SPARTAN(registered trademark)
(REGISTERED TRADEMARK)
CALIFORNIA
MUNICIPAL MONEY MARKET
FUND
SEMIANNUAL REPORT
AUGUST 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 6 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 8 A SUMMARY OF THE MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 9 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 21 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 25 NOTES TO THE FINANCIAL STATEMENTS.
PROXY VOTING RESULTS 27
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.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The short-term volatility that hit the stock and bond markets in the
spring re-emerged in August, and many equity and fixed-income
securities retreated from their 1997 highs. Still, the Standard &
Poor's 500 Index was up roughly 23% year-to-date through August 31,
more than twice its historical annual average. The bond markets have
posted moderate returns through the first eight months of the year,
primarily influenced by positive news on the inflation front.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
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
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income and the effect of the fund's $5 account closeout fee
on an average-sized account. Yield measures the income paid by a fund.
Since a money market fund tries to maintain a $1 share price, yield is
an important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET 1.66% 3.27% 16.12% 32.14%
CALIFORNIA TAX-FREE 1.51% 2.98% 14.16% 27.84%
MONEY MARKET FUNDS AVERAGE
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on November 27, 1989. 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. To measure how the
fund's performance stacked up against its peers, you can compare it to
the California tax-free money market funds average, which reflects the
performance of California tax-free money market funds with similar
objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 46 mutual funds. (The periods
covered by the IBC Financial Data, Inc. numbers are the closest match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET 3.27% 3.03% 3.65%
CALIFORNIA TAX-FREE 2.98% 2.68% 3.22%
MONEY MARKET FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
9/1/97 6/2/97 3/3/97 12/2/96 9/2/96
SPARTAN CALIFORNIA 2.93% 3.49% 3.08% 3.22% 3.22%
MUNICIPAL MONEY MARKET
IF FIDELITY HAD NOT REIMBURSED 2.83% 3.39% 2.93% 3.07% 3.07%
CERTAIN FUND EXPENSES
CALIFORNIA TAX-FREE MONEY 2.81% 3.14% 2.74% 2.95% 2.84%
MARKET FUNDS AVERAGE
SPARTAN CALIFORNIA 5.05% 6.01% 5.31% 5.55% 5.55%
MUNICIPAL MONEY MARKET -
TAX-EQUIVALENT
IF FIDELITY HAD NOT REIMBURSED 4.88% 5.84% 5.05% 5.29% 5.29%
CERTAIN FUND EXPENSES
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. If the advisor had not reimbursed
certain fund expenses during the periods shown, the yields would have
been lower. You can compare these yields to the California tax-free
money market funds average as tracked by IBC Financial Data, Inc. Or
you can look at the fund's tax-equivalent yield, which is based on a
combined effective 1997 federal and state income tax rate of 41.95%. A
portion of the funds income may be subject to the alternative minimum
tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields on
taxable investments. However,
a straight comparison between
the two may be misleading
because it ignores the way
taxes reduce taxable returns.
Tax-equivalent yield - the yield
you'd have to earn on a similar
taxable investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
Government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money market
fund will maintain a $1 share
price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Tanya Roy became Portfolio Manager of Spartan
California Municipal Money Market Fund on June 1, 1997.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS,
TANYA?
A. While the Federal Reserve Board in mid-1996 indicated its bias
toward raising short-term interest rates to slow economic growth and
head off inflation, it had not acted by early 1997 and the market
became complacent with the steady Fed policy. That sentiment changed
in late February, however, after Fed Chairman Alan Greenspan's
semiannual Humphrey-Hawkins testimony before Congress. In his
testimony, Greenspan explained his concerns that low unemployment
might exert upward pressure on the economy's core inflation. More
importantly, he mentioned the possibility that the Fed might raise the
rate banks charge each other for overnight loans - known as the fed
funds target rate - from the 5.25% level it had maintained since
January 1996. The reason behind raising rates would be to curb
inflation before it passed through to the consumer. Shortly after
Greenspan's remarks, data for February showed an additional 293,000
non-farm jobs had been added to the economy, lowering unemployment to
5.3%. Interest rates rose as the Fed's March 25 Open Market Committee
meeting approached and fears intensified that there would be a shift
in Fed policy. At that meeting, the Fed raised the fed funds target
rate by 0.25% to 5.50% as expected.
Q. HOW HAS THE ECONOMY PERFORMED SINCE THE FED'S MARCH MEETING?
A. First quarter 1997 data pointed to continued economic strength,
with gross domestic product growing at a stronger-than-expected annual
rate of nearly 5%. In addition, unemployment fell in April to 4.9%,
the lowest level since 1973. Since then, data has shown signs that the
economy weakened somewhat through the second quarter. Perhaps more
importantly, inflation continued to remain in check. In fact, in the
first half of the year there were six consecutive monthly drops in the
producer price index, and the first half of the year's consumer price
index was the lowest in 10 years. Because of this backdrop, the Fed
chose not to change the fed funds target rate at its latest meeting in
early July.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. The fund's weighted average maturity was 40 days entering the
period. Given the strong first-quarter economic data released
throughout the spring, the fund's average maturity initially declined
in anticipation of higher interest rates. Attractive opportunities
appeared in instruments with one-day or one-week effective maturities.
For several weeks, the average yield on these securities was equal to
or in some cases even higher than the yield on one-year notes. This
situation enabled the fund to buy attractive-yielding instruments
without taking on the added risk of buying one-year notes. Moving into
the summer, we entered the season when most California issuers -
including school districts, cities and towns - come to market with a
large supply of one-year notes. They sell these securities to finance
their cash-flow needs for the upcoming fiscal year that typically runs
from July 1 to June 30. Over $4 billion in notes were sold in June and
July alone. As a result, yields reverted to a more historically normal
relationship - with longer-term securities offering higher yields than
short-term notes. The fund participated selectively in the one-year
note market, purchasing those securities that I found to be
attractively priced. As a result, the fund's average maturity
lengthened to 45 days at the end of the period, close to the average
of other California funds.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1997, was 2.93%, compared
to 3.09% six months ago. The latest yield was the equivalent of a
taxable yield of 5.05% for California investors in the 41.95% combined
federal and state tax bracket. The fund's total return during the
six-month period was 1.66%. That beat the total return of 1.51% for
the California tax-free money market funds average, according to IBC
Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. Should the economy continue to exhibit healthy growth in the third
and fourth quarters of 1997, renewed inflation pressures could result,
leading to higher interest rates. Given this risk, I expect to manage
the fund to be able to take advantage of higher rates over the next
six to 12 months. I also expect to find opportunities in the market by
taking advantage of aberrations caused by technical factors, such as
supply and demand imbalances, seasonal factors and corporate buying
trends, among others. These factors can play out in a day, a week or
over several months, and are an important part of my ongoing strategy.
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.
FUND FACTS
GOAL: high current tax-free
income for California residents
while maintaining a stable
$1.00 share price
FUND NUMBER: 457
TRADING SYMBOL: FSPXX
START DATE: November 27, 1989
SIZE: as of August 31, 1997,
more than $1.3 billion
MANAGER: Tanya Roy, since
June 1997; manager, various
Fidelity and Spartan municipal
money market funds; joined
Fidelity in 1989
(checkmark)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
8/31/97 2/28/97 8/31/96
0 - 30 74 71 72
31 - 90 16 5 10
91 - 180 0 21 2
181 - 397 10 3 16
WEIGHTED AVERAGE MATURITY
8/31/97 2/28/97 8/31/96
SPARTAN CALIFORNIA MUNICIPAL 45 DAYS 40 DAYS 63 DAYS
MONEY MARKET
CALIFORNIA TAX-FREE 47 DAYS 40 DAYS 52 DAYS
MONEY MARKET FUNDS AVERAGE *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF AUGUST 31, 1997 AS OF FEBRUARY 28, 1997
Row: 1, Col: 1, Value: 12.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 20.0
Row: 1, Col: 4, Value: 65.0
Variable rate demand
notes (VRDNs) 64%
Commercial paper
(including commerical
paper mode) 12%
Tender bonds 1%
Municipal notes 23%
Variable rate demand
notes (VRDNs) 65%
Commercial paper
(including commercial
paper mode) 20%
Tender bonds 3%
Municipal notes 12%
Row: 1, Col: 1, Value: 22.0
Row: 1, Col: 2, Value: 2.0
Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 64.0
* SOURCE: IBC'S MONEY FUND SOURCE(registered trademark)
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - 99.0%
Alameda County Ind. Dev. Auth. Ind. Dev. Rev.
(Edward L. Shimmon, Inc. Proj.) Series 1996 A, 3.35%,
LOC Banque Nationale de Paris, VRDN (b) $ 3,600 $ 3,600
Anaheim Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
(Bel Age Apts. Proj.) 3.05% (FNMA Guaranteed) (b) 5,100 5,100
(Parka Vista Apts.) Series 1993 A, 3.25%,
LOC Citibank, N.A. (b) 9,800 9,800
(Sage Park Proj.) Series A, 3.15%,
LOC Bank of America (b) 3,900 3,900
Azusa Multi-Family Hsg. Rev. (Pacific Glen Apt. Proj.)
Series 1994, 3.50% (Continental Casualty Co.
Guaranteed) VRDN 4,600 4,600
Barstow Multi-Family Hsg. Rev.
(Rimrock Village Apt. Proj.) Series 1996, 3.20%,
LOC Federal Home Loan Bank, VRDN (b) 3,000 3,000
Berkeley Unified School Dist. (Alameda County) TRAN
4.25% 6/30/98 5,500 5,516
California Dept. of Wtr. Resources Wtr. Rev.
Series 1, 3.55% 9/30/97 (Liquidity Facility Canadian
Imperial Bank of Commerce, Swiss Bank Corp.) CP 2,429 2,429
California Econ. Dev. Auth. Ind. Dev. Rev., VRDN:
(Calco, LLC Proj.) Series 1997, 3.75%,
LOC Wells Fargo Bank, N.A. 1,200 1,200
(Joseph Schmidt Proj.) Series A, 3.35%,
LOC Banque Nationale de Paris (b) 2,000 2,000
(Kuhnash Properties III/Arkay Plastics, CA Proj.)
Series 1997, 3.50%, LOC PNC Bank, Ohio (b) 1,500 1,500
California Gen. Oblig.:
Bonds 5% 10/1/97 4,570 4,574
CP:
3.65% 9/15/97 7,800 7,800
3.60% 9/16/97 9,800 9,800
3.65% 9/16/97 16,500 16,500
3.65% 9/17/97 4,000 4,000
3.45% 10/14/97 1,800 1,800
3.55% 10/14/97 2,000 2,000
3.50% 10/15/97 15,200 15,200
3.55% 10/15/97 10,900 10,900
3.60% 10/16/97 5,600 5,600
3.55% 10/20/97 8,400 8,400
3.65% 10/21/97 8,600 8,600
3.65% 10/22/97 8,700 8,700
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
California Gen. Oblig.: - continued
Participating VRDN (c):
3.50% (Liquidity Facility Society Generale, France) $ 4,200 $ 4,200
3.50% (Liquidity Facility Society Generale, France) 10,500 10,500
Series 1996 L, 3.40% (FGIC Insured)
(Liquidity Facility Caisse des Depots et Consignations) 16,110
16,110
California Hsg. Fin. Agcy. Mtg. Rev. Bonds Series 1996 J,
3.95%, tender 8/3/98 (FGIC Insured) (b) 10,500 10,500
California Hsg. Fin. Agcy. Single Family Mtg. Bonds
Series 1997 B, 3.70%, tender 4/1/98
(Morgan Stanley Flex Agreements Guaranteed) (b) 9,000 9,000
California Hsg. Fin. Agcy.:
Participating VRDN (c):
Series 1993 B, 3.25%
(Liquidity Facility Commerzbank, Germany) 7,660 7,660
Series 1994 E, 3.40%
(Liquidity Facility Merrill Lynch & Co., Inc.) (b) 5,450 5,450
Series 1994 H, 3.46% (AMBAC Insured)
(Liquidity Facility Citibank, N.A.) (b) 6,700 6,700
Series 1994-1, 3.46% (Liquidity Facility State
Street Bank & Trust Co.) (b) 12,213 12,213
Series 1995 B, 3.40%
(BPA Credit Suisse First Boston) (b) 1,360 1,360
Series 1995 M, 3.40%
(Liquidity Facility Credit Suisse First Boston) (b) 3,900 3,900
Series 1996 C-1, 3.41%
(Liquidity Facility Bank of America) (b) 1,925 1,925
Series 1996 C-2, 3.41%
(Liquidity Facility Bank of America) (b) 4,075 4,075
3.25% (Liquidity Facility Banque Nationale de Paris)
(BPA Merrill Lynch & Co., Inc.) 3,070 3,070
3.40% (Liquidity Facility Commerzbank, Germany) (b) 1,300 1,300
3.40% (Liquidity Facility Bayerische Hypotheken-und
Weschel) (b) 14,090 14,090
3.40% (Liquidity Facility Banque Nationale de Paris)
(BPA Merrill Lynch & Co., Inc.) (b) 11,200 11,200
VRDN:
Multi-Family Hsg. Rev. III:
Series B, 3.20%, LOC Morgan Guaranty Trust Co., NY,
Credit Suisse First Boston (b) 7,000 7,000
Series C, 3.20%, LOC Morgan Guaranty Trust Co., NY,
Credit Suisse First Boston (b) 6,630 6,630
California Poll. Cont. Fin. Auth.:
Bonds (Chevron USA, Inc. Proj.) Series 1983,
3.90%, tender 11/15/97 1,400 1,401
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
California Poll. Cont. Fin. Auth.: - continued
(Pacific Gas & Elec. Co. Proj.):
VRDN:
Series 1996 A, 3.05%, LOC Swiss Bank Corp. (b) $ 31,000 $ 31,000
Series 1996 B, 3.10%, LOC Rabobank Nederland (b) 2,500 2,500
Series 1996 C, 3.45%, LOC Bank of America 1,200 1,200
Bonds, CP mode:
Series 1996 D, 3.65%,
LOC Union Bank of Switzerland 3,000 3,000
Series 1996 D, 3.65%,
LOC Union Bank of Switzerland 6,100 6,100
Series 1996 E, 3%,
LOC Morgan Guaranty Trust Co., NY 8,800 8,800
Series 1996 E, 3.60%,
LOC Morgan Guaranty Trust Co., NY 21,000 21,000
Series 1996 E, 3.60%,
LOC Morgan Guaranty Trust Co., NY 7,200 7,200
(Taormina Ind., Inc. Proj.) Series 1996 A, 3.15%,
LOC Sanwa Bank Ltd., Japan, VRDN (b) 3,100 3,100
(Western Waste Ind. Proj.) Series 1994 A, 3.15%,
LOC Union Bank of California, VRDN (b) 3,500 3,500
California Poll. Cont. Fin. Auth. Resource Recovery Rev., VRDN:
(Honey Lake Pwr. Proj.) Series 1988, 3.55%,
LOC Banque Nationale de Paris (b) 1,700 1,700
(Malaga Proj.) Series A, 3.55%, LOC Bank of America (b) 1,100 1,100
(UltraPower Rocklin Proj.):
Series 1988 A, 3.55%, LOC Bank of America (b) 2,300 2,300
Series 1988 B, 3.55%, LOC Bank of America (b) 800 800
California Poll. Cont. Fin. Auth. Solid Waste Disp. Rev., VRDN:
(Athens Disp. Co., Inc. Proj.) Series 1995, 3.10%,
LOC Wells Fargo Bank, San Francisco, N.A. (b) 7,945 7,945
(EDCO Disp.) Series 1996 A, 3.10%,
LOC Wells Fargo Bank, N.A. (b) 7,500 7,500
(Sanifill, Inc. Proj.) Series 1995 A, 3.15%,
LOC California State Teachers Retirement Sys. (b) 1,500 1,500
California School Cash Reserves Prog. TRAN Series 1997,
4.75% 7/2/98, LOC Ind. Bank of Japan Ltd. 29,000 29,209
California Statewide Commty. Dev. Auth., VRDN:
(Biocol Investments) 3.40%,
LOC Union Bank of California (b) 900 900
(Bro-Co Gen. Partnership Proj.) Series 1990, 3.25%,
LOC California State Teachers Retirement Sys. (b) 3,880 3,880
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Auth., VRDN: - continued
(Covenant Retirement Commty., Inc.):
3.25%, LOC LaSalle Nat'l. Bank $ 7,900 $ 7,900
Series1995, 3.25%, LOC LaSalle Nat'l. Bank 4,000 4,000
(Datatape, Inc. Proj.) Series 1996 D, 3.40%,
LOC Corestates Bank, N.A. (b) 1,530 1,530
(Duke, Inc. Project) Series 1996 E, 3.35%,
LOC Wells Fargo Bank, N.A. (b) 1,410 1,410
(Jaygee Realty Co.) Series 1992, 3.40%,
LOC Union Bank of California (b) 300 300
(K.U.M. Ltd. Proj.) Series 1992, 3.40%,
LOC Union Bank of California (b) 2,200 2,200
(Michigan Hanger Ind. Proj.) Series 1992, 3.40%,
LOC Union Bank of California (b) 600 600
(Northwest Pipe & Casing Co. Proj.) Series 1990, 3.25%,
LOC California State Teachers Retirement Sys. (b) 3,250 3,250
(Rapelli of California, Inc. Proj.) 3.25%,
LOC California State Teachers Retirement Sys. (b) 2,500 2,500
(Rix Ind. Proj.) Series 1996 I, 3.40%,
LOC Wells Fargo Bank, N.A. (b) 1,920 1,920
(Sunclipse, Inc.):
(Alhambra Proj.) Series 1989, 3.25%,
LOC California State Teachers Retirement Sys. (b) 3,200 3,200
(Union City Proj.) 3.25%,
LOC California State Teachers Retirement Sys. (b) 2,135 2,135
(Watt Four, LLC) 3.75%,
LOC Sanwa Bank Ltd., Japan (b) 900 900
California Statewide Commty. Dev. Auth. Apt. Dev. Rev.
Rfdg. (Irvine Apts.) VRDN:
Series 1995 A-5, 2.95% (FNMA Guaranteed) 7,425 7,425
Series 1995 A-7, 3.05% (FNMA Guaranteed) (b) 1,000 1,000
California Statewide Commty. Dev. Auth. Ind. Dev. Rev., VRDN:
(American River Packaging) 3.25%,
LOC California State Teachers Retirement Sys. (b) 1,765 1,765
(Levecke, LLC Proj.) Series 1996 H, 3.40%,
LOC Union Bank of California (b) 2,500 2,500
(Lynwood Enterprises, LLC Proj.) Series 1997 D, 3.45%,
LOC Fleet National Bank (b) 2,000 2,000
(Propak-CA Corp. Proj.) Series 1994 B, 3.25%,
LOC California State Teachers Retirement Sys. (b) 2,410 2,410
(Setton Prop., Inc. Proj.) Series 1995 E, 3.40%,
LOC Wells Fargo Bank, San Francisco, N.A. (b) 1,000 1,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Auth. Multi-Family
Hsg. Rev., VRDN:
(Canyon Creek Apts.) Series 1995 C, 3.15%
(FNMA Guaranteed) (b) $ 1,300 $ 1,300
(Oakmont of Danville, LLC) (Sunrise of Danville Proj.)
3.15%, LOC Heller Fin., Inc. (b) 6,165 6,165
Camarillo Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
(Hacienda de Camarillo Proj.) Series 1996, 3.15%
(FNMA Guaranteed) (b) 10,520 10,520
(Heritage Park Apts.) Series 1989 A, 3.05%
(FNMA Guaranteed) (b) 7,000 7,000
Central Valley School Fin. Auth. TRAN Series 1997,
4.50% 8/27/98 6,100 6,135
Chula Vista Ind. Dev. Rev. (San Diego Gas & Elec. Co.):
Series B, 3.15%, VRDN (b) 9,800 9,800
Series B, 3.75%, VRDN (b) 11,500 11,500
Bonds:
Series C, 3.65%, CP mode (b) 3,000 3,000
Series D, 3.65%, CP mode (b) 6,500 6,500
Series E, 3.70%, CP mode (b) 2,500 2,500
Clovis Unified School Dist. (Fresno County) TRAN
4.25% 6/30/98 3,100 3,111
Contra Costa County Multi-Family Hsg. Rev.
(Del Norte Place Apt.) Series 1994 A, 3.40%,
LOC Sumitomo Bank Ltd., VRDN (b) 2,800 2,800
Contra Costa Wtr. Dist. Participating VRDN, Series 1996,
3.35% (Liquidity Facility Societe Generale, France) (c) 6,425 6,425
Covina Redev. Agcy. Multi-Family Hsg. Rev.
(Shadowhills Apt. Proj.) Series 1994 A, 3.50%
(Continental Casualty Co. Guaranteed) VRDN 500 500
Emeryville Redev. Agcy. Multi-Family Hsg. (Emerybay Apts. II)
3.20%, LOC Bank of America, VRDN (b) 14,000 14,000
Escondido Commty. Dev. Commission
(Escondido Promenade Proj.) 3.15%,
LOC Bank of America, VRDN (b) 1,000 1,000
Fairfield Ind. Dev. Auth., VRDN:
Ind. Dev. Rev. 3.25%, LOC Wells Fargo Bank, N.A. (b) 1,800 1,800
(Meyer Cookware Ind. Proj.) 3.35%,
LOC Banque Nationale de Paris (b) 4,400 4,400
Fillmore City (Water Improvement Proj.) Series 1997,
3.40%, LOC Union Bank of California, VRDN 1,545 1,545
Fremont (Alameda County) TRAN 4.25% 7/1/98 4,205 4,218
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Fremont Multi-Family Hsg. Rev.
(Treetops Apts.) Series 1996 A, 3.15%
(FNMA Guaranteed) VRDN (b) $ 6,000 $ 6,000
Fresno County TRAN:
4.75% 9/29/97 6,700 6,706
4.25% 7/1/98 10,900 10,941
Garden Grove Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
(Cal-Malabar Apts.) Series 1997 A, 3.15%
(FNMA Guaranteed) 4,400 4,400
(Valley View Sr. Villas Proj.) Series1990 A, 3.25%,
LOC Wells Fargo Bank, N.A. (b) 6,200 6,200
Huntington Park Multi-Family Hsg. Rev.
(Casa Rita Apts.) Series 1994 A, 3.20%,
LOC Tokai Bank Ltd., VRDN (b) 4,200 4,200
Kern County TRAN 4.50% 10/2/97 12,900 12,908
LaVerne Ind. Dev. Auth.
(Paper-Pak Products, Inc. Proj.) 3.60%,
LOC First Union Nat'l. Bank of North Carolina, VRDN (b) 6,185 6,185
Lassen Muni. Util. Dist. Rev. Rfdg.
Series 1996 A, 3.40% (FSA Insured)
(Liquidity Facility Credit Local de France) VRDN (b) 6,175 6,175
Livermore Multi-Family Mtg. Rev.
(Portola Meadows Apts.) Series 1989 A, 3.15%,
LOC Bank of America, VRDN (b) 10,400 10,400
Loma Linda Multi-Family Hsg. Rev.
(Loma Linda Springs Apts.) Series 1989, 3.10%,
LOC Tokai Bank Ltd., VRDN (b) 700 700
Long Beach Hbr. Participating VRDN, Series 1996, 3.40%
(Liquidity Facility Societe Generale, France) (b)(c) 5,880 5,880
Long Beach Hbr. Dept., CP:
Series A, 3.60% 10/7/97 (Liquidity
Facility Canadian Imperial Bank of Commerce) (b) 6,800 6,800
Series A, 3.65% 10/7/97 (Liquidity
Facility Canadian Imperial Bank of Commerce) (b) 2,000 2,000
Los Angeles Commty. Redev. Agcy. Multi-Family
Hsg. Rev., VRDN:
(Academy Village Apts. Proj.) Series 1989 A, 3.15%,
LOC Swiss Bank Corp. (b) 5,000 5,000
(Promenade Towers) 3.20%, LOC Tokai Bank Ltd. 1,000 1,000
Los Angeles County Cap. Asset Leasing Corp., CP:
3.80% 9/12/97 5,250 5,250
3.60% 10/16/97 4,500 4,500
Los Angeles County Ind. Dev. Auth. (Caitac & JAE Proj.)
3.40%, LOC Union Bank of California, VRDN (b) 2,670 2,670
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Los Angeles County Metropolitan Trans. Auth.
Participating VRDN (c):
Series 1993 A, 3.45% (MBIA Insured)
(Liquidity Facility Societe Generale, France) $ 19,800 $ 19,800
3.30% (Liquidity Facility Societe Generale, France) 10,200 10,200
CP:
Series A, 3.80% 9/4/97 18,930 18,930
Series A, 3.75% 9/11/97 2,200 2,200
Series A, 3.50% 10/8/97 1,000 1,000
Series A, 3.60% 10/8/97 1,400 1,400
Los Angeles County Multi-Family Hsg. Rev., VRDN:
(Malibu Meadows Proj.):
Series 1991 A, 3.40%, LOC Sumitomo Bank Ltd. 11,700 11,700
Series 1991 B, 3.40%, LOC Sumitomo Bank Ltd. 3,200 3,200
(Meadowridge Apt. Proj.) Series 1994 B, 3.50%
(Continental Casualty Co. Guaranteed) 4,000 4,000
(Park Sierra Apts. Proj.) 3.30%, LOC Citibank, N.A. (b) 39,200
39,200
Los Angeles County Participating VRDN, Series 1996 A,
3.30% (Liquidity Facility Societe Generale, France) (c) 10,570
10,570
Los Angeles County TRAN Series A, 4.50% 6/30/98 12,600 12,665
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant, CP:
3.65% 9/17/97, LOC Toronto-Dominion Bank,
Bank of Nova Scotia 2,900 2,900
3.90% 10/10/97, LOC Toronto-Dominion Bank,
Bank of Nova Scotia 23,000 23,000
3.60% 10/23/97, LOC Toronto-Dominion Bank,
Bank of Nova Scotia 6,200 6,200
Los Angeles Hbr. Dept. Participating VRDN (c):
Series 1996 B, 3.35% (BPA Bank of New York) (b) 19,800 19,800
Series 1996 B, 3.40%
(Liquidity Facility Societe Generale, France) (b) 8,950 8,950
Los Angeles Multi-Family Hsg. Rev.
(Beverly Park Apts.) Series 1988 A, 3.15%,
LOC Chase Manhattan Bank, VRDN (b) 3,000 3,000
Los Angeles Ontario International Arpt.
Participating VRDN, Series 1996, 3.40%
(Liquidity Facility Societe Generale, France) (b)(c) 2,600 2,600
Los Angeles Participating VRDN, Series 1996,
3.35% (Liquidity Facility Societe Generale, France) (c) 15,970
15,970
Los Angeles TRAN 4.50% 6/30/98 8,400 8,441
Los Angeles Unified School Dist. TRAN:
Series 1996-97 B, 4.50% 9/30/97 4,500 4,503
Series 1997-98, 4.50% 7/1/98 15,500 15,583
Los Angeles Wastewtr. Sys. Rev. 3.65% 9/11/97,
LOC Morgan Guaranty Trust Co., NY,
Union Bank of Switzerland, CP 1,500 1,500
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Monterey Ind. Dev. Auth. Rev.
(Slautterback Corp. Proj.) Series 1996 A, 3.20%,
LOC Bayerische Vereinsbank, VRDN (b) $ 2,000 $ 2,000
Newark Ind. Dev. Auth. Rev.
(Gas Tech. Proj.) Series 1989 A, 3.30%,
LOC Union Bank of Switzerland, VRDN (b) 3,000 3,000
Oakland Unified School Dist. (Alameda County)
Series 1996-97, TRAN 4.25% 10/14/97 4,600 4,603
Oceanside Multi-Family Hsg. Rev. (Lakeridge Apt. Proj.)
Series 1994, 3.50%
(Continental Casualty Co. Guaranteed) VRDN 6,000 6,000
Ontario Ind. Dev. Auth. (Safari Land Proj.) Series 1989,
3.25%, LOC Bank of America, VRDN (b) 3,200 3,200
Orange County Apt. Dev. Rev.:
Participating VRDN (c):
Series 1996 A, 3.46%, LOC Citibank, N.A. (b) 10,900 10,900
Series 1996 B, 3.36%, LOC Citibank, N.A. 12,700 12,700
Rfdg. VRDN:
(Harbor Pointe Apts.) Series 1992 D,
3.15%, LOC Citibank, N.A. 2,600 2,600
(Larkspur Canyon Apts./Bay Apt. Commtys., Inc.)
Series 1997 A, 3.10% (FNMA Guaranteed). 6,635 6,635
(Trabuco Woods Apts.) Series 1993 B, 3.30%,
LOC Wells Fargo Bank, N.A. 2,670 2,670
VRDN:
(Alicia Viejo Proj.) Series 1986 A, 3.50%,
LOC Bank of Tokyo-Mitsubishi Ltd. (b) 3,460 3,460
(Foothill Oaks Apts. Proj.) Series 1989 B, 3.25%,
LOC Bank of America (b) 12,400 12,400
(Frost Construction Proj.) Series 1985 B, 3.25%,
LOC Wells Fargo Bank, N.A. 2,000 2,000
(Hidden Hills Apts.) Series 1985 U-C, 3.25%,
LOC Chase Manhattan Bank 13,600 13,600
(Laguna Summit Apts.) Series 1985 X, 3.25%,
LOC Tokai Bank Ltd. 8,500 8,500
(Lantern Pines Proj.-Frost Group) 3.25%,
LOC Bank of Tokyo-Mitsubishi Ltd. 11,350 11,350
(Monarch Bay Apt. Proj.) Series 1985 T, 3.20%,
LOC Bank of Tokyo-Mitsubishi Ltd. 14,000 14,000
(Vista Verde Apts. Proj.) Series 1988 A, 3.35%,
LOC Wells Fargo Bank, N.A. (b) 12,050 12,050
(Wood Canyon Villas) Series 1991 B, 3.10%,
LOC Bank of America (b) 13,300 13,300
(Yorba Linda Assoc.) Series 1985 D, 3.15%,
LOC Bank of Tokyo-Mitsubishi Ltd. 8,100 8,100
Orange Ind. Dev. Rev. (Control Air Conditioning Corp./
Ellis Enterprises) Series 1997, 3.45%,
LOC California State Teachers Retirement Sys., VRDN 1,000 1,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Orange County Local Trans. Auth.
Participating VRDN, Series 1997, 3.25%
(Liquidity Facility Bank of New York, N.A.) (c) $ 1,700 $ 1,700
Pleasant Hill Redev. Agcy. Multi-Family Hsg. Rev.
(Chateau III Proj.) Series 1996 A, 3.25%,
LOC Commerzbank, Germany, VRDN (b) 1,460 1,460
Rancho Wtr. Dist. Fin. Auth. Participating VRDN,
3.45% (Liquidity Facility Societe Generale, France) (c) 8,750 8,750
Redondo Beach Multi-Family Hsg. Rev.
(McCandless Senior Hsg. Proj.) Series 1995 A, 3.20%,
LOC Comerica Bank of Detroit, VRDN 5,640 5,640
Riverside County TRAN 4.50% 6/30/98 6,200 6,227
Riverside County Hsg. Auth. Multi-Family Hsg.
Mtg. Rev., VRDN:
(Mt. View Apts.) Series 1995 A, 3.15%,
LOC Federal Home Loan Bank of San Francisco 1,500 1,500
(Polk Apt. Proj.) Series 1985 O, 3.65%
(Household Fin. Corp. Guaranteed) 3,690 3,690
(Tyler Village Proj.) Series 1986 A, 3.35%,
LOC Chase Manhattan Bank (b) 3,900 3,900
Riverside County Ind. Dev. Auth. (Merrick Engineering, Inc.)
3.75%, LOC Wells Fargo Bank, N.A., VRDN (b) 1,320 1,320
Sacramento Muni. Util. Dist. Series I, 3.70% 9/10/97,
LOC Bayerische Landesbank Gironzentrale, CP 2,300 2,300
Sacramento County Arpt. Sys. Participating VRDN (c):
3.30% (Liquidity Facility Societe Generale, France) 8,685 8,685
Series 1996 D, 3.35%
(Liquidity Facility Societe Generale, France) 5,810 5,810
Sacramento Hsg. Auth. Multi-Family Hsg. Rev.
(Chesapeake Commons Holdings, Inc.) Series 1997 A,
3.20%, LOC Bank One, Arizona, VRDN (b) 3,000 3,000
San Bernardino County Hsg. (Alta Park Apts. Proj.) 3.60%,
LOC Sumitomo Bank Ltd., VRDN 5,100 5,100
San Bernardino County Ind. Dev. Auth. Rev., VRDN:
(McClain Citrus, Inc. Proj.) 3.30%,
LOC California State Teachers Retirement Sys. (b) 2,900 2,900
(W & H Voortman, Inc. Proj.) Series 1989, 3.25%,
LOC California State Teachers Retirement Sys. (b) 2,420 2,420
San Diego Participating VRDN, Series 1993 A,
3.35% (Liquidity Facility Bankers Trust Co., NY) (c) 4,920 4,920
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
San Diego Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
(Coral Pointe Apt. Proj.) Rfdg. Series 1993A, 3.45%
(Continental Casualty Co. Guaranteed) $ 5,000 $ 5,000
(Paseo Point Apt.) Series 1994 A, 3.15%,
LOC Bank of Tokyo-Mitsubishi Ltd. 7,950 7,950
San Diego Ind. Dev. Auth. Rev. Rfdg. Bonds
(San Diego Gas & Elec. Co.) Series 1995 B,
3.55%, CP mode 1,000 1,000
San Diego Ind. Dev. Auth. Participating VRDN,
Series 1992 A, 3.25%
(Liquidity Facility Bank of New York, NY) (c) 12,000 12,000
San Francisco City & County Participating VRDN (c):
Series 1996 A, 3.25% (Liquidity Facility Bank of America) 7,175
7,175
Series 1996 AA-2, 3.36% (Liquidity Facility Bank of America) 1,740
1,740
Series 1996 AA-3, 3.36% (FGIC Insured)
(Liquidity Facility Bank of America) 4,210 4,210
Series 1996 AA-4, 3.36% (Liquidity Facility Bank of America) 4,450
4,450
San Francisco City & County International Arpt. Commty.
Series A, 3.70% 9/22/97, LOC Bayerische Landesbank
Gironzentrale, Morgan Guaranty Trust Co., NY, CP (b) 2,000 2,000
San Francisco City & County Redev. Agcy.
Participating VRDN, 3.30%
(Liquidity Facility Commerzbank, Germany) (c) 2,020 2,020
San Jose Multi-Family Hsg. Rev., VRDN:
(Almaden Lake Village Apt. Assoc.) Series 1997 A,
3.20%, LOC Bank of America (b) 4,700 4,700
(Siena at Renaissance Square) Series 1996 A,
3.20%, LOC Bank One, Arizona (b) 11,000 11,000
(Somerset Park Apts.) Series 1987 A, 3.25%,
LOC Bank of America (b) 3,900, 3,900
San Luis Obispo TRAN 4.50% 7/8/98 2,500 2,513
San Luis Obispo County Office of Ed. TRAN
Series 1996, 4.50% 10/9/97 10,700 10,708
Santa Barbara County TRAN Series A, 4.75% 10/1/97 1,750 1,752
Santa Barbara Schools Fing. Auth. TRAN
Series 1997, 4.25% 6/30/98 9,000 9,028
Santa Cruz Ind. Dev. Rev.
(Wilson Entities Ltd. Proj.) Series 1993, 3.40%,
LOC Bank of Tokyo-Mitsubishi Ltd., VRDN (b) 1,500 1,500
Santa Rosa Multi-Family Hsg. (Quail Run Apts./
Santa Rosa Hsg. Partners) Series 1997 A, 3.55%,
LOC U.S. Bank of Washington, VRDN (b) 2,500 2,500
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
CALIFORNIA - CONTINUED
Simi Valley Multi-Family Hsg. Rev., VRDN:
(Lincoln Wood Ranch Apt.) 3.35%,
LOC Sumitomo Bank Ltd. $ 3,800 $ 3,800
(Shadowridge Apts.) Series 1989, 3.25%,
LOC Citibank, N.A. (b) 20,200 20,200
Southern California Metropolitan Wtr. Dist.:
CP:
Series A:
3.65% 9/12/97 1,100 1,100
3.55% 10/17/97 1,800 1,800
Series B:
3.35% 9/10/97 (Liquidity Facility West
Deutsche Landesbank Gironzentrale) 7,000 7,000
3.80% 9/12/97 (Liquidity Facility West
Deutsche Landesbank Gironzentrale) 1,000 1,000
3.50% 10/8/97 (Liquidity Facility West
Deutsche Landesbank Gironzentrale) 5,000 5,000
3.50% 10/15/97 (Liquidity Facility West
Deutsche Landesbank Gironzentrale) 5,600 5,600
3.55% 10/17/97 (Liquidity Facility West
Deutsche Landesbank Gironzentrale) 2,000 2,000
Participating VRDN (c):
3.20% (Liquidity Facility Morgan Guaranty Trust Co., NY) 2,350
2,350
3.20% (Liquidity Facility Morgan Guaranty Trust Co., NY) 4,945
4,945
Southern California Pub. Pwr. Auth. Participating VRDN (c):
Series A, 3.35% (Liquidity Facility Bankers Trust Co., NY) 5,790
5,790
Series 1995, 3.45%
(Liquidity Facility Societe Generale, France) 1,000 1,000
Torrance Hosp. Rev. (Little Co. of Mary Hosp./
Torrance Mem. Med. Ctr.) Series 1992, 3.20%,
LOC Chase Manhattan Bank, VRDN 6,800 6,800
University of California Series A, 3.75% 9/18/97, CP 12,500 12,500
Vallejo Multi-Family Hsg. Rev.
(Hillside Terrace Apts./Vallejo Hillside Assoc.)
Series 1997 A, 3.15% (FNMA Guaranteed) VRDN (b) 1,725 1,725
Vista City Ind. Dev. Auth. Rev. (Desalination Sys., Inc.)
Series 1995, 3.25%, LOC Wells Fargo Bank, N.A., VRDN (b) 6,170 6,170
1,345,744
PUERTO RICO - 1.0%
Puerto Rico Pwr. Auth. Pwr. Rev. Bonds
Series AA, 3.65%, tender 10/8/97
(Liquidity Facility Societe Generale, France) (d) 13,800 13,800
TOTAL INVESTMENTS - 100% $ 1,359,544
Total Cost for Income Tax Purposes $ 1,359,545
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
4. Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
Additional information on each holding is as follows:
ACQUISITION
ACQUISITION COST
SECURITY DATE (000S)
Puerto Rico Pwr. Auth.
Pwr. Rev. Bonds Series
AA, 3.65%, tender
10/8/97 (Liquidity
Facility Societe
Generale, France) 5/20/97 $ 13,800
INCOME TAX INFORMATION
At February 28, 1997, the fund had a capital loss carryforward of
approximately $591,000 which will expire on February 28, 2003.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) AUGUST 31, 1997 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 1,359,544
SEE ACCOMPANYING SCHEDULE
CASH 64
INTEREST RECEIVABLE 7,678
TOTAL ASSETS 1,367,286
LIABILITIES
SHARE TRANSACTIONS IN PROCESS $ 511
DISTRIBUTIONS PAYABLE 108
ACCRUED MANAGEMENT FEE 578
OTHER PAYABLES AND ACCRUED EXPENSES 14
TOTAL LIABILITIES 1,211
NET ASSETS $ 1,366,075
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,366,703
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (628)
NET ASSETS, FOR 1,366,703 SHARES OUTSTANDING $ 1,366,075
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($1,366,075 (DIVIDED BY) 1,366,703 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED AUGUST 31, 1997 (UNAUDITED)
INTEREST INCOME $ 24,801
EXPENSES
MANAGEMENT FEE $ 3,373
NON-INTERESTED TRUSTEES' COMPENSATION 5
TOTAL EXPENSES BEFORE REDUCTIONS 3,378
EXPENSE REDUCTIONS (696) 2,682
NET INTEREST INCOME 22,119
NET REALIZED GAIN (LOSS) ON INVESTMENTS (40)
NET INCREASE IN NET ASSETS RESULTING $ 22,079
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1997 FEBRUARY 28,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 22,119 $ 42,151
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (40) 9
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 22,079 42,160
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (22,119) (42,151)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 742,405 1,487,179
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 21,693 41,201
COST OF SHARES REDEEMED (741,841) (1,491,837)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 22,257 36,543
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 22,217 36,552
NET ASSETS
BEGINNING OF PERIOD 1,343,858 1,307,306
END OF PERIOD $ 1,366,075 $ 1,343,858
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEARS ENDED FEBRUARY 28, TEN MONTHS ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1997 1996 1995 1994 1993
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS .017 .031 .035 .030 .024 .022
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.017) (.031) (.035) (.030) (.024) (.022)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 1.66% 3.18% 3.60% 3.00% 2.45% 2.24%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 1,366 $ 1,344 $ 1,307 $ 1,163 $ 1,065 $ 856
RATIO OF EXPENSES TO AVERAGE NET ASSETS .40% A, D .35% D .31% D .28% D .21% D .30% A,
D
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .40% A .34% E .31% .28% .21% .30% A
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.28% A 3.14% 3.55% 2.96% 2.42% 2.67% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 4 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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 4 OF NOTES
TO FINANCIAL STATEMENTS).
E 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 August 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan California Municipal Money Market Fund (the fund) is a fund of
Fidelity California Municipal Trust II (the trust) and is authorized
to issue an unlimited number of shares. The trust is registered under
the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Delaware
business trust. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned. Accretion of market discount represents unrealized gain until
realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
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.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, restricted securities (excluding 144A
issues) amounted to $13,800,000 or 1.0% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management
& Research Company (FMR) pays all expenses, except the compensation of
the non-interested Trustees and certain
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
exceptions such as interest, taxes, brokerage commissions and
extraordinary expenses. FMR receives a fee that is computed daily at
an annual rate of .50% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund.
To offset the cost of providing these services, FMR or its affiliates
collect certain transaction fees from the fund's shareholders which
amounted to $9,000 for the period.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc.,
a wholly owned subsidiary of FMR, receives a fee from FMR of 50% of
the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
4. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the fund's operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets. During
the period, this expense limitation ranged from .35% to .50% of
average net assets and the reimbursement reduced expenses by $672,000.
In addition, FMR has entered into arrangements on behalf of the fund
with the fund's custodian and transfer agent whereby credits realized
as a result of uninvested cash balances were used to reduce a portion
of the fund's expenses. During the period, the fund's expenses were
reduced by $24,000 under these arrangements.
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on March 19,
1997. The results of votes taken among shareholders on proposals are
listed below.
PROPOSAL 1
To elect as Trustees the following 12 nominees.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 1,063,381,296.263 95.811
Withheld 46,498,081.130 4.189
TOTAL 1,109,879,377.393 100.000
RALPH F. COX
Affirmative 1,064,388,677.803 95.901
Withheld 45,490,699.590 4.099
TOTAL 1,109,879,377.393 100.000
PHYLLIS BURKE DAVIS
Affirmative 1,064,138,696.363 95.879
Withheld 45,740,681.030 4.121
TOTAL 1,109,879,377.393 100.000
ROBERT M. GATES
Affirmative 1,062,692,744.383 95.748
Withheld 47,186,633.010 4.252
TOTAL 1,109,879,377.393 100.000
EDWARD C. JOHNSON 3RD
Affirmative 1,063,987,081.843 95.865
Withheld 45,892,295.550 4.135
TOTAL 1,109,879,377.393 100.000
E. BRADLEY JONES
Affirmative 1,063,352,533.933 95.808
Withheld 46,526,843.460 4.192
TOTAL 1,109,879,377.393 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 1,064,780,516.393 95.937
Withheld 45,098,861.000 4.063
TOTAL 1,109,879,377.393 100.000
PETER S. LYNCH
Affirmative 1,064,907,095.083 95.948
Withheld 44,972,282.310 4.052
TOTAL 1,109,879,377.393 100.000
WILLIAM O. MCCOY
Affirmative 1,064,870,416.383 95.945
Withheld 45,008,961.010 4.055
TOTAL 1,109,879,377.393 100.000
GERALD C. MCDONOUGH
Affirmative 1,063,599,667.373 95.830
Withheld 46,279,710.020 4.170
TOTAL 1,109,879,377.393 100.000
MARVIN L. MANN
Affirmative 1,064,040,707.343 95.870
Withheld 45,838,670.050 4.130
TOTAL 1,109,879,377.393 100.000
THOMAS R. WILLIAMS
Affirmative 1,063,908,817.763 95.858
Withheld 45,970,559.630 4.142
TOTAL 1,109,879,377.393 100.000
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 1,054,963,513.043 95.052
AGAINST 18,234,491.380 1.643
ABSTAIN 36,681,372.970 3.305
TOTAL 1,109,879,377.393 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide dollar-based voting
rights for shareholders of the trust.
# OF TRUST % OF TRUST
SHARES VOTED SHARES VOTED
AFFIRMATIVE 1,007,339,238.553 90.761
AGAINST 50,592,167.240 4.559
ABSTAIN 51,944,533.600 4.680
TOTAL 1,109,875,939.393 100.000
NOT VOTING 3,438.000
# OF FUND % OF FUND
SHARES VOTED SHARES VOTED
AFFIRMATIVE 661,825,976.030 91.608
AGAINST 29,740,662.970 4.117
ABSTAIN 30,884,455.960 4.275
TOTAL 722,451,094.960 100.000
PROPOSAL 4
To amend the fundamental investment limitation concerning the issuance
of senior securities for the fund.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 560,577,599.105 77.594
AGAINST 92,453,114.185 12.797
ABSTAIN 69,420,381.670 9.609
TOTAL 722,451,094.960 100.000
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.
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MINNESOTA
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NORTH CAROLINA
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595 North Barker Road
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INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce Greer, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, 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
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
and
UMB Bank, n.a.
Kansas City, MO
* INDEPENDENT TRUSTEES
FIDELITY'S TAX-FREE
MONEY MARKET FUNDS
California Municipal Money Market
Connecticut Municipal Money Market
Massachusetts Municipal Money Market
Michigan Municipal Money Market
Municipal Money Market
New Jersey Municipal Money Market
New York Municipal Money Market
Ohio Municipal Money Market
Spartan Arizona Municipal Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
CALIFORNIA
MUNICIPAL MONEY MARKET
FUND
SEMIANNUAL REPORT
AUGUST 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 6 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 8 A SUMMARY OF THE MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 9 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 21 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 25 NOTES TO THE FINANCIAL STATEMENTS.
PROXY VOTING RESULTS 27
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.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The short-term volatility that hit the stock and bond markets in the
spring re-emerged in August, and many equity and fixed-income
securities retreated from their 1997 highs. Still, the Standard &
Poor's 500 Index was up roughly 23% year-to-date through August 31,
more than twice its historical annual average. The bond markets have
posted moderate returns through the first eight months of the year,
primarily influenced by positive news on the inflation front.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
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 CALIFORNIA MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the past 10 year total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET 1.55% 3.01% 14.06% 42.92%
CALIFORNIA TAX-FREE 1.51% 2.98% 14.16% 43.54%
MONEY MARKET FUNDS AVERAGE
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. 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. To measure how the fund's performance stacked up
against its peers, you can compare it to the California tax-free money
market funds average, which reflects the performance of California
tax-free money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past six months average represents a peer
group of 46 mutual funds. (The periods covered by the IBC Financial
Data, Inc. numbers are the closest available match to those covered by
the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET 3.01% 2.67% 3.64%
CALIFORNIA TAX-FREE 2.98% 2.68% 3.68%
MONEY MARKET FUNDS AVERAGE
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
9/1/97 6/2/97 3/3/97 12/2/96 9/2/96
CALIFORNIA MUNICIPAL 2.77% 3.23% 2.77% 2.93% 2.92%
MONEY MARKET
CALIFORNIA TAX-FREE 2.81% 3.14% 2.74% 2.95% 2.84%
MONEY MARKET FUNDS AVERAGE
CALIFORNIA TAX-FREE 4.77% 5.56% 4.77% 5.05% 5.03%
MONEY MARKET TAX-EQUIVALENT
Row: 1, Col: 1, Value: 2.78
Row: 1, Col: 2, Value: 2.81
Row: 2, Col: 1, Value: 3.23
Row: 2, Col: 2, Value: 3.14
Row: 3, Col: 1, Value: 2.77
Row: 3, Col: 2, Value: 2.74
Row: 4, Col: 1, Value: 2.93
Row: 4, Col: 2, Value: 2.95
Row: 5, Col: 1, Value: 2.92
Row: 5, Col: 2, Value: 2.84
4% -
3% -
2% -
1% -
0%
California Municipal
Money Market
California
Tax-Free Money
Market Funds Average
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the
California tax-free money market funds average as tracked by IBC
Financial Data, Inc. Or you can look at the fund's tax-equivalent
yield, which is based on a combined effective 1997 federal and state
income tax rate of 41.95%. A portion of the fund's income may be
subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
YIELDS ON TAX-FREE INVESTMENTS
ARE USUALLY LOWER THAN YIELDS
ON TAXABLE INVESTMENTS.
HOWEVER, A STRAIGHT
COMPARISON BETWEEN THE TWO
MAY BE MISLEADING BECAUSE IT
IGNORES THE WAY TAXES
REDUCE TAXABLE RETURNS.
TAX-EQUIVALENT YIELD - THE YIELD
YOU'D HAVE TO EARN ON A
SIMILAR TAXABLE INVESTMENT TO
MATCH THE TAX-FREE YIELD -
MAKES THE COMPARISON MORE
MEANINGFUL. KEEP IN MIND THAT
THE U.S. GOVERNMENT NEITHER
INSURES NOR GUARANTEES A
MONEY MARKET FUND. AND THERE
IS NO ASSURANCE THAT A MONEY
MARKET FUND WILL MAINTAIN A $1
SHARE PRICE.
(CHECKMARK)
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Tanya Roy became Portfolio Manager of Fidelity
California Municipal Money Market Fund on June 1, 1997.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS,
TANYA?
A. While the Federal Reserve Board in mid-1996 indicated its bias
toward raising short-term interest rates to slow economic growth and
head off inflation, it had not acted by early 1997 and the market
became complacent with the steady Fed policy. That sentiment changed
in late February, however, after Fed Chairman Alan Greenspan's
semiannual Humphrey-Hawkins testimony before Congress. In his
testimony, Greenspan explained his concerns that low unemployment
might exert upward pressure on the economy's core inflation. More
importantly, he mentioned the possibility that the Fed might raise the
rate banks charge each other for overnight loans - known as the fed
funds target rate - from the 5.25% level it had maintained since
January 1996. The reason behind raising rates would be to curb
inflation before it passed through to the consumer. Shortly after
Greenspan's remarks, data for February showed an additional 293,000
non-farm jobs had been added to the economy, lowering unemployment to
5.3%. Interest rates rose as the Fed's March 25 Open Market Committee
meeting approached and fears intensified that there would be a shift
in Fed policy. At that meeting, the Fed raised the fed funds target
rate by 0.25% to 5.50% as expected.
Q. HOW HAS THE ECONOMY PERFORMED SINCE THE FED'S MARCH MEETING?
A. First quarter 1997 data pointed to continued economic strength,
with gross domestic product growing at a stronger-than-expected annual
rate of nearly 5%. In addition, unemployment fell in April to 4.9%,
the lowest level since 1973. Since then, data has shown signs that the
economy weakened somewhat through the second quarter. Perhaps more
importantly, inflation continued to remain in check. In fact, in the
first half of the year there were six consecutive monthly drops in the
producer price index, and the first half of the year's consumer price
index was the lowest in 10 years. Because of this backdrop, the Fed
chose not to change the fed funds target rate at its latest meeting in
early July.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. The fund's average maturity was 38 days entering the period. Given
the strong first-quarter economic data released throughout the spring,
the fund's average maturity initially declined in anticipation of
higher interest rates. Attractive opportunities appeared in
instruments with one-day or one-week effective maturities. For several
weeks, the average yield on these securities was equal to or in some
cases even higher than the yield on one-year notes. This situation
enabled the fund to buy attractive-yielding instruments without taking
on the added risk of buying one-year notes. Moving into the summer, we
entered the season when most California issuers - including school
districts, cities and towns - come to market with a large supply of
one-year notes. They sell these securities to finance their cash-flow
needs for the upcoming fiscal year that typically runs from July 1 to
June 30. Over $4 billion in notes were sold in June and July alone. As
a result, yields reverted to a more historically normal relationship -
with longer-term securities offering higher yields than short-term
notes. The fund participated selectively in the one-year note market,
purchasing those securities that I found to be attractively priced. As
a result, the fund's average maturity lengthened to 45 days at the end
of the period, close to the average of other California funds.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1997, was 2.78%, compared
to 2.76% six months ago. The latest yield was the equivalent of a
taxable yield of 4.79% for California investors in the 41.95% combined
federal and state tax bracket. The fund's total return during the
six-month period was 1.55%. That beat the total return of 1.51% for
the California tax-free money market funds average, according to IBC
Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. Should the economy continue to exhibit healthy growth in the third
and fourth quarters of 1997, renewed inflation pressures could result,
leading to higher interest rates. Given this risk, I expect to manage
the fund to be able to take advantage of higher rates over the next
six to 12 months. I also expect to find opportunities in the market by
taking advantage of aberrations caused by technical factors, such as
supply and demand imbalances, seasonal factors and corporate buying
trends, among others. These factors can play out in a day, a week or
over several months, and are an important part of my ongoing strategy.
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.
FUND FACTS
GOAL: HIGH CURRENT TAX-FREE
INCOME FOR CALIFORNIA RESIDENTS
WHILE MAINTAINING A STABLE
$1.00 SHARE PRICE
FUND NUMBER: 097
TRADING SYMBOL: FCFXX
START DATE: JULY 7, 1984
SIZE: AS OF AUGUST 31, 1997,
MORE THAN $857 MILLION
MANAGER: TANYA ROY, SINCE
JUNE 1997; MANAGER, VARIOUS
FIDELITY AND SPARTAN MUNICIPAL
MONEY MARKET FUNDS; JOINED
FIDELITY IN 1989
(CHECKMARK)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
8/31/97 2/28/97 8/31/96
0 - 30 75 73 71
31 - 90 15 4 11
91 - 180 0 21 3
181 - 397 10 2 15
WEIGHTED AVERAGE MATURITY
8/31/97 2/28/97 8/31/96
FIDELITY CALIFORNIA MUNICIPAL 45 DAYS 38 DAYS 63 DAYS
MONEY MARKET FUND
CALIFORNIA TAX-FREE 47 DAYS 40 DAYS 52 DAYS
MONEY MARKET FUNDS AVERAGE*
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF AUGUST 31, 1997 AS OF FEBRUARY 28, 1997
Row: 1, Col: 1, Value: 11.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 22.0
Row: 1, Col: 4, Value: 64.0
Variable rate demand
notes (VRDNs) 66%
Commercial paper
(including commercial
paper mode) 12%
Tender bonds 1%
Municipal
notes 21%
Variable rate demand
notes (VRDNs) 65%
Commercial paper
(including commercial
paper mode) 22%
Tender bonds 2%
Municipal
notes 11%
Row: 1, Col: 1, Value: 65.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 21.0
*SOURCE: IBC'S MONEY FUND SOURCE(registered trademark)
INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 99.3%
Alameda County Ind. Dev. Auth. Ind. Rev.:
(Edward L. Shimmon, Inc. Proj.) Series 1996 A,
3.35% LOC Banque Nationale De Paris, VRDN (b) $ 2,100,000 $ 2,100,000
Rfdg. (Longview Fibre Co.) Series 1988, 3.45% LOC
ABN-AMRO Bank, VRDN 1,750,000 1,750,000
Anaheim Hsg. Auth. Multi-Family Hsg. Rev. (Parka Vista Apts.)
3.25% LOC Citibank, VRDN (b) 6,200,000 6,200,000
Azusa Multi-Family Hsg. (Pacific Glen Apt. Proj.) Series 1994,
3.50% (Continental Casualty Guaranteed) VRDN 4,200,000 4,200,000
Barstow Multi-Family Hsg. Rev. (Rimrock Village Apt. Proj.)
Series 1996, 3.20% LOC Federal Home Loan Bank,
VRDN (b) 1,650,000 1,650,000
Berkeley Unified School Dist. (Almeda Co.) TRAN
4.25% 6/30/98 3,500,000 3,510,481
California Econ. Dev. Fin. Auth. Ind. Dev. Rev.
(Kuhnash Properties III, LLC/Arkay Plastics, CA, LLC Proj.)
Series 1997, 3.50% LOC PNC Bank, Ohio, VRDN (b) 1,000,000 1,000,000
California Econ. Dev. Fing. Auth. (Joseph Schmidt Proj.)
Series A, 3.35% LOC Banque Nationale De Paris, VRDN (b) 1,500,000
1,500,000
California Gen. Oblig.:
Bonds 5% 10/1/97 2,700,000 2,702,922
CP:
3.65% 9/15/97 6,200,000 6,200,000
3.60% 9/16/97 7,400,000 7,400,000
3.65% 9/16/97 3,200,000 3,200,000
3.65% 9/17/97 11,000,000 11,000,000
3.55% 10/15/97 5,200,000 5,200,000
3.60% 10/16/97 12,300,000 12,300,000
3.60% 10/16/97 1,500,000 1,500,000
3.50% 10/15/97 12,200,000 12,200,000
3.55% 10/20/97 5,100,000 5,100,000
3.65% 10/21/97 3,700,000 3,700,000
Participating VRDN (c):
Series SG-84, 3.50% (Liquidity Facility
Societe Generale, France) 1,800,000 1,800,000
Series SG-86, 3.50%
(Liquidity Facility Societe Generale, France) 2,000,000 2,000,000
Series SGB-7, 3.30%
(Liquidity Facility Societe Generale, France) 2,700,000
2,700,000
Series 1996 L, 3.40% (FGIC Insured)
(Liquidity Facility Caisse des Depots et Consignations) 7,730,000
7,730,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Hsg. Fin. Agcy.
Participating VRDN (c):
Series C-1, 3.41%
(Liquidity Facility Bank of America) (b) $ 3,225,000 $ 3,225,000
Series PA-90, 3.40% (Liquidity Facility Merrill
Lynch & Co., Inc.) (b) 1,935,000 1,935,000
Series PA-112, 3.40% (Liquidity Facility
Merrill Lynch & Co. Inc) (b) 2,440,000 2,440,000
Series PT-14, 3.25% (Liquidity Facility
Commerzbank, Germany) 4,125,000 4,125,000
Series PT-40A, 3.40% (Liquidity Facility
Commerzbank, Germany) (b) 6,700,000 6,700,000
Series PT-40B, 3.40% (Liquidity Facility Bayerische
Hypotheken-und Weschel) (b) 8,960,000 8,960,000
Series PT-40C, 3.25% (Liquidity Facility Banque
Nationale de Paris) 6,135,000 6,135,000
Series PT-40D, 3.40% (Liquidity Facility Banque
Nationale de Paris) (b) 60,000 60,000
Series PT-56, 3.40% (Liquidity Facility Credit
Suisse First Boston) (b) 1,030,000 1,030,000
Series 1994-1, 3.46% (Liquidity Facility State Street
Bank & Trust Co.) (b) 7,487,938 7,487,939
Series 1994 H, 3.46%
(AMBAC Insured) (Liquidity Facility Citibank) (b) 4,000,000
4,000,000
California Hsg. Fin. Agcy. Home Mtg. Rev. Bonds
Series 1996-J, 3.95% tender 8/1/98 (FGIC Insured) (b) 6,500,000
6,500,000
California Hsg. Fin. Agcy. Single Family Mtg. Bonds
Series 1997 B, 3.70% tender 4/1/98
(Morgan Stanley Flex Agreements Guaranteed) (b) 5,500,000 5,500,000
California Hsg. Fin. Agcy. Multi-Family Hsg. III:
Series B, 3.20% LOC Morgan Guaranty Trust Co., NY,
Credit Suisse First Boston, VRDN (b) 4,120,000 4,120,000
Series C, 3.20% LOC Morgan Guaranty Trust Co., NY,
Credit Suisse First Boston, VRDN (b) 3,800,000 3,800,000
California Poll. Cont. Fin. Auth.:
Bonds (Chevron USA, Inc. Proj.) Series 1983,
3.90% tender 11/15/97 1,000,000 1,000,399
(Gilton Solid Waste Mgmt. Inc. Proj.) Series 1995 A,
3.15% LOC Bank of America, VRDN (b) 2,700,000 2,700,000
(Pacific Gas & Elec. Co.):
Series 1996 A, 3.05% LOC Swiss Bank Corp., VRDN (b) 39,000,000
39,000,000
Series 1996 B, 3.10% LOC Rabobank Nederland,
VRDN (b) 1,500,000 1,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Poll. Cont. Fin. Auth.: - continued
(Pacific Gas & Elec. Co.):
Bonds:
Series 1996 D, 3.65% 9/15/97 LOC Union Bank
of Switzerland, CP mode $ 3,900,000 $ 3,900,000
Series 1996 E, 3% 9/5/97 LOC Morgan Guaranty
Trust Co., NY, CP mode 3,600,000 3,600,000
Series 1996 E, 3.60% 10/8/97 LOC Morgan Guaranty
Trust Co., NY, CP mode 13,000,000 13,000,000
Series 1996 E, 3.60% 10/9/97 LOC Morgan Guaranty
Trust Co., NY, CP mode 4,000,000 4,000,000
(Taormina Ind. Inc. Proj.) Series 1996 A, 3.15% LOC
Sanwa Bank Ltd., VRDN (b) 1,650,000 1,650,000
(Western Wst. Industries) Series 1994 A, 3.15% LOC
Union Bank of California, VRDN (b) 2,100,000 2,100,000
California Poll. Cont. Fin. Auth. Solid Waste Disp. Rev. VRDN:
(Athens Disp. Co. Proj.) Series 1995, 3.10% LOC
Wells Fargo Bank of San Francisco (b) 2,000,000 2,000,000
(EDCO Disposal) Series 1996 A, 3.10% LOC
Wells Fargo Bank, NA (b) 3,500,000 3,500,000
(Sanifill Inc. Proj.) Series1995 A, 3.15% LOC California
Teachers Retirement Sys. (b) 3,000,000 3,000,000
(Shell Oil Co. Martinez Proj.) Series 1994 A,
3.45% (b) 500,000 500,000
California School Cash Reserves Prog. Auth. Series A-1997,
TRAN 4.75% 7/2/98 (AMBAC Insured) 20,000,000 20,144,254
California Statewide Commty. Dev. Auth. VRDN:
(Biocol Investments) 3.40% LOC Union Bank of
California (b) 600,000 600,000
(Covenant Retirement Commty. Inc.):
Series 1995, 3.25% LOC LaSalle Nat'l Bank, 4,000,000 4,000,000
3.25% LOC La Salle Nat'l Bank 10,300,000 10,300,000
(Eurodesign Cabinets Inc. Proj.) 3.25% LOC
California Teachers Retirement Sys. (b) 900,000 900,000
(Fibrebond West Inc. Proj.) Series 1996 N, 3.25% LOC
California Teachers Retirement Sys. (b) 6,000,000 6,000,000
(Fulton Properties Ltd., Inc.) Series 1996 F, 3.40% LOC
Wells Fargo Bank (b) 3,625,000 3,625,000
(Grundfos Pumps Corp. Proj.) Series 1989, 3.25% LOC
California Teachers Retirement Sys. (b) 6,000,000 6,000,000
(Instrument Specialties Co.) Series 1989, 3.25% LOC
California Teachers Retirement Sys., (b) 745,000 745,000
(JDI Partners Proj.) 3.25% LOC California Teacher
Retirement Sys. (b) 1,800,000 1,800,000
(Leegin Creative Leather Prod.) Series 1995 A, 3.25% LOC
California Teachers Retirement Sys. (b) 1,630,000 1,630,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Auth. VRDN: - continued
(Lorber Ind. of California Proj.)
Series 1992, 3.40% LOC Union Bank (b) $ 600,000 $ 600,000
Marcel & Margrit Shurman Proj.) 3.25%
LOC California Teachers Retirement Sys. (b) 1,725,000 1,725,000
(Marko Prod. Inc. Proj.) Series 1992, 3.40% LOC
Union Bank (b) 430,000 430,000
(Redline Synthetic Oil Corp.) 3.25% LOC
California Teachers Retirement Sys. (b) 1,095,000 1,095,000
(Sys. Engineering & Mgmt. Co.) 3.25% LOC
California Teachers Retirement Sys. (b) 1,690,000 1,690,000
(Zarn Inc. Proj.) Series 1989, 3.25%
LOC California Teachers Retirement Sys. (b) 815,000 815,000
Rev.:
(Andercraft Prod. Inc.) Series 1989, 3.25% LOC
California Teachers Retirement Sys. (b) 605,000 605,000
(Lansmont Corp. Proj.) Series 1996 G, 3.40% LOC
Wells Fargo Bank (b) 1,000,000 1,000,000
(Watt Four, LLC) 3.75% LOC Sanwa Bank Ltd.,
Japan (b) 500,000 500,000
(Wilson Entities Ltd. Proj.) Series 1993, 3.40%
LOC Bank of Tokyo-Mitsubishi, Ltd. (b) 1,300,000 1,300,000
(Zieman Manufacturing Co. Proj.) Series 1990, 3.25%
LOC California Teachers Retirement Sys. (b) 455,000 455,000
Rev. Rfdg.:
(Irvine Apt. L.P.) Series 1995 A-7, 3.05%
(FNMA Guaranteed) (b) 5,000,000 5,000,000
Series 1995-A-6, 2.95% (FNMA Guaranteed) 3,200,000 3,200,000
California Statewide Commty. Dev. Auth. Enterprise Zone
Facs. Rev. (JTF Enterprises, LLC Proj.)
Series 1996 A, 3.35% LOC Bank of America, VRDN 3,000,000 3,000,000
California Statewide Commty. Dev. Auth. Ind. Dev. Rev. VRDN:
(Carvin Corp.) 3.25% LOC California Teachers
Retirement Sys. (b) 2,420,000 2,420,000
(Cordeiro Vault Co., Inc. Proj.) Series 1996 M,
3.25% LOC California Teachers Retirement Sys. (b) 1,130,000
1,130,000
(Levecke, LLC Proj.) Series 1996, 3.40% LOC Union Bank
of California (b) 1,500,000 1,500,000
(Lynwood Enterprises, LLC Proj.) Series 1997 D, 3.45% LOC
Fleet National Bank (b) 1,400,000 1,400,000
(Pasco Scientific Proj.) 3.25% LOC
California Teachers Retirement Sys. (b) 2,825,000 2,825,000
(Peets Coffee & Tea Inc.) Series 1995 E, 3.25% LOC
California Teacher Retirement Sys. (b) 1,900,000 1,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Auth. Ind. Dev. Rev. VRDN: -
continued
(Setton Prop. Inc. Proj.) Series 1995 E, 3.40% LOC
Wells Fargo Bank of San Francisco (b) $ 2,890,000 $ 2,890,000
(Veriflo Corp. Proj.) Series 1996C, 3.30% LOC
ABN-AMRO Bank (b) 1,800,000 1,800,000
(W&H Voortman Inc. Proj.) Series 1990, 3.25% LOC
California Teachers Retirement Sys. (b) 1,080,000 1,080,000
California Statewide Commty. Dev. Auth.
Multi-Family Hsg. Dev. Auth. VRDN:
(Canyon Creek Apts.) Series 1995 C, 3.15%
(FNMA Guaranteed) (b) 700,000 700,000
(Evapco, Inc.) Series 1996 K, 3.40%
LOC Nationsbank (b) 1,500,000 1,500,000
(Oakmont Stokton) Series 1997 C, 3.15%
LOC Commerzbank, Germany (b) 5,960,000 5,960,000
(Sunrise of Moraga) Series 97G, 3.25%
LOC Commerzbank, Germany (b) 1,200,000 1,200,000
Camarillo Multi-Family Hsg. Auth. Rev.
(Hacienda de Camarillo Proj.) Series 1996,
3.15% (FNMA Guaranteed) VRDN (b) 5,900,000 5,900,000
Carlsbad Multi-Family Hsg.
(Seascape Village Proj.) Series A, 3.35%
(Continental Casualty Co. Guaranteed) VRDN 10,600,000 10,600,000
Central Valley School Fin. Auth. TRAN 4.50% 8/27/98 3,900,000
3,922,195
Chula Vista Ind. Dev. Rev.
(San Diego Gas & Elec. Co.):
Series B, 3.15% VRDN (b) 2,000,000 2,000,000
Bonds:
Series C, 3.65% 9/19/97 CP mode (b) 5,000,000 5,000,000
Series D, 3.65% 10/7/97 CP mode (b) 3,500,000 3,500,000
Series E, 3.70% 10/7/97 CP mode (b) 2,500,000 2,500,000
Clovis Unified School Dist. Bonds TRAN (Fresno County)
4.25% 6/30/98 1,900,000 1,906,810
Contra Costa County Multi-Family Hsg. Rev.
(Del Norte Place Apt.) Series 1994 A, 3.40% LOC
Sumitomo Bank Ltd., VRDN (b) 1,700,000 1,700,000
Contra Costa County Wtr. Dist.
Participating VRDN, Series 1996SGA-24,3.35%
(Liquidity Facility Societe Generale, France) (c) 9,100,000
9,100,000
Covina Redev. Agcy. Multi-Family Hsg. Rev.
(Shadowhills Apt. Proj.) Series 1994 A, 3.50%
(Continental Casualty Co. Guaranteed) VRDN 500,000 500,000
East Bay Muni Util. Dist. Wtr. Sys. Rev. CP Series 1988,
3.65% 9/11/97 (Liquidity Facility
Westdeutsche Landesbank, Gironzent) 4,000,000 4,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Emeryville Redev. Agcy. Multi-Family Hsg. (Emerybay Apts. II)
3.20% LOC Bank of America, VRDN (b) $ 3,000,000 $ 3,000,000
Escondido Commty. Dev. Commission Rev.
(Escondido Promenade Proj.) 3.15% LOC Bank of
America, VRDN (b) 4,000,000 4,000,000
Fairfield Ind. Dev. Auth. (Meyer Cookward Ind. Proj.)
3.35% LOC Banque Nationale de Paris, VRDN (b) 2,600,000 2,600,000
Fillmore Ctfs. of Prtn. (Water Improvement Proj.) Series 1997,
3.40% LOC Union Bank of California, VRDN 1,000,000 1,000,000
Fowler Ind. Dev. Auth. Ind. Dev. Rev. (Bee Sweet Citrus Inc. Proj.)
3.40% LOC Bank of America, VRDN (b) 2,000,000 2,000,000
Fremont Gen. Oblig. TRAN (Almeda Co.) 4.25% 7/1/98 2,700,000
2,708,132
Fremont Multi-Family Hsg. Rev. (Treetops Apts.)
Series 1996 A, 3.15% (FNMA Guaranteed) VRDN (b) 3,300,000 3,300,000
Fresno County Gen. Oblig. TRAN:
4.75% 9/29/97 3,800,000 3,803,147
4.25% 7/1/98 6,800,000 6,825,529
Garden Grove Multi-Family Hsg. Rev. VRDN:
(Cal-Malabar Apts.) Series 1997 A, 3.15%
(FNMA Guaranteed) 2,750,000 2,750,000
(Valley View Sr. Vilage Proj.) Series 1990 A, 3.25%
LOC Wells Fargo (b) 1,500,000 1,500,000
Huntington Beach Multi-Family Hsg. Rev.
(Five Point Seniors Proj.) Series 1991 A, 2.85% LOC
Wells Fargo Bank, VRDN (b) 6,400,000 6,400,000
Kern County Gen. Oblig. TRAN 4.50% 10/2/97 3,500,000 3,502,434
Lassen Muni. Util. Dist. Rev. Rfdg. Series 1996 A, 3.40%
(FSA Insured) (Liquidity Facility Credit
Local de France) VRDN (b) 3,280,000 3,280,000
Livermore Ctfs. of Prtn. (Reverse Osmosis Proj.) 3.15% LOC
Nat'l. Westminster Bank PLC, VRDN 1,200,000 1,200,000
Livermore Multi-Family Mtg. Rev. (Portola Meadows Apts.)
Series 1989 A, 3.15% LOC Bank of America, VRDN (b) 1,000,000
1,000,000
Long Beach Harbor Participating VRDN, Series SG-73, 3.40%
(Liquidity Facility Societe Generale, France) (c) 3,000,000
3,000,000
Long Beach Harbor Dept. CP:
Series A, 3.60% 10/01/97 (Liquidity Facility
Canadian Imperial Bank of Comm.) (b) 1,500,000 1,500,000
Series A, 3.60% 10/07/97 (Liquidity Facility
Canadian Imperial Bank of Comm.) (b) 2,700,000 2,700,000
Los Angeles County Cap. Asset Leasing Corp. CP:
3.80% 9/12/97 3,200,000 3,200,000
3.60% 10/16/97 4,500,000 4,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Gen. Oblig. TRAN
Series A, 4.50% 6/30/98 $ 8,000,000 $ 8,041,251
Los Angeles County Ind. Dev. Auth. (Caitac & Jae Proj.)
3.40% LOC Union Bank of California, VRDN (b) 1,500,000 1,500,000
Los Angeles County Metropolitan Trans. Auth.:
CP:
Series A, 3.80% 9/4/97 9,400,000 9,400,000
Series A, 3.75% 9/11/97 1,400,000 1,400,000
Participating VRDN (c):
Series SG-2, 3.30% (Liquidity Facility Societe
Generale, France) 19,350,000 19,350,000
Series SG-54, 3.45% (Liquidity Facility
Societe Generale, France) 1,400,000 1,400,000
Series SG-55, 3.45% (MBIA Insured) (Liquidity Facility
Societe Generale, France) 10,200,000 10,200,000
(Union State Gateway Proj.) Series SG-3, 3.30%
(Liquidity Facility Societe Generale, France) 5,200,000 5,200,000
Los Angeles County Multi-Family Hsg. VRDN:
(Malibu Meadows II Proj.):
Series 1991 A, 3.40% LOC Sumitomo Bank Ltd. 8,511,000 8,511,000
Series 1991 B, 3.40% LOC Sumitomo Bank Ltd. 1,800,000 1,800,000
(Meadowridge Apt. Proj.) Series 1994 B, 3.50%
(Continental Casualty Co. Guaranteed) 1,400,000 1,400,000
Los Angeles Commty. Redev. Agcy. Multi-Family Hsg.
(Promenade Towers) 3.20% LOC Tokai Bank, VRDN 11,925,000 11,925,000
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev. CP:
3.65% 9/17/97 LOC Toronto-Dominion Bank,
Bank of Nova Scotia 1,800,000 1,800,000
3.90% 10/10/97 LOC Toronto-Dominion Bank,
Bank of Nova Scotia 17,000,000 17,000,000
3.60% 10/23/97 LOC Toronto-Dominion Bank,
Bank of Nova Scotia 3,800,000 3,800,000
Los Angeles Gen. Oblig. TRAN 4.50% 6/30/98 7,700,000 7,739,337
Los Angeles Ontario Int'l. Arpt.
Participating VRDN, Series 1996SG-61, 3.40%
(Liquidity Facility Societe Generale, France) (b)(c) 1,400,000
1,400,000
Los Angeles Harbor Dept. Rev.
Participating VRDN (c):
Series 1996 B, 3.35% (BPA Bank of New York) (b) 11,185,000
11,185,000
Series 1996 B, 3.40% (Liquidity Facility Societe Generale,
France) (MBIA Insured) (b) 4,725,000 4,725,000
Los Angeles Multi-Family Hsg. Rev. (Beverly Park Apts.)
Series 1988 A, 3.15% LOC Chase Manhattan
Bank, VRDN (b) 5,000,000 5,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Unified School Dist. TRAN:
Series 1996-97 B, 4.50% 9/30/97 $ 3,000,000 $ 3,001,780
Series 1997-98, 4.50% 7/1/98 6,800,000 6,836,104
Los Angeles Waste Wtr. Rev. Bond, Participating VRDN,
Series 1996 SGA-26, 3.35% (Liquidity Facility
Societe Generale, France) (c) 1,000,000 1,000,000
Los Angeles Waste Wtr. Sys. Rev. CP 3.65% 9/11/97 LOC
Morgan Guaranty Trust Co., NY, Union
Bank of Switzerland 1,500,000 1,500,000
M-S-R Pub. Pwr. Agcy. Rev. (San Juan Proj.)
Series 1997E, 3% (MBIA Insured) (BPA National
Westminster Bank, PLC) VRDN 1,000,000 1,000,000
Monterey Ind. Dev. Auth. Rev. (Slautterback Corp. Proj.)
Series 1996 A, 3.20%
LOC Bayerische Vereinsbank, VRDN (b) 1,350,000 1,350,000
Oakland Unified School Dist. TRAN (Alameda County)
Series 1996-97, 4.25% 10/14/97 2,400,000 2,401,429
Oceanside Multi-Family Rev. (Lakeridge Apt. Proj.)
Series 1994, 3.50% (Continental Casualty Co.
Guaranteed) VRDN 6,700,000 6,700,000
Orange County Apt. Dev. Rev. VRDN:
(Alicia Viego Proj.) Series 1986 A, 3.50%
LOC Bank of Tokyo-Mitsubishi, Ltd. (b) 1,970,000 1,970,000
(Control Air Conditioning Corp./Ellis Enterprises)
Series 1997, 3.45% LOC California Teacher's
Retirement Sys. 1,000,000 1,000,000
(Foothill Oaks Apts. Proj.) Series 1989 B,
3.25% LOC Bank of America (b) 700,000 700,000
(Hidden Hills Apts.) Series 1985 U-C,
3.25% LOC ChaseManhattan Bank 7,200,000 7,200,000
(Monarch Bay Apt. Proj.) Series 1985 T,
3.20% LOC Bank of Tokyo-Mitsubishi Bank, Ltd. 8,400,000 8,400,000
(Vista Verde Apt. Proj.) Series 1988 A, 3.35%
LOC Wells Fargo Bank, NA (b) 4,200,000 4,200,000
(Wood Canyon Villas) Issue 1991 B,
3.10% LOC Bank of America (b) 1,000,000 1,000,000
(Yorba Linda Assoc.) Series 1985 D,
3.15% LOC Bank of Tokyo-Mitsubishi, Ltd. 4,000,000 4,000,000
Participating VRDN (c):
Series JT 1996 A, 3.46% LOC Citibank (b) 6,100,000 6,100,000
Series JT 1996 B, 3.36% LOC Citibank 6,700,000 6,700,000
Rfdg. (Harbor Pointe Apts.)
Series 1992 D, 3.15% LOC Citibank, N.A., VRDN 4,400,000 4,400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Orange County Hsg. Auth. Apt. Dev. Rev.
(Lantern Pines Proj.-Frost Group) 3.25%
LOC Bank of Tokyo-Mitsubishi, Ltd., VRDN $ 7,550,000 $ 7,550,000
Orange County Local Trans. Auth. Participating VRDN,
Series 1997, 3.25% (Liquidity Facility Bank of
New York, NA) (c) 1,000,000 1,000,000
Oxnard Redev. Agcy. Ctfs. of Prtn. (Channel Islands Bus.
Ctr. Proj.) 3.725% LOC Wells Fargo Bank of
San Francisco, VRDN 3,195,000 3,195,000
Pittsburg Multi-Family Hsg. Auth. (Fountain Plaza Apt.)
3.30% (Fannie Mae Guaranteed) VRDN 8,300,000 8,300,000
Pleasant Hill Redev. Agcy. Multi-Family Hsg. Rev.
(Chateau III Proj.) Series 1996 A, 3.25%
LOC Commerzbank, Germany, VRDN (b) 800,000 800,000
Redondo Beach Multi-Family Hsg. Rev.
(McCandless Senior Hsg. Proj.) Series 1995 A, 3.20%
LOC Comerica Bank of Detroit, VRDN 3,500,000 3,500,000
Riverside County Gen. Oblig. TRAN 4.50% 6/30/98 3,800,000 3,816,615
Riverside County Hsg. Auth. Multi-Family Hsg. Mtg. Rev.
(Mt. View Apts.) Series 1995 A, 3.15% LOC Federal Home
Loan Bank of San Francisco, VRDN 2,400,000 2,400,000
Riverside County Hsg. Auth. (Polk Apt. Proj.)
Series 1985 O, 3.65% (Household Finance Corp.
Guaranteed) VRDN 2,200,000 2,200,000
Riverside County Hsg. Auth. Multi-Family Hsg. (Tyler Village Proj.)
Series 1986 A, 3.35%
LOC Chase Manhattan Bank, VRDN (b) 3,060,000 3,060,000
Riverside County Hsg. Auth. Multi-Family Hsg. Rev.
(Victoria Springs Apts.) Series 1989 C, 3.35%, LOC
Bank of Amercia, VRDN (b) 2,500,000 2,500,000
Riverside County Ind. Dev. Auth. (Merrick Engineering, Inc.)
3.75% LOC Wells Fargo Bank, NA, VRDN (b) 1,000,000 1,000,000
Sacramento County Arpt. Sys. Rev. Participating VRDN,
(PFC and Subrdnt Tea) Series SGA-33, 3.35%
(Liquidity Facility Societe Generale, France) (c) 3,100,000
3,100,000
Sacramento County Gen. Oblig. TRAN 4.50% 9/30/97 1,000,000 1,000,534
Sacremento Hsg. Auth. Multi-Family Hsg. Rev.
(Chesapeake Commons Holdings, Inc.) Series 1997 A,
3.20% LOC Bank One, Arizona, NA, VRDN (b) 2,000,000 2,000,000
Sacramento Muni. Util. Dist. CP Series I, 3.70% 9/10/97
LOC Bayerische Landesbank, Gironzentrale 1,500,000 1,500,000
Sacramento Muni. Util. Dist. Participating VRDN, 3.30%
(Liquidity Facility Societe Generale, France) (c) 4,000,000
4,000,000
San Bernardino County Hsg. (Alta Park Apts.) 3.60%
LOC Sumitomo Bank, Ltd., VRDN 3,700,000 3,700,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Diego County Reg'l. Trans. Commission Sales Tax Rev.
Participating VRDN, Series BT-185, 3.35%
(Liquidity Facility Bankers Trust Company, NY) (c) $ 3,000,000 $
3,000,000
San Diego Gas & Elec. Participating VRDN, Series 1992 A,
3.25% (Liquidity Facility Bank of New York) (c) 5,000,000 5,000,000
San Diego Hsg. Auth. Multi-Family Hsg. VRDN:
(Carmel Del Mar Apr. Proj.) Series 1993 E, 3.15%
LOC Citibank, 3,000,000 3,000,000
(Paseo Point Apt.) Series 1994 A, 3.15%
LOC Bank of Tokyo-Mitsubishi, Ltd. 4,600,000 4,600,000
Rev. Rfdg. (Coral Pointe Apt. Proj.) Series 1993 A,
3.45% 3,265,000 3,265,000
San Diego Ind. Dev. Rev. Rfdg. Bonds (Gas & Electric Co.)
Series 1995 B, 3.60% 9/25/97 CP mode 2,300,000 2,300,000
San Diego Ind. Dev. Participating VRDN, Series 1997, 3.25%
(Liquidity Facility Bank of New York, NY) (c) 2,000,000 2,000,000
San Francisco City & County Participating VRDN (c):
Series 1996 AA1, 3.36% (Liquidity Facility Bank
of America) 3,775,000 3,775,000
Series 1996 AA2, 3.36% (Liquidity Facility Bank
of America) 2,240,000 2,240,000
San Francisco City & County Int'l. Arpt. Commty. CP
Series A, 3.70% 9/22/97 LOC Bayerische Landesbank
Gironzentrale, Morgan Guaranty Trust Co., NY (b) 1,000,000 1,000,000
San Francisco City & County Parking Meter Rev. Participating
VRDN, Series 1996 A, 3.25% (Liquidity Facility Bank of
America) (c) 2,900,000 2,900,000
San Francisco City & County Redev. Agcy. Mtg.
Rev. Participating VRDN, 3.30%
(Liquidity Facility Commerzbank, AG) (c) 1,200,000 1,200,000
San Jose Multi-Family Hsg. Rev. VRDN:
(Almaden Lake Village Apt. Assoc.) Series 1997 A,
3.20% LOC Bank of America (b) 2,800,000 2,800,000
(Siena At Renaissance) Series 1996 B, 3.20%
LOC Key Bank, NA (b) 5,000,000 5,000,000
San Jose Redev. Agcy. Participating VRDN, Series PA-42I,
3.25% (MBIA Insured) (Liquidity Facility Merrill Lynch) (c) 3,400,000
3,400,000
San Luis Obispo County Office of Ed. TRAN
Series 1996, 4.50% 10/9/97 5,385,000 5,388,809
San Luis Obispo Gen. Oblig. TRAN 4.50% 7/8/98 1,500,000 1,507,716
Santa Barbara Schools Fing. Auth. TRAN
Series 1997, 4.25% 6/30/98 5,500,000 5,517,403
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Santa Rosa Multi-Family Hsg. (Quail Run Apts./Santa Rosa
Hsg. Partners) Series 1997 A, 3.55% LOC U.S. Bank of
Washington, VRDN (b) $ 1,500,000 $ 1,500,000
Simi Valley Multi-Family Hsg. Rev. VRDN:
(LincolnWood Ranch Apt.)
3.35% LOC Sumitomo Bank Ltd. 2,200,000 2,200,000
(Shadowridge Apts.)
Series 1989, 3.25% LOC Citibank, N.A. (b) 4,800,000 4,800,000
Southern California Metropolitan Wtr. Dist. CP:
Series A, 3.55% 10/17/97 1,000,000 1,000,000
Series B, 3.35% 9/10/97 (Liquidity Facility WestDeutsche
Landesbank, Gironzentrale) 13,600,000 13,600,000
Series B, 3.80% 9/12/97 (Liquidity Facility WestDeutsche
Landesbank, Gironzentrale) 1,000,000 1,000,000
Series B, 3.50% 10/15/97 (Liquidity Facility WestDeutsche
Landesbank, Gironzentrale) 3,400,000 3,400,000
Series B, 3.55% 10/17/97 (Liquidity Facility WestDeutsche
Landesbank, Gironzentrale) 4,000,000 4,000,000
Southern California Pub. Pwr. Auth. Participating VRDN (c):
Series BT-90, 3.35% (Liquidity Facility Bankers Trust
Company, NY) 2,500,000 2,500,000
Series SG-35, 3.45% (Liquidity Facility Societe
Generale, France) 7,300,000 7,300,000
Torrance Hospital Rev. (Little Co. of Mary Hosp.- Torrance
Mem. Med. Ctr.) Series 1992, 3.20% LOC
Chase Manhattan Bank, VRDN 4,000,000 4,000,000
University of California CP Series A, 3.75% 9/18/97 7,500,000
7,500,000
Vallejo Multi-Family Hsg. Rev. (Hillside Terrace Apts./Vallejo
Hillside Assoc.) Series 1997 A, 3.15%
(FNMA Guaranteed) VRDN (b) 1,000,000 1,000,000
Vista City Ind. Dev. Auth. Rev. (Desalination Sys., Inc.)
Series 1995, 3.25% LOC Wells Fargo Bank N.A., VRDN (b) 1,780,000
1,780,000
842,306,220
PUERTO RICO - 0.7%
Puerto Rico Pwr. Auth. Pwr. Rev. Bonds (Muni. Sec. Trust Rec.
SGA44) Series AA, 3.65% tender 10/08/97
(Liquidity Facility Societe Generale, France) (c) 6,100,000
6,100,000
TOTAL INVESTMENTS - 100% $ 848,406,220
Total Cost for Income Tax Purposes $ 848,406,220
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
7. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At February 28, 1997, the fund had a capital loss carryforward of
approximately $457,000 of which $446,000 and $11,000 will expire on
February 28, 2003, and 2005, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS AUGUST 31, 1997 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 848,406,220
SEE ACCOMPANYING SCHEDULE
CASH 4,815,903
INTEREST RECEIVABLE 4,325,794
TOTAL ASSETS 857,547,917
LIABILITIES
ACCRUED MANAGEMENT FEE $ 276,221
OTHER PAYABLES AND ACCRUED EXPENSES 165,548
TOTAL LIABILITIES 441,769
NET ASSETS $ 857,106,148
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 857,580,630
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (474,482)
NET ASSETS, FOR 857,604,470 SHARES OUTSTANDING $ 857,106,148
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($857,106,148 (DIVIDED BY) 857,604,470 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED AUGUST 31, 1997 (UNAUDITED)
INTEREST INCOME $ 15,195,086
EXPENSES
MANAGEMENT FEE $ 1,612,351
TRANSFER AGENT, ACCOUNTING AND CUSTODIAN FEES AND EXPENSES 862,471
NON-INTERESTED TRUSTEES' COMPENSATION 1,823
REGISTRATION FEES 17,737
AUDIT 28,050
LEGAL 15,547
REPORTS TO SHAREHOLDERS 29,179
MISCELLANEOUS 3,004
TOTAL EXPENSES BEFORE REDUCTIONS 2,570,162
EXPENSE REDUCTIONS (7,274) 2,562,888
NET INTEREST INCOME 12,632,198
NET REALIZED GAIN (LOSS) ON INVESTMENTS (19,306)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,612,892
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
AUGUST 31, 1997 FEBRUARY 28,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 12,632,198 $ 21,214,752
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (19,306) (10,817)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,612,892 21,203,935
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (12,632,198) (21,214,752)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 1,673,509,037 2,802,872,804
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 12,351,069 20,627,708
COST OF SHARES REDEEMED (1,648,439,275) (2,736,308,324)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 37,420,831 87,192,188
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 37,401,525 87,181,371
NET ASSETS
BEGINNING OF PERIOD 819,704,623 732,523,252
END OF PERIOD $ 857,106,148 $ 819,704,623
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED YEARS ENDED FEBRUARY 28, TEN MONTHS
AUGUST 31, FEBRUARY 28, FEBRUARY 29, ENDED
1997 FEBRUARY 28,
(UNAUDITED) 1997 1996 1995 1994 1993
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING
OF PERIOD
INCOME FROM INVESTMENT .015 .029 .032 .026 .020 .019
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET (.015) (.029) (.032) (.026) (.020) (.019)
INTEREST INCOME
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
END OF PERIOD
TOTAL RETURN B, C 1.55% 2.90% 3.21% 2.60% 1.97% 1.92%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, $ 857,106 $ 819,705 $ 732,523 $ 675,185 $ 611,765 $ 568,280
END OF PERIOD
(000 OMITTED)
RATIO OF EXPENSES TO .62% A .62% .64% .62% .64% .62%
AVERAGE NET ASSETS A
RATIO OF EXPENSES .62% A .61% D .64% .62% .64% .62%
TO AVERAGE NET A
ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INTEREST 3.03% A 2.86% 3.17% 2.58% 1.95% 2.29%
INCOME TO AVERAGE A
NET ASSETS
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN(S) WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D 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 August 31, 1997 (Unaudited)
5. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity California Municipal Money Market Fund (the fund) is a fund
of Fidelity California Municipal Trust II (the trust) and is
authorized to issue an unlimited number of shares. The trust is
registered under the Investment Company Act of 1940, as amended (the
1940 Act), as an open-end management investment company organized as a
Massachusetts business trust. The financial statements have been
prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued
as earned. Accretion of discount represents unrealized gain until
realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net investment interest income.
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.
6. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas, an
affiliate of Fidelity Management & Research Company (FMR). The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in high-quality, short-term municipal securities of
various states and municipalities. Income distributions from the Cash
Fund are declared daily and paid monthly from net interest income.
Income distributions received by the fund are recorded as interest
income in the accompanying financial statements.
7. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the 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
the 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 .25%. 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
fee was equivalent to an annualized rate of .39% of average net
assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc.,
a wholly owned subsidiary of FMR, receives a fee from FMR of 50% of
the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for the fund.
The UMB has entered into a sub-contract with Fidelity Service Company,
Inc. (FSC), an affiliate of FMR, under which FSC performs the
activities associated with the fund's transfer and shareholder
servicing agent and accounting functions. The fund pays 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. The accounting fee is
based on the level of average net assets for the month plus
out-of-pocket expenses. For the period, FSC received transfer agent
and accounting fees amounting to $766,758 and $71,496, respectively.
For the period, the transfer agent fees were equivalent to an
annualized rate of .18% of average net assets.
Shareholders participating in the Fidelity Ultra Service
Account(registered trademark) Program (the Program) paid a $5.00
monthly fee to Fidelity Brokerage Services, Inc. (FBSI), an affiliate
of FMR, for performing services associated with the Program. For the
period, fees paid to FBSI by shareholders participating in the Program
amounted to $30,840. Effective September 1, 1997, the monthly fee was
eliminated.
8. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the period, the fund's custodian and transfer agent fees were reduced
by $4,605 and $2,669, respectively, under these arrangements.
PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on March 19,
1997. The meeting was adjourned with respect to Proposals 3, 4, 5, 6,
7 and 8 and reconvened on March 24, 1997. The results of votes taken
among shareholders on proposals are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees:
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 1,063,381,296.263 95.811
Withheld 46,498,081.130 4.189
TOTAL 1,109,879,377.393 100.000
RALPH F. COX
Affirmative 1,064,388,677.803 95.901
Withheld 45,490,699.590 4.099
TOTAL 1,109,879,377.393 100.000
PHYLLIS BURKE DAVIS
Affirmative 1,064,138,696.363 95.879
Withheld 45,740,681.030 4.121
TOTAL 1,109,879,377.393 100.000
ROBERT M. GATES
Affirmative 1,062,692,744.383 95.748
Withheld 47,186,633.010 4.252
TOTAL 1,109,879,377.393 100.000
EDWARD C. JOHNSON 3RD
Affirmative 1,063,987,081.843 95.865
Withheld 45,892,295.550 4.135
TOTAL 1,109,879,377.393 100.000
E. BRADLEY JONES
Affirmative 1,063,352,533.933 95.808
Withheld 46,526,843.460 4.192
TOTAL 1,109,879,377.393 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 1,064,780,516.393 95.937
Withheld 45,098,861.000 4.063
TOTAL 1,109,879,377.393 100.000
PETER S. LYNCH
Affirmative 1,064,907,095.083 95.948
Withheld 44,972,282.310 4.052
TOTAL 1,109,879,377.393 100.000
WILLIAM O. MCCOY
Affirmative 1,064,870,416.383 95.945
Withheld 45,008,961.010 4.055
TOTAL 1,109,879,377.393 100.000
GERALD C. MCDONOUGH
Affirmative 1,063,599,667.373 95.830
Withheld 46,279,710.020 4.170
TOTAL 1,109,879,377.393 100.000
MARVIN L. MANN
Affirmative 1,064,040,707.343 95.870
Withheld 45,838,670.050 4.130
TOTAL 1,109,879,377.393 100.000
THOMAS R. WILLIAMS
Affirmative 1,063,908,817.763 95.858
Withheld 45,970,559.630 4.142
TOTAL 1,109,879,377.393 100.000
PROPOSAL 2
To ratify the selection of Price Waterhouse LLP as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 1,054,963,513.043 95.052
AGAINST 18,234,491.380 1.643
ABSTAIN 36,681,372.970 3.305
TOTAL 1,109,879,377.393 100.000
PROPOSAL 3
To amend the Trust Instrument to provide dollar-based voting rights
for shareholders of the trust.
# OF TRUST % OF TRUST
SHARES VOTED SHARES VOTED
AFFIRMATIVE 1,007,339,238.553 90.761
AGAINST 50,592,167.240 4.559
ABSTAIN 51,944,533.600 4.680
TOTAL 1,109,875,939.393 100.000
NOT VOTING 3,438.000
# OF FUND % OF FUND
SHARES VOTED SHARES VOTED
AFFIRMATIVE 355,455,114.553 88.836
AGAINST 22,682,403.850 5.669
ABSTAIN 21,986,540.670 5.495
TOTAL 400,124,059.073 100.000
NOT VOTING 3,453.000
PROPOSAL 4
To adopt a new fundamental investment policy permitting the fund to
invest all of its assets in another open-end investment company
managed by FMR or an affiliate with substantially the same investment
objective and policies.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 309,591,226.793 77.374
AGAINST 59,135,405.190 14.779
ABSTAIN 31,397,427.090 7.847
TOTAL 400,124,059.073 100.000
NOT VOTING 3,453.000
PROPOSAL 5
To approve an amended management contract for the fund that would
reduce the management fee payable to FMR by the fund as FMR's assets
under management increase.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 327,946,003.973 81.960
AGAINST 31,841,374.350 7.958
ABSTAIN 40,340,133.750 10.082
TOTAL 400,127,512.073 100.000
PROPOSAL 6
To amend the fund's fundamental investment limitation concerning
senior securities for the fund.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 314,555,946.648 78.615
AGAINST 44,473,147.750 11.114
ABSTAIN 41,094,964.675 10.271
TOTAL 400,124,059.073 100.000
NOT VOTING 3,453.000
PROPOSAL 7
To amend the fund's fundamental investment limitation concerning
borrowing to require a reduction in borrowing if borrowings exceed the
33 1/3% limit for any reason rather than solely because of a decline
in net assets.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 314,532,903.328 78.609
AGAINST 45,193,241.760 11.294
ABSTAIN 40,397,913.985 10.097
TOTAL 400,124,059.073 100.000
NOT VOTING 3,453.000
PROPOSAL 8
To amend the fund's fundamental investment limitation concerning the
underwriting of securities.
# OF % OF
SHARES VOTED SHARES VOTED
AFFIRMATIVE 315,353,541.828 78.814
AGAINST 41,750,394.440 10.434
ABSTAIN 43,023,575.805 10.752
TOTAL 400,124,059.073 100.000
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
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the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
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To review orders and mutual
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WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
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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 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 193
Boston, MA 02210-0193
(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 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Boyce I. Greer, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, 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
* INDEPENDENT TRUSTEES
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
