0 $ 11,148
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPARTAN TOTAL MARKET INDEX FUND INDEXES
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 13,397 $ 12,368 $ 10,179
1998* $ 11,189 $ 11,168 $ 10,019
</TABLE>
* From November 5, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Spartan
Total Market Index on November 5, 1997, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $10,238. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $124 for dividends and $112 for capital gain
distributions. The fund did not distribute any capital gains during
the period. The figures in the table do not include the effect of the
fund's 0.50% purchase fee (which was in effect during the period
November 5, 1997 through April 28, 1999) or its 0.50% short-term
trading fee applicable to shares purchased after April 28, 1999 and
held less than 90 days.
During the period from November 5, 1997 (commencement of operations)
to February 28, 1999, a hypothetical $10,000 investment in Spartan
Extended Market Index Fund would have grown to $10,596.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SPARTAN EXTENDED MARKET INDEX
FUND
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 10,268 $ 119 $ 209 $ 10,596
1998* $ 10,708 $ 30 $ 0 $ 10,738
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPARTAN EXTENDED MARKET INDEX INDEXES
FUND
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 13,397 $ 12,368 $ 10,179
1998* $ 11,189 $ 11,168 $ 10,019
</TABLE>
* From November 5, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Spartan
Extended Market Index on November 5, 1997, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $10,326. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $116 for dividends and $208 for capital gain
distributions. The fund did not distribute any capital gains during
the period. The figures in the table do not include the effect of the
fund's 0.75% purchase fee (which was in effect during the period
November 5, 1997 through April 28, 1999) or its 0.75% short-term
trading fee applicable to shares purchased after April 28, 1999 and
held less than 90 days.
During the period from November 5, 1997 (commencement of operations)
to February 28, 1999, a hypothetical $10,000 investment in Spartan
International Index Fund would have grown to $11,812.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SPARTAN INTERNATIONAL INDEX
Fiscal Year Ended Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value
Investment Distributions Gain Distributions
1999 $ 11,536 $ 223 $ 53 $ 11,812
1998* $ 11,056 $ 27 $ 0 $ 11,083
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SPARTAN INTERNATIONAL INDEX INDEXES
Fiscal Year Ended S&P 500 DJIA Cost of Living**
1999 $ 13,397 $ 12,368 $ 10,179
1998* $ 11,189 $ 11,168 $ 10,019
</TABLE>
* From November 5, 1997 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Spartan
International Index on November 5, 1997, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their cash value at the
time they were reinvested) amounted to $10,270. If distributions had
not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments for the period
would have amounted to $216 for dividends and $52 for capital gain
distributions. The fund did not distribute any capital gains during
the period. The figures in the table do not include the effect of the
fund's 1.00% purchase fee (which was in effect during the period
November 5, 1997 through April 28, 1999) or its 1.00% short-term
trading fee applicable to shares purchased after April 28, 1999 and
held less than 90 days.
THE FOLLOWING INFORMATION REPLACES THE SIXTH PARAGRAPH UNDER THE
HEADING "PERFORMANCE COMPARISONS" IN THE "PERFORMANCE" SECTION ON PAGE
34.
Spartan International Index may compare its performance to that of its
index the EAFE, a market capitalization-weighted index that is
designed to represent the performance of developed stock markets
outside the United States and Canada. As of February 28, 1999, the
index included over 1,000 equity securities of companies domiciled in
20 countries. Spartan International Index may also compare its
performance to the Standard & Poor's 500 Index, a market
capitalization-weighted index of common stocks. The index returns for
the EAFE for the periods after January 1, 1997, may be adjusted for
tax withholding rates applicable to U.S.-based mutual funds organized
as Massachusetts business trusts. Effective October 1, 1998, the
country of Malaysia was removed from this index. The index returns
reflect the inclusion of Malaysia prior to October 1, 1998. The
performance of these indexes over any period since their inception may
be quoted in fund advertising. Stocks are selected for the Morgan
Stanley Capital International (MSCI) index on the basis of industry
representation, liquidity, sufficient float, and avoidance of
cross-ownership.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH UNDER THE
HEADING "ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION"
SECTION ON PAGE 35.
If FMR determines that it is in the best interests of the fund, a fund
may make redemption payments in whole or in part in readily marketable
securities or other property, valued for this purpose as they are
valued in computing each fund's NAV. A fund may make redemption
payments "in kind" to a shareholder that owns 5% or more of its
outstanding voting securities pursuant to an exemptive order issued by
the SEC. Shareholders that receive securities or other property on
redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
THE FOLLOWING INFORMATION REPLACES THE SECOND PARAGRAPH FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 35.
Each fund, in its discretion, may determine to issue its shares "in
kind" in exchange for securities held by the purchaser having a value,
determined in accordance with the fund's policies for valuation of
portfolio securities, equal to the purchase price of the fund shares
issued. A fund will accept for in kind purchases only securities or
other instruments that are appropriate under its investment objective
and policies. In addition, a fund generally will not accept securities
of any issuer unless they are liquid, have a readily ascertainable
market value, and are not subject to restrictions on resale. All
dividends, distributions, and subscription or other rights associated
with the securities become the property of the fund, along with the
securities. Shares purchased in exchange for securities in kind
generally cannot be redeemed for fifteen days following the exchange
in order to allow time for the transfer to settle.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 36.
The Trustees, Members of the Advisory Board, and executive officers of
the trust are listed below. The Board of Trustees governs each fund
and is responsible for protecting the interests of shareholders. The
Trustees are experienced executives who meet periodically throughout
the year to oversee each fund's activities, review contractual
arrangements with companies that provide services to each fund, and
review each fund's performance. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR or its affiliates. The business address of each
Trustee, Member of the Advisory Board, and officer who is an
"interested person" (as defined in the 1940 Act) is 82 Devonshire
Street, Boston, Massachusetts 02109, which is also the address of FMR.
The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with the trust, FMR or BT are indicated by an asterisk (*).
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 36.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and
replacement products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 36.
NED C. LAUTENBACH (55), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 36.
LEONARD M. RUSH (53), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION SUPPLEMENTS SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 36.
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 36.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended February 28, 1999, or
calendar year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees and Members of the Aggregate Compensation from Aggregate Compensation from Aggregate Compensation from
Advisory Board Spartan Total Market Index Spartan Extended Market Spartan International Index
FundB Index FundB FundB
Edward C. Johnson 3d** $ 0 $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0 $ 0
Ralph F. Cox $ 29 $ 16 $ 11
Phyllis Burke Davis $ 29 $ 16 $ 11
Robert M. Gates $ 29 $ 16 $ 11
E. Bradley Jones**** $ 29 $ 16 $ 11
Donald J. Kirk $ 29 $ 16 $ 11
Ned C. Lautenbach*** $ 0 $ 0 $ 0
Peter S. Lynch** $ 0 $ 0 $ 0
William O. McCoy $ 29 $ 16 $ 11
Gerald C. McDonough $ 36 $ 20 $ 14
Marvin L. Mann $ 29 $ 16 $ 11
Robert C. Pozen** $ 0 $ 0 $ 0
Thomas R. Williams $ 29 $ 16 $ 11
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustees and Members of the Total Compensation from the
Advisory Board Fund Complex*A
Edward C. Johnson 3d** $ 0
Abigail P. Johnson** $ 0
J. Gary Burkhead** $ 0
Ralph F. Cox $ 223,500
Phyllis Burke Davis $ 220,500
Robert M. Gates $ 223,500
E. Bradley Jones**** $ 222,000
Donald J. Kirk $ 226,500
Ned C. Lautenbach*** $ 0
Peter S. Lynch** $ 0
William O. McCoy $ 223,500
Gerald C. McDonough $ 273,500
Marvin L. Mann $ 220,500
Robert C. Pozen** $ 0
Thomas R. Williams $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the funds, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** During the period from October 14, 1999 through December 31,
1999, Mr. Lautenbach served as a Member of the Advisory Board.
Effective January 1, 2000, Mr. Lautenbach serves as a Member of the
Board of Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash.
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH FOUND IN THE
"CONTROL OF INVESTMENT ADVISER" SECTION BEGINNING ON PAGE 39.
BT, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly owned subsidiary
of Deutsche Bank AG, whose principal offices are at Taunusanlage 12,
D-60325 Frankfurt am Main, Federal Republic of Germany. Deutsche Bank
AG is a major global banking institution that is engaged in a wide
range of financial services, including investment management, mutual
funds, retail and commercial banking, investment banking and
insurance.
THE FOLLOWING INFORMATION REPLACES THE THIRD PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY SERVICES" IN THE "MANAGEMENT
CONTRACTS" SECTION ON PAGE 39.
BT is the sub-adviser of each fund and acts as each fund's custodian.
Under its management contract with each fund, FMR acts as investment
adviser. Under its sub-advisory agreements, and subject to the
supervision of the Board of Trustees, BT directs the investments of
each fund in accordance with its investment objective, policies and
limitations, and provides custodial services to each fund.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT-RELATED EXPENSES" IN THE "MANAGEMENT CONTRACTS"
SECTION ON PAGE 40.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, and pricing and bookkeeping agent, and
the costs associated with securities lending, each fund pays all of
its expenses that are not assumed by those parties. Each fund pays for
the typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the auditor and
non-interested Trustees. Each fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by each fund include interest, taxes, brokerage commissions, the
fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under
federal securities laws and making necessary filings under state
securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the
fund may be a party, and any obligation it may have to indemnify its
officers and Trustees with respect to litigation.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY FEES" IN THE "MANAGEMENT
CONTRACTS" SECTION ON PAGE 40.
MANAGEMENT FEE. For the services of FMR under each management
contract, Spartan Total Market Index Fund, Spartan Extended Market
Index Fund, and Spartan International Index Fund each pays FMR a
monthly management fee at the annual rate of 0.24%, 0.24%, and 0.34%,
respectively, of its average net assets throughout the month.
THE FOLLOWING INFORMATION REPLACES THE SECOND AND THIRD PARAGRAPHS
FOUND UNDER THE HEADING "SUB-ADVISER" IN THE "MANAGEMENT CONTRACTS"
SECTION ON PAGE 40.
Under the sub-advisory agreements, for providing investment management
and custodial services to Spartan Total Market Index Fund and Spartan
Extended Market Index Fund, FMR pays BT fees at an annual rate of
0.0125% of the average net assets of each fund.
Under the sub-advisory agreement, for providing investment management
and custodial services to Spartan International Index Fund, FMR pays
BT fees at an annual rate of 0.0650% of the average net assets of the
fund, plus fees of $35 per portfolio transaction (up to a maximum of
$200,000 annually).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "SUB-ADVISER"IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE 40.
The following table shows the amount of management fees paid by each
fund to FMR, sub-advisory fees paid by each fund to BT and fees paid
by FMR to BT for the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended February 28 Management Fees Paid to FMR Sub-Advisory Fees Paid to BT
Spartan Total Market Index Fund 1999 $ 237,120 $ 22,253
1998* $ 16,488 $ 283
Spartan Extended Market Index 1999 $ 118,445 $ 30,583
Fund
1998* $ 17,265 $ 917
Spartan International Index 1999 $ 115,955 $ 2,632
Fund
1998* $ 23,400 $ 76
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Fund Sub-Advisory Fees Paid to BT
by FMR
Spartan Total Market Index Fund $ 12,275
$ 859
Spartan Extended Market Index $ 6,104
Fund
$ 899
Spartan International Index $ 85,284
Fund
$ 33,979
</TABLE>
* From November 5, 1997 (commencement of operations).
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER THE
HEADING "SUB-ADVISER" IN THE "MANAGEMENT CONTRACTS" SECTION ON PAGE
40.
Prior to October 1, 1999, Spartan Total Market Index Fund, Spartan
Extended Market Index Fund, and Spartan International Index Fund each
paid a management fee at an annual rate of 0.24%, 0.24%, and 0.34%,
respectively, of its average net assets to FMR and a sub-advisory fee
(representing 40% of net income from securities lending) to BT.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 40.
MANAGEMENT-RELATED SERVICES. Each fund has also entered into a
securities lending agreement with BT. Under the terms of the
agreements, BT retains up to 30% of aggregate annual lending revenues
for providing securities lending services.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 40.
FMR may, from time to time, voluntarily reimburse all or a portion of
a fund's operating expenses (exclusive of interest, taxes, securities
lending costs, brokerage commissions, and extraordinary expenses), in
the case of certain funds, which is subject to revision or
termination. FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
THE FOLLOWING INFORMATION REPLACES THE FIFTH PARAGRAPH FOUND IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 42.
In addition, FSC receives the pro rata portion of the transfer agency
fees applicable to shareholder accounts in a qualified state tuition
program (QSTP), as defined under the Small Business Job Protection Act
of 1996, managed by FMR or an affiliate and each Fidelity Freedom Fund
and Fidelity Four-in-One Index Fund, funds of funds managed by an FMR
affiliate, according to the percentage of the QSTP's, Freedom Fund's
or Fidelity Four-in-One Index Fund's assets that are invested in a
fund, subject to certain limitations in the case of Fidelity
Four-in-One Index Fund.
SUPPLEMENT TO THE
FIDELITY U.S. BOND INDEX FUND
APRIL 21, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH FOUND IN THE
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" SECTION ON
PAGE 14.
If FMR determines that it is in the best interests of the fund, the
fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing the fund's NAV. Shareholders that receive
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 14.
NED C. LAUTENBACH (55), Trustee (2000) , has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an
employee(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as
Director of Compliance for MFS Investment Management.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 15.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and
replacement products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
LEONARD M. RUSH (53), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION REPLACES THE "COMPENSATION TABLE" FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION ON PAGE 17.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended February 28, 1999, or
calendar year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board U.S. Bond IndexB Fund Complex*,A
Edward C. Johnson 3d** $ 0 $ 0
Abigail P. Johnson** $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0
Ralph F. Cox $ 353 $ 223,500
Phyllis Burke Davis $ 348 $ 220,500
Robert M. Gates $ 353 $ 223,500
E. Bradley Jones**** $ 351 $ 222,000
Donald J. Kirk $ 355 $ 226,500
Ned C. Lautenbach*** $ 0 $ 0
Peter S. Lynch ** $ 0 $ 0
William O. McCoy $ 353 $ 223,500
Gerald C. McDonough $ 432 $ 273,500
Marvin L. Mann $ 353 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 353 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** During the period from October 14, 1999 through December 31,
1999, Mr. Lautenbach served as a Member of the Advisory Board.
Effective January 1, 2000, Mr. Lautenbach serves as a Member of the
Board of Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION BEGINNING ON PAGE 19.
In addition, FIIOC receives the pro rata portion of the transfer
agency fees applicable to shareholder accounts in Fidelity Four-in-One
Index Fund, a fund of funds managed by an FMR affiliate, according to
the percentage of Fidelity Four-in-One Index Fund's assets that is
invested in the fund.
SUPPLEMENT TO THE
SPARTAN(registered trademark) U.S. EQUITY INDEX FUND
A FUND OF FIDELITY CONCORD STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
APRIL 21, 1999
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION REPLACES THE NINTH PARAGRAPH FOUND IN THE
"PORTFOLIO TRANSACTIONS" SECTION BEGINNING ON PAGE 10.
To the extent permitted by applicable law, BT is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. BT may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., and BT Brokerage
Corporation and BT Futures Corp., indirect subsidiaries of Deutsche
Bank AG, if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. Prior to December 9, 1997, FMR used research
services provided by and placed agency transactions with Fidelity
Brokerage Services (FBS), an indirect subsidiary of FMR Corp.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" ON
PAGE 15.
If FMR determines that it is in the best interests of the fund, the
fund may make redemption payments in whole or in part in readily
marketable securities or other property, valued for this purpose as
they are valued in computing the fund's NAV. The fund may make
redemption payments "in kind" to a shareholder that owns 5% or more of
its outstanding voting securities pursuant to an exemptive order
issued by the SEC. Shareholders that receive securities or other
property on redemption may realize a gain or loss for tax purposes,
and will incur any costs of sale, as well as the associated
inconveniences.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 15.
*ABIGAIL P. JOHNSON (37), Member of the Advisory Board of Fidelity
Concord Street Trust (1999), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 15.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and
replacement products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc. (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
LEONARD M. RUSH (53), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION SUPPLEMENTS THE SIMILAR INFORMATION
FOUND IN THE "TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 15.
NED C. LAUTENBACH (55), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH FOUND IN THE
"CONTROL OF INVESTMENT ADVISER" SECTION BEGINNING ON PAGE 18.
BT, a New York banking corporation with principal offices at 130
Liberty Street, New York, New York 10006, is a wholly owned subsidiary
of Deutsche Bank AG (effective June 4, 1999), whose principal offices
are Taunusanlage 12, D-60325 Frankfurt am Main, Federal Republic of
Germany. Deutsche Bank AG is a major global banking institution that
is engaged in a wide range of financial services, including investment
management, mutual funds, retail and commercial banking, investment
banking and insurance.
THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 18.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended February 28, 1999, or
calendar year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board Spartan U.S. Equity IndexB,C,D Fund Complex*,A
Edward C. Johnson 3d** $ 0 $ 0
Abigail P. Johnson 3d** $ 0 $ 0
J. Gary Burkhead** $ 0 $ 0
Ralph F. Cox $ 4,382 $ 223,500
Phyllis Burke Davis $ 4,323 $ 220,500
Robert M. Gates $ 4,381 $ 223,500
E. Bradley Jones**** $ 4,351 $ 222,000
Donald J. Kirk $ 4,408 $ 226,500
Peter S. Lynch** $ 0 $ 0
Ned C. Lautenbach*** $ 0 $ 0
William O. McCoy $ 4,381 $ 223,500
Gerald C. McDonough $ 5,362 $ 273,500
Marvin L. Mann $ 4,381 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 4,381 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund, Ms. Johnson and Mr. Burkhead are
compensated by FMR.
*** During the period from October 14, 1999 through December 31,
1999, Mr. Lautenbach served as a Member of the Advisory Board.
Effective January 1, 2000, Mr. Lautenbach serves as a Member of the
Board of Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $1,973; Phyllis Burke Davis,
$1,973; Robert M. Gates, $1,973; E. Bradley Jones, $1,973; Donald J.
Kirk, $1,973; William O. McCoy, $1,973; Gerald C. McDonough, $2,302;
Marvin L. Mann, $1,973; and Thomas R. Williams, $1,973.
D Certain of the non-interested Trustees' aggregate compensation from
the fund includes accrued voluntary deferred compensation as follows:
Ralph F. Cox, $1,671; Marvin L. Mann, $1,375; William O. McCoy,
$1,671; and Thomas R. Williams, $1,671.
THE FOLLOWING INFORMATION REPLACES THE THIRD PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY SERVICES" IN THE "MANAGEMENT
CONTRACT" SECTION ON PAGE 19.
BT is the sub-adviser of the fund and acts as the fund's custodian.
Under its management contract with the fund, FMR acts as investment
adviser. Under the sub-advisory agreement, and subject to the
supervision of the Board of Trustees, BT directs the investments of
the fund in accordance with its investment objective, policies and
limitations, and provides custodial services to the fund.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT-RELATED EXPENSES" IN THE "MANAGEMENT CONTRACT"
SECTION ON PAGE 19.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, and pricing and bookkeeping agent, and
the costs associated with securities lending, the fund pays all of its
expenses that are not assumed by those parties. The fund pays for the
typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the auditor and
non-interested Trustees. The fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of the fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by the fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. The fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
THE FOLLOWING INFORMATION REPLACES THE PARAGRAPH FOUND UNDER THE
HEADING "MANAGEMENT AND SUB-ADVISORY FEES" IN THE "MANAGEMENT
CONTRACT" SECTION ON PAGE 19.
MANAGEMENT FEE. For the services of FMR under the management contract,
the fund pays FMR a monthly management fee at the annual rate of 0.24%
of the fund's average net assets throughout the month.
THE FOLLOWING INFORMATION REPLACES THE SECOND, THIRD, AND FOURTH
PARAGRAPHS FOUND UNDER THE HEADING "SUB-ADVISER" IN THE "MANAGEMENT
CONTRACT" SECTION BEGINNING ON PAGE 19.
Under the sub-advisory agreement, for providing investment management
and custodial services to the fund, FMR pays BT fees at an annual rate
of 0.006% of the average net assets of the fund.
For the fiscal years ended Fiscal Year End 1, 1999, 1998, and 1997,
the fund paid FMR management fees of $31,457,000, $23,054,000, and
$14,132,000, respectively. For the fiscal year ended February 28,
1999, and for the period from December 5, 1997 to February 28, 1998,
the fund paid BT sub-advisory fees of $380,000 and $4,000,
respectively. Prior to October 1, 1999, the fund paid a management fee
at an annual rate of 0.24% of its average net assets to FMR and a
sub-advisory fee (representing 40% of net income from securities
lending) to BT.
For the fiscal year ended February 28, 1999, and for the fiscal period
from December 5, 1997 to February 28, 1998, FMR paid BT fees of
$775,210 and $142,480, respectively.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 20.
MANAGEMENT-RELATED SERVICES. The fund has also entered into a
securities lending agreement with BT. Under the terms of the
agreement, BT retains up to 30% of aggregate annual lending revenues
for providing securities lending services.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACT" SECTION ON PAGE 20.
FMR may, from time to time, voluntarily reimburse all or a portion of
the fund's operating expenses (exclusive of interest, taxes,
securities lending costs, brokerage commissions, and extraordinary
expenses). FMR retains the ability to be repaid for these expense
reimbursements in the amount that expenses fall below the limit prior
to the end of the fiscal year.
THE FOLLOWING INFORMATION REPLACES THE FIFTH PARAGRAPH FOUND IN THE
"TRANSFER AND SERVICE AGENT AGREEMENTS" SECTION ON PAGE 21.
The fund has also entered into a service agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreement, FSC calculates the
NAV and dividends for the fund and maintains the fund's portfolio and
general accounting records.
