FIDELITY
(REGISTERED TRADEMARK)
TARGET TIMELINE
SM
FUNDS - 1999, 2001, 2003
SEMIANNUAL REPORT
JANUARY 31, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUNDS HAVE DONE OVER TIME.
FUND TALK 15 THE MANAGER'S REVIEW OF THE FUNDS'
PERFORMANCE, STRATEGY AND OUTLOOK.
TARGET TIMELINE 1999 18 INVESTMENT CHANGES
19 INVESTMENTS
24 FINANCIAL STATEMENTS
TARGET TIMELINE 2001 28 INVESTMENT CHANGES
29 INVESTMENTS
33 FINANCIAL STATEMENTS
TARGET TIMELINE 2003 37 INVESTMENT CHANGES
38 INVESTMENTS
42 FINANCIAL STATEMENTS
NOTES 46 NOTES TO THE FINANCIAL STATEMENTS.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUNDS 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 FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
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, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
As we entered 1998, the pesky economic and currency crises in
Southeast Asia were still very much with us. Adding to these concerns
was the possibility that U.S. corporate earnings might decline in the
face of lower global product demand. But the news wasn't all bad as
low inflation, low interest rates and moderate economic growth
continued to prevail. The bond market performed well, as it benefited
from the favorable economic backdrop and a "flight-to-safety"
mentality on the part of stock investors.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you the
information you need to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
FIDELITY TARGET TIMELINE 1999
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 $10,000
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). You can also look at a fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain expenses, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY TARGET TIMELINE 1999 3.50% 7.37% 10.18%
LB AGGREGATE BOND 4.90% 10.72% 14.49%
U.S. TREASURY STRIPS (8/15/99 AND 11/15/99) 3.53% 7.27% 10.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on February 8, 1996. 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 return to
the Lehman Brothers Aggregate Bond Index - a market value weighted
performance benchmark for investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed
securities, with maturities of at least one year. You can also compare
the fund to the average of the total returns of U.S. Treasury STRIPS
maturing on 8/15/99 and 11/15/99, which reflects the performance of
zero-coupon bonds with maturities similar to the fund's. These
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY TARGET TIMELINE 1999 7.37% 5.02%
LB AGGREGATE BOND 10.72% 7.07%
U.S. TREASURY STRIPS (8/15/99 AND 11/15/99) 7.27% 4.96%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show what would have happened if the fund performed at a constant rate
each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980224 080105 S00000000000001
Target Timeline 1999 Avg US TreasStrip 1999
LB Aggregate Bond
00379 F0092
LB001
1996/02/08 10000.00 10000.00
10000.00
1996/02/29 9843.43 9854.02
9839.53
1996/03/31 9769.72 9772.31
9771.14
1996/04/30 9723.18 9719.40
9716.19
1996/05/31 9708.18 9698.92
9696.46
1996/06/30 9814.54 9801.69
9826.67
1996/07/31 9841.86 9838.95
9853.56
1996/08/31 9849.03 9846.73
9837.05
1996/09/30 9980.40 9972.89
10008.48
1996/10/31 10147.46 10138.67
10230.18
1996/11/30 10271.38 10254.06
10405.41
1996/12/31 10218.33 10216.80
10308.66
1997/01/31 10261.47 10260.67
10340.23
1997/02/28 10277.69 10275.66
10365.95
1997/03/31 10245.55 10237.18
10251.08
1997/04/30 10340.73 10334.51
10404.53
1997/05/31 10416.89 10413.21
10502.89
1997/06/30 10502.40 10491.90
10627.55
1997/07/31 10645.36 10631.33
10914.14
1997/08/31 10644.63 10629.48
10821.04
1997/09/30 10731.20 10717.82
10980.64
1997/10/31 10820.68 10806.15
11139.93
1997/11/30 10840.11 10824.79
11191.23
1997/12/31 10906.08 10898.70
11303.91
1998/01/30 11018.13 11006.86
11449.03
IMATRL PRASUN SHR__CHT 19980131 19980224 080107 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Target Timeline 1999 on February 8, 1996, when
the fund started. As the chart shows, by January 31, 1998, the value
of the investment would be $11,018 - a 10.18% increase on the initial
investment. For comparison, look at how the Lehman Brothers Aggregate
Bond Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would be $11,449 - a
14.49% increase. If $10,000 was put in U.S. Treasury STRIPS (8/15/99
and 11/15/99), it would be valued at $11,007 - a 10.07% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN
RIDE OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
TOTAL RETURN COMPONENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, JULY 31, (COMMENCEMENT
1998 1997 OF OPERATIONS) TO
JULY 31,
1996
DIVIDEND RETURN 3.71% 7.64% 3.12%
CAPITAL APPRECIATION RETURN -0.21% 0.52% -4.70%
TOTAL RETURN 3.50% 8.16% -1.58%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the fund. A capital appreciation return reflects both the
amount paid by the fund to shareholders as capital gain distributions
and changes in the fund's share price. Both returns assume the
dividends or gains are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED JANUARY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 5.78(CENTS) 34.92(CENTS) 69.95(CENTS)
ANNUALIZED DIVIDEND RATE 7.12% 7.26% 7.34%
30-DAY ANNUALIZED YIELD 5.53% - -
DIVIDENDS per share show the income paid by the fund for a set period.
The annualized dividend rate is based on an average net asset value of
$9.56 over the past one month, $9.54 over the past six months, and
$9.53 over the past one year. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. If Fidelity had not reimbursed certain expenses, the yield
would have been 4.59%.
FIDELITY TARGET TIMELINE 2001
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 $10,000
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). You can also look at a fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain expenses, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY TARGET TIMELINE 2001 4.35% 9.62% 11.74%
LB AGGREGATE BOND 4.90% 10.72% 14.49%
U.S. TREASURY STRIPS (8/15/01 AND 11/15/01) 4.64% 9.44% 10.90%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on February 8, 1996. 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 return to
the Lehman Brothers Aggregate Bond Index - a market value weighted
performance benchmark for investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed
securities, with maturities of at least one year. You can also compare
the fund to the average of the total returns of U.S. Treasury STRIPS
maturing on 8/15/01 and 11/15/01, which reflects the performance of
zero-coupon bonds with maturities similar to the fund's. These
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY TARGET TIMELINE 2001 9.62% 5.77%
LB AGGREGATE BOND 10.72% 7.07%
U.S. TREASURY STRIPS (8/15/01 AND 11/15/01) 9.44% 5.36%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show what would have happened if the fund performed at a constant rate
each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980224 080559 S00000000000001
Target Timeline 2001 Avg US TreasStrip 2001
LB Aggregate Bond
00381 F0093
LB001
1996/02/08 10000.00 10000.00
10000.00
1996/02/29 9763.03 9793.77
9839.53
1996/03/31 9659.03 9644.16
9771.14
1996/04/30 9582.85 9541.04
9716.19
1996/05/31 9558.77 9502.61
9696.46
1996/06/30 9695.97 9643.50
9826.67
1996/07/31 9711.59 9646.86
9853.56
1996/08/31 9687.10 9625.31
9837.05
1996/09/30 9868.61 9810.59
10008.48
1996/10/31 10105.68 10048.52
10230.18
1996/11/30 10290.56 10225.78
10405.41
1996/12/31 10162.27 10090.29
10308.66
1997/01/31 10193.78 10132.73
10340.23
1997/02/28 10199.18 10123.94
10365.95
1997/03/31 10092.01 10008.01
10251.08
1997/04/30 10241.62 10144.85
10404.53
1997/05/31 10328.56 10236.50
10502.89
1997/06/30 10435.11 10332.84
10627.55
1997/07/31 10708.33 10598.38
10914.14
1997/08/31 10615.90 10508.74
10821.04
1997/09/30 10755.43 10650.93
10980.64
1997/10/31 10886.16 10800.54
11139.93
1997/11/30 10890.55 10803.23
11191.23
1997/12/31 10998.62 10907.70
11303.91
1998/01/30 11174.41 11089.66
11449.03
IMATRL PRASUN SHR__CHT 19980131 19980224 080601 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Target Timeline 2001 on February 8, 1996, when
the fund started. As the chart shows, by January 31, 1998, the value
of the investment would be $11,174 - a 11.74% increase on the initial
investment. For comparison, look at how the Lehman Brothers Aggregate
Bond Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would be $11,449 - a
14.49% increase. If $10,000 was put in U.S. Treasury STRIPS (8/15/01
and 11/15/01), it would be valued at $11,090 - a 10.90% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN
RIDE OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, JULY 31, (COMMENCEMENT
1998 1997 OF OPERATIONS) TO
JULY 31,
1996
DIVIDEND RETURN 3.52% 7.71% 3.12%
CAPITAL APPRECIATION RETURN 0.83% 2.55% -6.00%
TOTAL RETURN 4.35% 10.26% -2.88%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the fund. A capital appreciation return reflects both the
amount paid by the fund to shareholders as capital gain distributions
and changes in the fund's share price. Both returns assume the
dividends or capital gains paid by the fund are reinvested, if any.
DIVIDENDS AND YIELD
PERIODS ENDED JANUARY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 5.38(CENTS) 33.07(CENTS) 67.84(CENTS)
ANNUALIZED DIVIDEND RATE 6.52% 6.84% 7.13%
30-DAY ANNUALIZED YIELD 5.61% - -
DIVIDENDS per share show the income paid by the fund for a set period.
The annualized dividend rate is based on an average net asset value of
$9.72 over the past one month, $9.59 over the past six months, and
$9.52 over the past one year. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. If Fidelity had not reimbursed certain expenses, the yield
would have been 4.63%.
FIDELITY TARGET TIMELINE 2003
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 $10,000
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). You can also look at a fund's income, as
reflected in its yield, to measure performance. If Fidelity had not
reimbursed certain expenses, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY TARGET TIMELINE 2003 5.29% 11.76% 12.51%
LB AGGREGATE BOND 4.90% 10.72% 14.49%
U.S. TREASURY STRIPS (8/15/03 AND 11/15/03) 5.77% 12.01% 12.56%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on February 8, 1996. 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 return to
the Lehman Brothers Aggregate Bond Index - a market value weighted
performance benchmark for investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed
securities, with maturities of at least one year. You can also compare
the fund to the average of the total returns of U.S. Treasury STRIPS
maturing on 8/15/03 and 11/15/03, which reflects the performance of
zero-coupon bonds with maturities similar to the fund's. These
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JANUARY 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY TARGET TIMELINE 2003 11.76% 6.13%
LB AGGREGATE BOND 10.72% 7.07%
U.S. TREASURY STRIPS (8/15/03 AND 11/15/03) 12.01% 6.16%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show what would have happened if the fund performed at a constant rate
each year.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19980131 19980224 151140 S00000000000001
Target Timeline 2003 Avg US TreasStrip 2003
LB Aggregate Bond
00383 F0094
LB001
1996/02/08 10000.00 10000.00
10000.00
1996/02/29 9693.93 9708.73
9839.53
1996/03/31 9591.28 9547.53
9771.14
1996/04/30 9453.76 9389.28
9716.19
1996/05/31 9397.89 9332.02
9696.46
1996/06/30 9543.44 9500.15
9826.67
1996/07/31 9546.95 9506.25
9853.56
1996/08/31 9499.53 9458.85
9837.05
1996/09/30 9710.09 9672.82
10008.48
1996/10/31 9996.20 9990.76
10230.18
1996/11/30 10250.02 10224.62
10405.41
1996/12/31 10063.50 10045.81
10308.66
1997/01/31 10067.43 10049.62
10340.23
1997/02/28 10076.73 10059.55
10365.95
1997/03/31 9908.59 9860.12
10251.08
1997/04/30 10083.36 10032.03
10404.53
1997/05/31 10173.92 10155.86
10502.89
1997/06/30 10318.60 10276.60
10627.55
1997/07/31 10686.53 10641.95
10914.14
1997/08/31 10537.32 10487.54
10821.04
1997/09/30 10729.76 10674.78
10980.64
1997/10/31 10925.09 10878.10
11139.93
1997/11/30 10951.69 10894.91
11191.23
1997/12/31 11083.92 11030.18
11303.91
1998/01/30 11251.45 11256.41
11449.03
IMATRL PRASUN SHR__CHT 19980131 19980224 151141 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Target Timeline 2003 on February 8, 1996, when
the fund started. As the chart shows, by January 31, 1998, the value
of the investment would be $11,251 - a 12.51% increase on the initial
investment. For comparison, look at how the Lehman Brothers Aggregate
Bond Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would be $11,449 - a
14.49% increase. If $10,000 was put in U.S. Treasury STRIPS (8/15/03
and 11/15/03), it would be valued at $11,256 - a 12.56% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN
RIDE OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, JULY 31, (COMMENCEMENT
1998 1997 OF OPERATIONS) TO
JULY 31,
1996
DIVIDEND RETURN 3.53% 7.29% 3.07%
CAPITAL APPRECIATION RETURN 1.76% 4.65% -7.60%
TOTAL RETURN 5.29% 11.94% -4.53%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the fund. A capital appreciation return reflects both the
amount paid by the fund to shareholders as capital gain distributions
and changes in the fund's share price. Both returns assume the
dividends or capital gains paid by the fund are reinvested, if any.
DIVIDENDS AND YIELD
PERIODS ENDED JANUARY 31, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 5.74(CENTS) 33.09(CENTS) 64.54(CENTS)
ANNUALIZED DIVIDEND RATE 6.86% 6.80% 6.79%
30-DAY ANNUALIZED YIELD 5.71% - -
DIVIDENDS per share show the income paid by the fund for a set period.
The annualized dividend rate is based on an average net asset value of
$9.85 over the past one month, $9.66 over the past six months, and
$9.51 over the past one year. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. If Fidelity had not reimbursed certain expenses, the yield
would have been 4.94%.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
A lack of inflationary pressure
resulted in a favorable investing
climate for bonds during the six
months that ended January 31,
1998. The Lehman Brothers
Aggregate Bond Index - a broad
gauge of the U.S. taxable
investment-grade bond market -
returned 4.90% during this period.
The bond market fared well in the
months of August and September,
spurred on by the continued
strength of the U.S. economy
and a reluctance on the part of the
Federal Reserve Board to raise
interest rates. Global volatility and
historically low interest rates were
the main stories in the last quarter
of 1997. Financial problems in
Asia came to a head in October,
resulting in a "flight to quality."
Wary stock investors sought
investments offering lower
volatility, helping the U.S. bond
market - especially U.S.
Treasuries - surge. The Lehman
Brothers Corporate Bond Index
returned 4.40% for the six months.
Corporate bonds benefited from
continued economic growth and
demand for yield, although they
faltered somewhat in January
1998 as investors feared a
slowdown in demand in Asia
would eat into corporate earnings.
Despite increased prepayment
activity due to lower rates,
mortgage-backed bonds also
fared relatively well, with the
Lehman Brothers
Mortgage-Backed Securities
Index returning 4.45%.
An interview with Christine Thompson, Portfolio Manager of Fidelity
Target Timeline Funds 1999, 2001, 2003
Q. HOW DID THE FUNDS PERFORM, CHRISTINE?
A. The funds performed in line with their investment objectives. For
the six months that ended January 31, 1998, Target Timeline 1999, 2001
and 2003 returned 3.50%, 4.35% and 5.29%, respectively. For the same
period, U.S. Treasury STRIPS maturing at approximately the same time
as the funds (August and November 1999, 2001 and 2003) averaged 3.53%,
4.64% and 5.77%, respectively. The Lehman Brothers Aggregate Bond
Index had a six-month return of 4.90%. For the 12 months that ended
January 31, 1998, Target Timeline 1999, 2001 and 2003 returned 7.37%,
9.62% and 11.76%, respectively. The U.S. Treasury STRIPS had
respective returns of 7.27%, 9.44% and 12.01% during the 12-month
period, while the Lehman Brothers index returned 10.72%.
Q. YOU SAID THE FUNDS PERFORMED IN LINE WITH THEIR GOALS. HOW DO YOU
GAUGE THEIR PERFORMANCE?
A. The funds are structured so that their interest-rate sensitivity,
and therefore return patterns, will closely resemble that of a
zero-coupon bond - a security that doesn't make periodic interest
payments, but rather is sold at a discount to what its value will be
at maturity. The average annual return earned by such an investment
when it is held to maturity is equal to its yield at the time of
purchase. Similarly, Target Timeline funds are set up so that
investors' average annual rate of return is also approximated by the
yield on the portfolio at the time of purchase.
Q. HOW DO YOU VIEW THE FUNDS' PERFORMANCE RELATIVE TO THE LEHMAN
AGGREGATE BOND INDEX?
A. The funds' investment objective is to control interest-rate
sensitivity over a specified time horizon, namely until each fund's
maturity date. Each fund's duration, a measure of interest-rate
sensitivity, is managed to decline over time as the funds approach
their maturity dates. The Lehman Brothers Aggregate Bond Index, on the
other hand, is an indication of the performance of the overall
investment-grade bond market, which by design is rebalanced monthly to
include securities in the marketplace with more than one year to
maturity. Consequently, over time, the funds' duration characteristics
and return patterns may not resemble the Lehman Brothers Aggregate
Bond Index.
Q. HOW DID CORPORATE BONDS PERFORM?
A. Over the past several years, valuation levels across different
sectors of the corporate bond market became very compressed - meaning
bonds of varying credit qualities and cash-flow structures traded at
increasingly tight valuation levels. In October, however, corporate
bonds broke that trend and we saw increased differentiation and
cheapening valuations in the sector. Overall, corporate bonds - as a
group - performed poorly versus Treasuries throughout the fourth
quarter of 1997 and into the first quarter of 1998. In addition to
credit concerns tied to the deteriorating situation in Asia, corporate
bond prices were hurt by an increased supply of new issues. As
interest rates declined, corporations increasingly began to view the
environment as attractive for locking in longer-term funding.
Q. WHAT'S YOUR OUTLOOK FOR THE MARKET?
A. I think the market will continue to reward cleanly structured
corporate bonds - such as non-callable securities or those that can't
be redeemed by the issuer before maturity - and U.S. government
securities. I believe Fidelity's research team can benefit the funds'
returns even more in this environment of increased differentiation in
valuation levels by identifying issuers with improving credit
qualities. I believe this research will continue to allow the Target
Timeline funds to meet their objectives in a variety of market
environments.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
CHRISTINE THOMPSON ON
QUANTITATIVE RESEARCH:
"Quantitative research allows us to
understand how our funds are likely
to perform relative to the market
in a variety of interest-rate
environments and market
scenarios. Our research draws on
historical performance to model
how individual securities react
and allows us to combine certain
groupings of securities to examine
their performance together under
various circumstances.
"Quantitative research allows us to
analyze issues such as: How do the
payment patterns of the bonds in
a portfolio come together? How
would you expect these valuation
measures to adjust and to offset
one another in different market
environments? If we re-lived in the
future some of the extreme
environments that we've seen in
the past, what kind of returns
would you expect this portfolio to
have relative to the overall
market?
"Being able to model a portfolio
that contains securities with many
different characteristics to find
out how the portfolio is likely to
perform in an extreme
interest-rate environment, for
example, is very useful in
controlling risks and positioning
the fund."
FUND FACTS
GOAL: definable return over the
life of the funds by investing
mainly in investment-grade
quality debt securities whose
average duration is
approximately equal to each
fund's maturity
FUND NUMBERS: 379 (1999),
381 (2001), 383 (2003)
TRADING SYMBOLS: FTTAF (1999),
FTTBF (2001), FTTCF (2003)
START DATE: February 8, 1996
SIZE: as of January 31, 1998,
more than $13 million, 1999
fund; more than $12 million,
2001 fund; more than
$17 million, 2003 fund
MANAGER: Christine Thompson,
since inception; manager,
Fidelity Intermediate Bond
Fund, since 1995; manager,
Fidelity U.S. Bond Index, since
1990; joined Fidelity in 1985
(checkmark)
FIDELITY TARGET TIMELINE 1999
INVESTMENT CHANGES
QUALITY DIVERSIFICATION AS OF JANUARY 31, 1998
(MOODY'S RATINGS) % % OF FUND'S INVESTMENTS
O 6 MONTHS AGO
F
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S
AAA 2 11.9
1
.
2
AA 3 3.9
.
6
A 4 47.1
7
.
1
BAA 2 33.9
2
.
8
BA 2 2.5
.
3
TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING
AGENCIES OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF
ACQUISITION BY FIDELITY.
AVERAGE YEARS TO MATURITY AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 1.8 2.3
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 1.6 2.1
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JANUARY 31, 1998 * AS OF JULY 31, 1997 **
CORPORATE BONDS 71.1%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 18.6%
FOREIGN GOVERNMENT
OBLIGATIONS 2.3%
OTHER 5.0%
SHORT-TERM
INVESTMENTS 3.0%
CORPORATE BONDS 82.2%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 9.1%
FOREIGN GOVERNMENT
OBLIGATIONS 2.5%
OTHER 5.5%
SHORT-TERM
INVESTMENTS 0.7%
ROW: 1, COL: 1, VALUE: 3.0
ROW: 1, COL: 2, VALUE: 5.0
ROW: 1, COL: 3, VALUE: 2.3
ROW: 1, COL: 4, VALUE: 18.6
ROW: 1, COL: 5, VALUE: 71.09999999999999
ROW: 1, COL: 1, VALUE: 2.0
ROW: 1, COL: 2, VALUE: 5.5
ROW: 1, COL: 3, VALUE: 3.0
ROW: 1, COL: 4, VALUE: 9.1
ROW: 1, COL: 5, VALUE: 41.0
ROW: 1, COL: 6, VALUE: 40.0
* FOREIGN
INVESTMENTS 11.5%
** FOREIGN
INVESTMENTS 15.0%
FIDELITY TARGET TIMELINE 1999
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
NONCONVERTIBLE BONDS - 71.1%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
BASIC INDUSTRIES - 2.8%
CHEMICALS & PLASTICS - 2.8%
CBI Industries, Inc. 6 1/4%, 6/30/00 A3 $ 365,000 $ 368,690
DURABLES - 2.1%
AUTOS, TIRES, & ACCESSORIES - 1.3%
General Motors Corp. 9 5/8%, 12/1/00 A3 150,000 164,327
CONSUMER ELECTRONICS - 0.8%
Black & Decker Corp. 6 5/8%, 11/15/00 Baa 100,000 101,300
TOTAL DURABLES 265,627
ENERGY - 6.1%
OIL & GAS - 6.1%
Burlington Resources, Inc. 7.15%, 5/1/99 A3 246,000 249,747
Occidental Petroleum Corp. 6 1/4%, 11/8/00 Baa 101,000 101,956
Pennzoil Co. 9 5/8%, 11/15/99 Baa 195,000 206,587
Texas Eastern Transmission Corp.
10 3/8%, 11/15/00 A2 220,000 244,578
802,868
FINANCE - 42.8%
BANKS - 26.8%
Banco Latin Americano 7%, 9/24/99 (a) Baa 350,000 355,502
Bank South Corp. 10.20%, 6/1/99 A1 200,000 211,250
BanPonce Corp. 6.378%, 4/8/99 A3 150,000 150,603
Chase Manhattan Corp. 10%, 6/15/99 A1 253,000 266,543
First Hawaiian, Inc. 6 1/4%, 8/15/00 Baa 165,000 165,776
First Interstate Bancorp 8 5/8%, 4/1/99 A2 362,000 373,030
First Security Corp. 7 7/8%, 10/15/99 A3 450,000 464,625
Florida National Banks, Inc. 9 7/8%, 5/15/99 A2 376,000 394,413
Kansallis-Osake-Pankki 6 3/8%, 8/15/00 A2 250,000 253,165
Midlantic Corp. 9 1/4%, 9/1/99 A2 318,000 333,766
Republic of NY Corp. 9 3/4%, 12/1/00 A1 125,000 137,490
St. George Bank Ltd. yankee 6 7/8%,
4/1/99 (a) A3 200,000 202,078
Shawmut National Corp. 8 5/8%, 12/15/99 A3 200,000 209,450
3,517,691
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 11.3%
Aristar, Inc. 7 1/2%, 7/1/99 Baa $ 299,000 $ 305,500
Beneficial Corp. 10.10%, 11/27/00 A2 75,000 83,021
Chrysler Financial Corp. 9 1/2%, 12/15/99 A3 383,000 407,317
Fleet Financial Group, Inc. 7 5/8%, 12/1/99 A3 100,000 102,925
Greyhound Financial Corp. 6.65%, 1/19/00 Baa 165,000 167,668
Heller Financial, Inc. 7 7/8%, 11/1/99 A3 105,000 108,105
Southwestern Bell Capital Corp.
6 3/4%, 2/1/00 A2 100,000 102,016
US West Financial Services, Inc.
8.40%, 9/15/99 A2 200,000 208,082
1,484,634
INSURANCE - 4.7%
SunAmerica, Inc. 6.20%, 10/31/99 Baa 400,000 402,132
Travelers Property Casualty Corp.
6 3/4%, 9/1/99 A2 205,000 207,741
609,873
TOTAL FINANCE 5,612,198
MEDIA & LEISURE - 3.5%
BROADCASTING - 2.3%
TCI Communication, Inc. 7 1/4%, 6/15/99 Ba1 300,000 304,446
PUBLISHING - 1.2%
News America Holdings, Inc. 7 1/2%, 3/1/00 Baa 150,000 154,325
TOTAL MEDIA & LEISURE 458,771
NONDURABLES - 1.2%
TOBACCO - 1.2%
Philip Morris Companies, Inc. 9 1/4%, 2/15/00 A2 150,000 158,582
RETAIL & WHOLESALE - 5.2%
GENERAL MERCHANDISE STORES - 5.2%
Dayton Hudson Corp. 10%, 12/1/00 Baa 340,000 375,224
Dillard Department Stores, Inc.
7 3/8%, 6/15/99 A2 300,000 306,423
681,647
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
TECHNOLOGY - 2.3%
COMPUTERS & OFFICE EQUIPMENT - 2.3%
Comdisco, Inc. 7 3/4%, 9/1/99 Baa $ 294,000 $ 301,926
TRANSPORTATION - 1.0%
RAILROADS - 1.0%
Burlington Northern, Inc. 7.40%, 5/15/99 Baa 125,000 127,234
UTILITIES - 4.1%
GAS - 4.1%
Arkla, Inc. 8 7/8%, 7/15/99 Baa 210,000 219,028
Sonat, Inc. 9 1/2%, 8/15/99 A3 300,000 316,156
535,184
TOTAL NONCONVERTIBLE BONDS
(Cost $9,387,297) 9,312,727
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 18.6%
U.S. TREASURY OBLIGATIONS - 15.1%
6%, 8/15/99 Aaa 960,000 968,851
7 3/4%, 12/31/99 Aaa 200,000 208,594
8 1/2%, 2/15/00 Aaa 755,000 800,300
1,977,745
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.5%
Financing Corp. stripped principal
0%, 8/8/99 Aaa 311,000 286,241
State of Israel (guaranteed by U.S. government
through Agency for International Development)
7 3/4%, 11/15/99 Aaa 175,000 181,577
467,818
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS
(Cost $2,427,350) 2,445,563
FOREIGN GOVERNMENT OBLIGATIONS - 2.3%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
Export Development Corp. yankee
8 1/8%, 8/10/99 Aa2 $ 140,000 $ 144,808
Manitoba Province yankee 7.93%, 2/15/00 A1 150,000 156,165
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $307,285) 300,973
SUPRANATIONAL OBLIGATIONS - 5.0%
African Development Bank 9.30%, 7/1/00 Aa1 300,000 322,938
European Investment Bank 10 1/8%, 10/1/00 Aaa 300,000 331,848
TOTAL SUPRANATIONAL OBLIGATIONS
(Cost $659,154) 654,786
CERTIFICATES OF DEPOSIT - 1.9%
First National Bank of Maryland, Baltimore
6.05%, 10/28/99 (Cost $249,613) A1 250,000 250,120
CASH EQUIVALENTS - 1.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.59%, dated
1/30/98 due 2/2/98 $ 141,066 141,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $13,171,699) $ 13,105,169
LEGEND
1. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $557,580 or 4.2%
of net assets.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 71.9% AAA, AA, A 60.3%
Baa 22.8% BBB 36.7%
Ba 2.3% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 88.5%
Supranational 5.0
Panama 2.7
Canada 2.3
Australia 1.5
TOTAL 100.0%
Purchases and sales of securities, other than short-term securities,
aggregated $3,655,614 and $2,792,001, respectively, of which U.S.
government and government agency obligations aggregated $2,201,494 and
$856,149, respectively.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $13,173,867. Net unrealized depreciation
aggregated $68,698, of which $44,942 related to appreciated investment
securities and $113,640 related to depreciated investment securities.
The fund intends to elect to defer to its fiscal year ending July 31,
1998 approximately $39,000 of losses recognized during the period
November 1, 1996 to July 31, 1997.
At July 31, 1997, the fund had a capital loss carryforward of
approximately $44,000 all of which will expire on July 31, 2005.
FIDELITY TARGET TIMELINE 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 13,105,169
AGREEMENTS OF $141,000) (COST $13,171,699) -
SEE ACCOMPANYING SCHEDULE
CASH 4,009
INTEREST RECEIVABLE 271,322
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 3,460
TOTAL ASSETS 13,383,960
LIABILITIES
DISTRIBUTIONS PAYABLE $ 610
OTHER PAYABLES AND ACCRUED EXPENSES 17,305
TOTAL LIABILITIES 17,915
NET ASSETS $ 13,366,045
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 13,515,410
UNDISTRIBUTED NET INVESTMENT INCOME 8,758
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) (91,593)
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS (66,530)
NET ASSETS, FOR 1,397,921 SHARES OUTSTANDING $ 13,366,045
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $9.56
SHARE ($13,366,045 (DIVIDED BY) 1,397,921 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 483,667
INTEREST
EXPENSES
MANAGEMENT FEE $ 27,607
TRANSFER AGENT FEES 12,898
ACCOUNTING FEES AND EXPENSES 30,008
NON-INTERESTED TRUSTEES' COMPENSATION 24
CUSTODIAN FEES AND EXPENSES 385
REGISTRATION FEES 13,930
AUDIT 17,405
LEGAL 1,584
REPORTS TO SHAREHOLDERS 1,847
MISCELLANEOUS 48
TOTAL EXPENSES BEFORE REDUCTIONS 105,736
EXPENSE REDUCTIONS (83,605) 22,131
NET INVESTMENT INCOME 461,536
REALIZED AND UNREALIZED GAIN (LOSS) (4,297)
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON (23,815)
INVESTMENT SECURITIES
NET GAIN (LOSS) (28,112)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 433,424
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTION $ 97
CUSTODIAN CREDITS
FMR REIMBURSEMENT 83,508
$ 83,605
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 461,536 $ 716,343
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) (4,297) (52,439)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (23,815) 104,719
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 433,424 768,623
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (460,278) (709,625)
SHARE TRANSACTIONS 2,178,186 6,043,900
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 452,864 701,715
COST OF SHARES REDEEMED (1,435,326) (1,930,601)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,195,724 4,815,014
FROM SHARE TRANSACTIONS
REDEMPTION FEES 336 1,019
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,169,206 4,875,031
NET ASSETS
BEGINNING OF PERIOD 12,196,839 7,321,808
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 13,366,045 $ 12,196,839
INCOME OF $8,758 AND $7,500, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 228,250 632,922
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 47,485 73,491
REDEEMED (150,398) (202,177)
NET INCREASE (DECREASE) 125,337 504,236
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, 1998 JULY 31, (COMMENCEMENT
OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1997 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.580 $ 9.530 $ 10.000
INCOME FROM INVESTMENT OPERATIONS .349 D .724 D .310
NET INVESTMENT INCOME
NET REALIZED AND UNREALIZED GAIN (LOSS) (.020) .027 (.470)
TOTAL FROM INVESTMENT OPERATIONS .329 .751 (.160)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.349) (.702) (.310)
REDEMPTION FEES ADDED TO PAID IN CAPITAL - .001 -
NET ASSET VALUE, END OF PERIOD $ 9.560 $ 9.580 $ 9.530
TOTAL RETURN B, C 3.50% 8.16% (1.58)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,366 $ 12,197 $ 7,322
RATIO OF EXPENSES TO AVERAGE NET ASSETS .35% A, E .35% E .35% A, E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .35% A .34% F .34% A, F
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE 7.27% A 7.38% 6.88% A
NET ASSETS
PORTFOLIO TURNOVER RATE 45% A 80% 118% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
FIDELITY TARGET TIMELINE 2001
INVESTMENT CHANGES
QUALITY DIVERSIFICATION AS OF JANUARY 31, 1998
(MOODY'S RATINGS) % % OF FUND'S INVESTMENTS
O 6 MONTHS AGO
F
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S
AAA 2 28.9
6
.
9
AA 1 7.5
1
.
3
A 3 32.2
1
.
1
BAA 2 29.4
9
.
3
TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING
AGENCIES OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF
ACQUISITION BY FIDELITY.
AVERAGE YEARS TO MATURITY AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 4.4 5.0
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 3.6 4.1
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JANUARY 31, 1998 * AS OF JULY 31, 1997 **
CORPORATE BONDS 56.8%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 26.9%
FOREIGN GOVERNMENT
OBLIGATIONS 11.5%
OTHER 3.4%
SHORT-TERM
INVESTMENTS 1.4%
CORPORATE BONDS 57.5%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 28.9%
FOREIGN GOVERNMENT
OBLIGATIONS 7.8%
OTHER 3.8%
SHORT-TERM
INVESTMENTS 2.0%
ROW: 1, COL: 1, VALUE: 2.0
ROW: 1, COL: 2, VALUE: 3.6
ROW: 1, COL: 3, VALUE: 11.5
ROW: 1, COL: 4, VALUE: 26.9
ROW: 1, COL: 5, VALUE: 56.0
ROW: 1, COL: 1, VALUE: 2.6
ROW: 1, COL: 2, VALUE: 4.0
ROW: 1, COL: 3, VALUE: 7.8
ROW: 1, COL: 4, VALUE: 28.0
ROW: 1, COL: 5, VALUE: 57.6
* FOREIGN
INVESTMENTS 19.2%
** FOREIGN
INVESTMENTS 18.2%
FIDELITY TARGET TIMELINE 2001
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
NONCONVERTIBLE BONDS - 56.8%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
BASIC INDUSTRIES - 2.6%
CHEMICALS & PLASTICS - 2.6%
Praxair, Inc. 6 3/4%, 3/1/03 A3 $ 300,000 $ 307,665
ENERGY - 1.8%
OIL & GAS - 1.8%
Petro-Canada 8.60%, 10/15/01 A3 190,000 205,825
FINANCE - 31.9%
BANKS - 21.5%
Bank of New York Co., Inc.
7 7/8%, 11/15/02 A2 136,000 147,004
BankAmerica Corp. 7 1/2%, 10/15/02 A1 25,000 26,617
BanPonce Financial Corp. 7.30%, 6/5/02 A3 400,000 416,412
Barnett Banks, Inc. 9.83%, 5/30/03 A2 160,000 187,770
Central Fidelity Banks, Inc. 8.15%, 11/15/02 A1 200,000 217,938
Huntington Bancshares, Inc. 7 7/8%, 11/15/02 Baa 100,000 107,368
Integra Financial Corp. 8 1/2%, 5/15/02 A2 350,000 381,651
Kansallis-Osake-Pankki 10%, 5/1/02 A3 255,000 291,473
Skandinaviska Enskilda Banken yankee
8.45%, 5/15/02 A3 300,000 325,983
Summit Bancorp. 8 5/8%, 12/10/02 BBB 250,000 275,983
Wells Fargo & Co. 6 7/8%, 4/15/03 A2 160,000 165,541
2,543,740
CREDIT & OTHER FINANCE - 5.6%
Countrywide Funding Corp. 8 1/4%, 7/15/02 Baa 250,000 269,918
Finova Capital Corp. 7 1/8%, 5/1/02 Baa 174,000 181,082
Greyhound Financial Corp. 7.82%, 1/27/03 Baa 100,000 107,799
Southwestern Bell Capital Corp.
7.36%, 5/1/02 A2 100,000 105,917
664,716
INSURANCE - 1.7%
SunAmerica, Inc. 6.58%, 1/15/02 Baa 200,000 204,674
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - 3.1%
Great Western Financial Corp. 8.60%, 2/1/02 A3 $ 100,000 $ 109,235
Long Island Savings Bank FSB
7%, 6/13/02 Baa 250,000 258,625
367,860
TOTAL FINANCE 3,780,990
RETAIL & WHOLESALE - 9.5%
GENERAL MERCHANDISE STORES - 9.5%
Dayton Hudson Corp.:
9 3/4%, 7/1/02 Baa 75,000 85,520
6.40%, 2/15/03 Baa 245,000 247,771
Federated Department Stores, Inc.
8 1/8%, 10/15/02 Baa 400,000 430,528
Penney (J.C.) Co., Inc. 7 1/4%, 4/1/02 A2 350,000 364,938
1,128,757
TRANSPORTATION - 2.8%
AIR TRANSPORTATION - 2.8%
Delta Air Lines, Inc. 8 1/2%, 3/15/02 Baa 311,000 332,926
UTILITIES - 8.2%
ELECTRIC UTILITY - 1.8%
Philadelphia Electric Co. 7 1/8%, 9/1/02 Baa 205,000 213,491
GAS - 5.5%
Columbia Gas System, Inc. 6.61%, 11/28/02 Baa 150,000 153,240
Enron Corp. 9 7/8%, 6/15/03 Baa 210,000 244,264
Southwest Gas Corp. 9 3/4%, 6/15/02 Baa 225,000 255,418
652,922
TELEPHONE SERVICES - 0.9%
GTE Corp. 9.10%, 6/1/03 Baa 95,000 107,385
TOTAL UTILITIES 973,798
TOTAL NONCONVERTIBLE BONDS
(Cost $6,681,257) 6,729,961
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 26.9%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 23.2%
6 1/4%, 1/31/02 Aaa $ 2,240,000 $ 2,305,789
10 3/4%, 2/15/03 Aaa 365,000 448,778
2,754,567
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.7%
Federal Home Loan Bank 6.37%, 6/30/03 Aaa 180,000 186,131
Financing Corp. stripped principal 0%, 5/2/01 Aaa 300,000 250,626
436,757
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,119,921) 3,191,324
FOREIGN GOVERNMENT OBLIGATIONS - 11.5%
Canadian Government 6 1/8%, 7/15/02 Aa2 400,000 408,160
Ireland Republic 7.64%, 1/2/02 Aa1 210,000 222,928
Manitoba Province yankee 8%, 4/15/02 A1 110,000 118,187
Nova Scotia Province yankee
9 3/8%, 7/15/02 A3 275,000 310,486
Ontario Province yankee 7 3/8%, 1/27/03 Aa3 150,000 159,909
Swedish Kingdom yankee 0%, 4/1/01 Aa3 174,000 145,699
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $1,346,696) 1,365,369
SUPRANATIONAL OBLIGATIONS - 3.4%
African Development Bank yankee
7.70%, 7/15/02 (Cost $390,137) Aa1 375,000 401,464
CASH EQUIVALENTS - 1.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.59%, dated
1/30/98 due 2/2/98 $ 162,075 162,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $11,700,011) $ 11,850,118
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 69.3% AAA, AA, A 67.0%
Baa 27.0% BBB 31.6%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 80.8%
Canada 10.0
Sweden 3.9
Supranational 3.4
Ireland 1.9
TOTAL 100.0%
Purchases and sales of securities, other than short-term securities,
aggregated $3,225,069 and $1,803,256, respectively, of which U.S.
government and government agency obligations aggregated $2,021,282 and
$1,327,969, respectively.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $11,706,401. Net unrealized appreciation
aggregated $143,717, of which $190,436 related to appreciated
investment securities and $46,719 related to depreciated investment
securities.
The fund intends to elect to defer to its fiscal year ending July 31,
1998 approximately $15,000 of losses recognized during the period
November 1, 1996 to July 31, 1997.
At July 31, 1997, the fund had a capital loss carryforward of
approximately $32,000 all of which will expire on July 31, 2005.
FIDELITY TARGET TIMELINE 2001
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 11,850,118
AGREEMENTS OF $162,000) (COST $11,700,011) -
SEE ACCOMPANYING SCHEDULE
CASH 422
INTEREST RECEIVABLE 230,840
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 4,998
TOTAL ASSETS 12,086,378
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED $ 561
DISTRIBUTIONS PAYABLE 407
OTHER PAYABLES AND ACCRUED EXPENSES 21,490
TOTAL LIABILITIES 22,458
NET ASSETS $ 12,063,920
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 11,961,004
UNDISTRIBUTED NET INVESTMENT INCOME 3,328
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) (50,519)
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 150,107
NET ASSETS, FOR 1,241,679 SHARES OUTSTANDING $ 12,063,920
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $9.72
SHARE ($12,063,920 (DIVIDED BY) 1,241,679 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 400,208
INTEREST
EXPENSES
MANAGEMENT FEE $ 24,198
TRANSFER AGENT FEES 10,965
ACCOUNTING FEES AND EXPENSES 30,007
NON-INTERESTED TRUSTEES' COMPENSATION 13
CUSTODIAN FEES AND EXPENSES 526
REGISTRATION FEES 14,017
AUDIT 14,620
LEGAL 1,347
REPORTS TO SHAREHOLDERS 1,583
MISCELLANEOUS 41
TOTAL EXPENSES BEFORE REDUCTIONS 97,317
EXPENSE REDUCTIONS (77,845) 19,472
NET INVESTMENT INCOME 380,736
REALIZED AND UNREALIZED GAIN (LOSS) 9,275
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 92,075
INVESTMENT SECURITIES
NET GAIN (LOSS) 101,350
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 482,086
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTION $ 12
CUSTODIAN CREDITS
FMR REIMBURSEMENT 77,833
$ 77,845
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 380,736 $ 602,268
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 9,275 (11,778)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 92,075 237,390
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 482,086 827,880
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (380,712) (601,248)
SHARE TRANSACTIONS 2,037,831 4,550,600
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 376,283 593,980
COST OF SHARES REDEEMED (829,323) (1,174,224)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,584,791 3,970,356
FROM SHARE TRANSACTIONS
REDEMPTION FEES 51 341
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,686,216 4,197,329
NET ASSETS
BEGINNING OF PERIOD 10,377,704 6,180,375
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 12,063,920 $ 10,377,704
INCOME OF $3,328 AND $3,304, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 212,010 480,141
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 39,178 62,632
REDEEMED (86,435) (123,511)
NET INCREASE (DECREASE) 164,753 419,262
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, 1998 JULY 31, (COMMENCEMENT
OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1997 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.640 $ 9.400 $ 10.000
INCOME FROM INVESTMENT OPERATIONS .330 D .690 D .310
NET INVESTMENT INCOME
NET REALIZED AND UNREALIZED GAIN (LOSS) .081 .240 (.600)
TOTAL FROM INVESTMENT OPERATIONS .411 .930 (.290)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.331) (.690) (.310)
NET ASSET VALUE, END OF PERIOD $ 9.720 $ 9.640 $ 9.400
TOTAL RETURN B, C 4.35% 10.26% (2.88)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 12,064 $ 10,378 $ 6,180
RATIO OF EXPENSES TO AVERAGE NET ASSETS .35% A, E .35% E .35% A, E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .35% A .34% F .34% A, F
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE 6.84% A 7.31% 6.93% A
NET ASSETS
PORTFOLIO TURNOVER RATE 33% A 97% 93% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
FIDELITY TARGET TIMELINE 2003
INVESTMENT CHANGES
QUALITY DIVERSIFICATION AS OF JANUARY 31, 1998
(MOODY'S RATINGS) % % OF FUND'S INVESTMENTS
O 6 MONTHS AGO
F
F
U
N
D
'
S
I
N
V
E
S
T
M
E
N
T
S
AAA 4 49.3
8
.
8
AA 6 5.3
.
3
A 1 19.3
5
.
5
BAA 2 25.1
5
.
0
BA 0 0.0
.
7
TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. SECURITIES RATED AS "BA" OR BELOW
WERE RATED INVESTMENT GRADE BY OTHER NATIONALLY RECOGNIZED RATING
AGENCIES OR ASSIGNED AN INVESTMENT GRADE RATING AT THE TIME OF
ACQUISITION BY FIDELITY.
AVERAGE YEARS TO MATURITY AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 7.2 8.2
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF JANUARY 31, 1998
6 MONTHS AGO
YEARS 5.5 6.0
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JANUARY 31, 1998 * AS OF JULY 31, 1997**
CORPORATE BONDS 43.9%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 47.7%
FOREIGN GOVERNMENT
OBLIGATIONS 4.7%
SHORT-TERM
INVESTMENTS 3.7%
CORPORATE BONDS 53.8%
U.S. GOVERNMENT
AND AGENCY
OBLIGATIONS 43.8%
FOREIGN GOVERNMENT
OBLIGATIONS 1.4%
SHORT-TERM
INVESTMENTS 1.0%
ROW: 1, COL: 1, VALUE: 3.7
ROW: 1, COL: 2, VALUE: 4.7
ROW: 1, COL: 3, VALUE: 47.7
ROW: 1, COL: 4, VALUE: 43.9
ROW: 1, COL: 1, VALUE: 2.0
ROW: 1, COL: 2, VALUE: 2.4
ROW: 1, COL: 3, VALUE: 42.8
ROW: 1, COL: 4, VALUE: 52.8
* FOREIGN
INVESTMENTS 14.2%
** FOREIGN
INVESTMENTS 12.6%
FIDELITY TARGET TIMELINE 2003
INVESTMENTS JANUARY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
NONCONVERTIBLE BONDS - 43.9%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
AEROSPACE & DEFENSE - 2.8%
DEFENSE ELECTRONICS - 2.8%
Raytheon Co. 6 1/2%, 7/15/05 Baa $ 500,000 $ 503,605
DURABLES - 2.3%
TEXTILES & APPAREL - 2.3%
Levi Strauss & Co. 7%, 11/1/06 (a) Baa 400,000 407,625
ENERGY - 1.7%
OIL & GAS - 1.7%
Union Oil Co. of California 9 1/8%, 2/15/06 Baa 265,000 312,122
FINANCE - 25.3%
BANKS - 19.2%
Bayerische Landesbank Girozentrale
yankee 6 3/8%, 10/15/05 Aaa 200,000 203,268
First Security Corp. 7%, 7/15/05 Baa 375,000 390,484
First Tennessee National Corp.
6 3/4%, 11/15/05 Baa 200,000 205,740
Merita Bank Ltd. yankee 6 1/2%, 1/15/06 A3 150,000 148,839
Midland Bank PLC yankee 7 5/8%, 6/15/06 Aa3 300,000 320,319
St. George Bank Ltd. yankee 7.15%,
10/15/05 (a) Baa 500,000 521,710
Signet Bank 7.80%, 9/15/06 Baa 250,000 275,205
Society National Bank 7 1/4%, 6/1/05 A1 500,000 529,990
Sovran Financial Corp. 9 1/4%, 6/15/06 A1 125,000 148,568
Swiss Bank 6 3/4%, 7/15/05 Aa2 500,000 516,965
Union Planters Corp. 6 3/4%, 11/1/05 Baa 150,000 152,927
3,414,015
CREDIT & OTHER FINANCE - 3.5%
Bank of Montreal Chicago Branch
6.10%, 9/15/05 A1 125,000 123,928
Fleet Financial Group, Inc. 7 1/8%, 4/15/06 A3 375,000 394,080
Southwestern Bell Capital Corp.
7.13%, 6/1/05 A2 100,000 107,242
625,250
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
FINANCE - CONTINUED
INSURANCE - 1.2%
URC Holdings Corp. 7 7/8%, 6/30/06 (a) Baa $ 200,000 $ 215,912
SAVINGS & LOANS - 1.4%
Washington Mutual, Inc. 7 1/4%, 8/15/05 A3 234,000 247,504
TOTAL FINANCE 4,502,681
MEDIA & LEISURE - 4.1%
BROADCASTING - 0.6%
Time Warner, Inc. 7 3/4%, 6/15/05 Ba1 111,000 118,433
PUBLISHING - 2.2%
News America Holdings, Inc.
8 1/2%, 2/15/05 Baa 350,000 385,431
RESTAURANTS - 1.3%
Darden Restaurants, Inc. 6 3/8%, 2/1/06 Baa 85,000 82,668
Wendy's International, Inc. 6.35%, 12/15/05 Baa 150,000 148,835
231,503
TOTAL MEDIA & LEISURE 735,367
NONDURABLES - 2.9%
TOBACCO - 2.9%
Philip Morris Companies, Inc. 7%, 7/15/05 A2 500,000 512,610
RETAIL & WHOLESALE - 2.3%
GENERAL MERCHANDISE STORES - 2.3%
Dayton Hudson Corp. 7 1/2%, 7/15/06 Baa 375,000 402,128
UTILITIES - 2.5%
GAS - 2.5%
Columbia Gas System, Inc. 6.80%, 11/28/05 Baa 150,000 154,332
InterNorth, Inc. 9 5/8%, 3/15/06 Baa 245,000 294,858
449,190
TOTAL NONCONVERTIBLE BONDS
(Cost $7,555,033) 7,825,328
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 47.7%
MOODY'S PRINCIPAL VALUE
RATINGS AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 40.0%
11 5/8%, 11/15/04 Aaa $ 2,270,000 $ 3,044,274
10 3/4%, 8/15/05 Aaa 3,095,000 4,073,299
7,117,573
U.S. GOVERNMENT AGENCY OBLIGATIONS - 7.7%
Federal Farm Credit Bank:
7.35%, 3/24/05 Aaa 150,000 163,500
7.26%, 5/2/05 Aaa 500,000 542,890
Financing Corp. stripped principal
0%, 11/11/03 Aaa 770,000 557,072
Freddie Mac 8%, 1/26/05 Aaa 100,000 112,418
1,375,880
TOTAL U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS
(Cost $8,299,950) 8,493,453
FOREIGN GOVERNMENT OBLIGATIONS - 4.7%
Saskatchewan Province yankee 8%, 7/15/04 A3 500,000 551,750
Ontario Province 7%, 8/4/05 Aa3 275,000 292,069
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $832,686) 843,819
CASH EQUIVALENTS - 3.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.59%, dated
1/30/98 due 2/2/98 $ 659,307 659,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $17,346,669) $ 17,821,600
LEGEND
1. Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At the
period end, the value of these securities amounted to $1,145,247 or
6.5% of net assets.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 70.6% AAA, AA, A 65.2%
Baa 25.0% BBB 28.0%
Ba 0.7% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 85.8%
Canada 5.5
Australia 3.0
Switzerland 3.0
United Kingdom 1.8
Finland 0.9
TOTAL 100.0%
Purchases and sales of securities, other than short-term securities,
aggregated $8,175,981 and $4,132,703, respectively, of which U.S.
government and government agency obligations aggregated $5,335,421 and
$2,657,154, respectively.
INCOME TAX INFORMATION
At January 31, 1998, the aggregate cost of investment securities for
income tax purposes was $17,346,669. Net unrealized appreciation
aggregated $474,931, of which $495,076 related to appreciated
investment securities and $20,145 related to depreciated investment
securities.
The fund intends to elect to defer to its fiscal year ending July 31,
1998 approximately $38,000 of losses recognized during the period
November 1, 1996 to July 31, 1997.
At July 31, 1997, the fund had a capital loss carryforward of
approximately $12,000 all of which will expire on July 31, 2005.
FIDELITY TARGET TIMELINE 2003
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JANUARY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 17,821,600
AGREEMENTS OF $659,000) (COST $17,346,669) -
SEE ACCOMPANYING SCHEDULE
CASH 20,864
INTEREST RECEIVABLE 349,012
RECEIVABLE FROM INVESTMENT ADVISER FOR EXPENSE REDUCTIONS 4,432
TOTAL ASSETS 18,195,908
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 550,604
DISTRIBUTIONS PAYABLE 909
OTHER PAYABLES AND ACCRUED EXPENSES 20,005
TOTAL LIABILITIES 571,518
NET ASSETS $ 17,624,390
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 17,122,897
UNDISTRIBUTED NET INVESTMENT INCOME 1,832
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 24,730
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 474,931
NET ASSETS, FOR 1,790,220 SHARES OUTSTANDING $ 17,624,390
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $9.84
SHARE ($17,624,390 (DIVIDED BY) 1,790,220 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 518,301
INTEREST
EXPENSES
MANAGEMENT FEE $ 31,432
TRANSFER AGENT FEES 14,541
ACCOUNTING FEES AND EXPENSES 30,008
NON-INTERESTED TRUSTEES' COMPENSATION 26
CUSTODIAN FEES AND EXPENSES 660
REGISTRATION FEES 14,500
AUDIT 17,730
LEGAL 1,712
REPORTS TO SHAREHOLDERS 1,842
MISCELLANEOUS 53
TOTAL EXPENSES BEFORE REDUCTIONS 112,504
EXPENSE REDUCTIONS (87,355) 25,149
NET INVESTMENT INCOME 493,152
REALIZED AND UNREALIZED GAIN (LOSS) 75,400
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 204,612
INVESTMENT SECURITIES
NET GAIN (LOSS) 280,012
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 773,164
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTION $ 166
CUSTODIAN CREDITS
FMR REIMBURSEMENT 87,189
$ 87,355
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 493,152 $ 714,934
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 75,400 12,474
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 204,612 491,377
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 773,164 1,218,785
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (492,358) (714,423)
SHARE TRANSACTIONS 5,699,768 10,023,642
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 484,078 704,303
COST OF SHARES REDEEMED (2,052,362) (5,000,004)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,131,484 5,727,941
FROM SHARE TRANSACTIONS
REDEMPTION FEES 663 1,697
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,412,953 6,234,000
NET ASSETS
BEGINNING OF PERIOD 13,211,437 6,977,437
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 17,624,390 $ 13,211,437
INCOME OF $1,832 AND $1,038, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 586,880 1,066,648
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 49,967 74,936
REDEEMED (212,270) (530,748)
NET INCREASE (DECREASE) 424,577 610,836
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED FEBRUARY 8, 1996
JANUARY 31, 1998 JULY 31, (COMMENCEMENT
OF OPERATIONS) TO
JULY 31,
(UNAUDITED) 1997 1996
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.670 $ 9.240 $ 10.000
INCOME FROM INVESTMENT OPERATIONS .331 D .634 D .307
NET INVESTMENT INCOME
NET REALIZED AND UNREALIZED GAIN (LOSS) .170 .428 (.762)
TOTAL FROM INVESTMENT OPERATIONS .501 1.062 (.455)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.331) (.634) (.306)
REDEMPTION FEES ADDED TO PAID IN CAPITAL .000 .002 .001
NET ASSET VALUE, END OF PERIOD $ 9.840 $ 9.670 $ 9.240
TOTAL RETURN B, C 5.29% 11.94% (4.53)%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 17,624 $ 13,211 $ 6,977
RATIO OF EXPENSES TO AVERAGE NET ASSETS .35% A, E .35% E .35% A, E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .35% A .34% F .34% A, F
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE 6.82% A 6.76% 6.93% A
NET ASSETS
PORTFOLIO TURNOVER RATE 58% A 83% 180% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended January 31, 1998 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Target Timeline 1999, Fidelity Target Timeline 2001 and
Fidelity Target Timeline 2003 (the funds) are funds of Fidelity Boston
Street Trust (the trust). 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. Each fund is authorized to issue an unlimited number of shares.
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 funds:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities (including restricted securities) for which quotations are
not readily available are valued at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of
original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net investment income. Distributions from realized
gains, if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for market discount, capital loss carryforwards and losses
deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
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
REDEMPTION FEES. Shares held in the funds less than 90 days are
subject to a redemption fee equal to .50% of the proceeds of the
redeemed shares. The fee, which is retained by the funds, is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, 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 funds, 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 funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. Certain funds are permitted to invest in
securities that are subject to legal or contractual restrictions on
resale. These securities generally may be resold in transactions
exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may
be difficult. At the end of the period, the funds had no investments
in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and sales of securities (other than
short-term securities), is included under the caption "Other
Information" at the end of each applicable fund's schedule of
investments.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
each fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
fee was equivalent to an annualized rate of .43% of average net assets
for each fund.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the funds' transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fee was
equivalent to an annualized rate of .20% of the average net assets for
each fund.
ACCOUNTING FEES. FSC maintains each fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above an annual rate of .35% of average net assets.
In addition, certain funds have entered into an arrangement with their
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of each applicable fund's
expenses.
For the period, the reductions under these arrangements are shown
under the caption "Other Information" on each applicable fund's
Statement of Operations.
6. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
more than 5% of the outstanding shares of the following funds:
BENEFICIAL INTEREST
FUND % OWNERSHIP
Fidelity Target Timeline 2001 34.02%
Fidelity Target Timeline 2003 22.49%
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc. London, England
Fidelity Management & Research
(Far East) Inc. Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President
Christine J. Thompson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
Bank of New York
New York, NY
FIDELITY'S TAXABLE BOND FUNDS
Capital & Income Fund
Ginnie Mae Fund
International Bond Fund
Government Securities Fund
Intermediate Bond Fund
Investment Grade Bond Fund
New Markets Income Fund
Short-Intermediate Government Fund
Short-Term Bond Fund
Spartan(registered trademark) Ginnie Mae Fund
Spartan Government Income Fund
Spartan Investment Grade Bond Fund
Spartan Limited Maturity
Government Fund
Spartan Short-Intermediate Government Fund
Spartan Short-Term Bond Fund
Target Timeline 1999, 2001 & 2003
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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(8 a.m. - 9 p.m.)
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