SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-43529)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 23 [X]
and
REGISTRATION STATEMENT (No. 811-6440)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 23 [X]
Fidelity Aberdeen Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(X) on (May 27, 2000) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Like securities of all mutual
funds, these securities have
not been approved or
disapproved by the
Securities and Exchange
Commission, and the
Securities and Exchange
Commission has not
determined if this
prospectus is accurate or
complete. Any
representation to the
contrary is a criminal
offense.
FIDELITY
FREEDOM
FUNDS(REGISTERED TRADEMARK)
FIDELITY FREEDOM INCOME FUND(REGISTERED TRADEMARK)
(fund number 369, trading symbol FFFAX)
FIDELITY FREEDOM 2000 FUND(REGISTERED TRADEMARK)
(fund number 370, trading symbol FFFBX)
FIDELITY FREEDOM 2010 FUND(REGISTERED TRADEMARK)
(fund number 371, trading symbol FFFCX)
FIDELITY FREEDOM 2020 FUND(REGISTERED TRADEMARK)
(fund number 372, trading symbol FFFDX)
FIDELITY FREEDOM 2030 FUND(REGISTERED TRADEMARK)
(fund number 373, trading symbol FFFEX)
PROSPECTUS
MAY 27, 2000
(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
FUND SUMMARY 4 INVESTMENT SUMMARY
9 PERFORMANCE
12 FEE TABLE
FUND BASICS 14 INVESTMENT DETAILS
21 VALUING SHARES
SHAREHOLDER INFORMATION 21 BUYING AND SELLING SHARES
28 EXCHANGING SHARES
29 ACCOUNT FEATURES AND POLICIES
32 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS
32 TAX CONSEQUENCES
FUND SERVICES 32 FUND MANAGEMENT
33 FUND DISTRIBUTION
APPENDIX 33 FINANCIAL HIGHLIGHTS
FUND SUMMARY
INVESTMENT SUMMARY
INVESTMENT OBJECTIVE
FREEDOM INCOME FUND seeks high current income and, as a secondary
objective, capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers SM, Inc. (Strategic Advisers)'s principal
investment strategies include:
(small solid bullet) Investing in a combination of Fidelity(registered
trademark) equity, fixed-income and money market funds using a
moderate asset allocation strategy designed for investors already in
retirement.
(small solid bullet) Allocating assets among these underlying Fidelity
funds according to a stable target asset allocation.
(small solid bullet) Using a target asset allocation as of March 31,
2000 of approximately:
Domestic
Equity
Funds 20%
International
Equity Funds 0%
Investment-
Grade Fixed-
Income
Funds 40%
High Yield
Fixed-Income
Funds 0%
Money Market
Funds 40%
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 40.0
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt or money market security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, [particularly
emerging markets,] can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market.
(small solid bullet) FINANCIAL SERVICES EXPOSURE. Changes in
government regulation and interest rates and economic downturns can
have a significant negative effect on issuers in the financial
services sector.
(small solid bullet) PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. A decline in the credit quality of
an issuer or the provider of credit support or a maturity-shortening
structure for a security can cause the price of a money market
security to decrease. The value of securities of smaller issuers can
be more volatile than that of larger issuers. Lower-quality debt
securities (those of less than investment-grade quality) can be more
volatile due to increased sensitivity to adverse issuer, political,
regulatory, market or economic developments.
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently from the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
(small solid bullet) "GROWTH" INVESTING. "Growth" stocks can perform
differently from the market as a whole and other types of stocks and
can be more volatile than other types of stocks.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently from the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
FREEDOM 2000 FUND seeks high total return.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers' principal investment strategies include:
(small solid bullet) Investing in a combination of Fidelity equity,
fixed-income and money market funds using a moderate asset allocation
strategy designed for investors expecting to retire around the year
2000.
(small solid bullet) Allocating assets among these underlying Fidelity
funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches 20% in domestic equity
funds, 40% in investment-grade fixed-income funds and 40% in money
market funds (approximately five to ten years after the year 2000).
(small solid bullet) Using a target asset allocation as of March 31,
2000 of approximately:
Domestic
Equity
Funds %
International
Investment-
Grade Fixed-
Income
Funds %
High Yield
Fixed-Income
Funds %
Money Market
Funds %
Equity Funds %
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 35.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 5, Value: 19.0
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt or money market security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, [particularly
emerging markets,] can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market.
(small solid bullet) FINANCIAL SERVICES EXPOSURE. Changes in
government regulation and interest rates and economic downturns can
have a significant negative effect on issuers in the financial
services sector.
(small solid bullet) PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. A decline in the credit quality of
an issuer or the provider of credit support or a maturity-shortening
structure for a security can cause the price of a money market
security to decrease. The value of securities of smaller issuers can
be more volatile than that of larger issuers. Lower-quality debt
securities (those of less than investment-grade quality) can be more
volatile due to increased sensitivity to adverse issuer, political,
regulatory, market or economic developments.
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently from the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
(small solid bullet) "GROWTH" INVESTING. "Growth" stocks can perform
differently from the market as a whole and other types of stocks and
can be more volatile than other types of stocks.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently from the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
FREEDOM 2010 FUND seeks high total return.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers' principal investment strategies include:
(small solid bullet) Investing in a combination of Fidelity equity,
fixed-income and money market funds using a moderate asset allocation
strategy designed for investors expecting to retire around the year
2010.
(small solid bullet) Allocating assets among these underlying Fidelity
funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches 20% in domestic equity
funds, 40% in investment-grade fixed-income funds and 40% in money
market funds (approximately five to ten years after the year 2010).
(small solid bullet) Using a target asset allocation as of March 31,
2000 of approximately:
Domestic
Equity
Funds %
International
Equity Funds %
Investment-
Grade Fixed-
Income
Funds %
High Yield
Fixed-Income
Funds %
Money Market
Funds %
Row: 1, Col: 1, Value: 30.0
Row: 1, Col: 2, Value: 52.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 6.0
Row: 1, Col: 5, Value: 4.0
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, [particularly
emerging markets,] can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market.
(small solid bullet) PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
Lower-quality debt securities (those of less than investment-grade
quality) can be more volatile due to increased sensitivity to adverse
issuer, political, regulatory, market or economic developments [and
can be difficult to resell].
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently from the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
(small solid bullet) "GROWTH" INVESTING. "Growth" stocks can perform
differently from the market as a whole and other types of stocks and
can be more volatile than other types of stocks.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently from an the market as a whole and other types of stocks
and can continue to be undervalued by the market for long periods of
time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
FREEDOM 2020 FUND seeks high total return.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers' principal investment strategies include:
(small solid bullet) Investing in a combination of Fidelity equity,
fixed-income and money market funds using a moderate asset allocation
strategy designed for investors expecting to retire around the year
2020.
(small solid bullet) Allocating assets among these underlying Fidelity
funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches 20% in domestic equity
funds, 40% in investment-grade fixed-income funds and 40% in money
market funds (approximately five to ten years after the year 2020).
(small solid bullet) Using a target asset allocation as of March 31,
2000 of approximately:
Domestic
Equity
Funds %
International
Equity Funds %
Investment-
Grade Fixed-
Income
Funds %
High Yield
Fixed-Income
Funds %
Money Market
Funds %
Row: 1, Col: 1, Value: 15.0
Row: 1, Col: 2, Value: 66.0
Row: 1, Col: 3, Value: 11.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 0.0
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union (EMU).
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN SOUTHEAST ASIA. Most
Southeast Asian economies are generally considered emerging markets
and are currently in recessions. International trade, government
policy and political and social stability significantly affect
economic growth. The markets in Southeast Asia can be extremely
volatile.
(small solid bullet) PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
Lower-quality debt securities (those of less than investment-grade
quality) can be more volatile due to increased sensitivity to adverse
issuer, political, regulatory, market or economic developments [and
can be difficult to resell].
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently from the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
(small solid bullet) "GROWTH" INVESTING. "Growth" stocks can perform
differently from the market as a whole and other types of stocks and
can be more volatile than other types of stocks.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently from the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
INVESTMENT OBJECTIVE
FREEDOM 2030 FUND seeks high total return.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers' principal investment strategies include:
(small solid bullet) Investing in a combination of Fidelity equity,
fixed-income and money market funds using a moderate asset allocation
strategy designed for investors expecting to retire around the year
2030.
(small solid bullet) Allocating assets among these underlying Fidelity
funds according to an asset allocation strategy that becomes
increasingly conservative until it reaches 20% in domestic equity
funds, 40% in investment-grade fixed-income funds and 40% in money
market funds (approximately five to ten years after the year 2030).
(small solid bullet) Using a target asset allocation as of March 31,
2000 of approximately:
Domestic
Equity
Funds %
International
Equity Funds %
Investment-
Grade Fixed-
Income
Funds %
High Yield
Fixed-Income
Funds %
Money Market
Funds %
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 70.0
Row: 1, Col: 3, Value: 14.0
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 0.0
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy, significantly affect economic growth.
(small solid bullet) GEOGRAPHIC CONCENTRATION IN SOUTHEAST ASIA. Most
Southeast Asian economies are generally considered emerging markets
and are currently in recessions. International trade, government
policy and political and social stability significantly affect
economic growth. The markets in Southeast Asia can be extremely
volatile.
(small solid bullet) [PREPAYMENT. The ability of an issuer of a debt
security to repay principal prior to a security's maturity can cause
greater price volatility if interest rates change.]
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
Lower-quality debt securities (those of less than investment-grade
quality) can be more volatile due to increased sensitivity to adverse
issuer, political, regulatory, market or economic developments [and
can be difficult to resell].
(small solid bullet) QUANTITATIVE INVESTING. Securities selected using
quantitative analysis can perform differently from the market as a
whole as a result of the factors used in the analysis, the weight
placed on each factor, and changes in the factors' historical trends.
(small solid bullet) "GROWTH" INVESTING. "Growth" stocks can perform
differently from the market as a whole and other types of stocks and
can be more volatile than other types of stocks.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently from the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
PERFORMANCE
The following information illustrates the changes in each Freedom
Fund's performance from year to year and compares each Freedom Fund's
performance to the performance of a market index and a combination of
market indexes over various periods of time. Returns are based on past
results and are not an indication of future performance.
YEAR-BY-YEAR RETURNS
FREEDOM INCOME
Calendar Years 1997 1998 1999
% % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR FREEDOM INCOME, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE], [YEAR])
AND THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED
[MONTH][DATE], [YEAR]).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR FREEDOM INCOME
WAS __%.
FREEDOM 2000
Calendar Years 1997 1998 1999
% % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR FREEDOM 2000, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE], [YEAR]) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE],
[YEAR]).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR FREEDOM 2000
WAS __%.
FREEDOM 2010
Calendar Years 1997 1998 1999
% % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR FREEDOM 2010, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE], [YEAR]) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE],
[YEAR]).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR FREEDOM 2010
WAS __%.
FREEDOM 2020
Calendar Years 1997 1998 1999
% % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR FREEDOM 2020, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE], [YEAR]) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE],
[YEAR]).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR FREEDOM 2020
WAS __%.
FREEDOM 2030
Calendar Years 1997 1998 1999
% % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
DURING THE PERIODS SHOWN IN THE CHART FOR FREEDOM 2030, THE HIGHEST
RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE], [YEAR]) AND
THE LOWEST RETURN FOR A QUARTER WAS __% (QUARTER ENDED [MONTH][DATE],
[YEAR]).
THE YEAR-TO-DATE RETURN AS OF MARCH 31, 2000 FOR FREEDOM 2030
WAS __%.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Life of fundA,B
December 31, 1999
Freedom Income % %
Lehman Bros. Aggregate Bond % %
Index
Freedom Income Composite Index % %
Freedom 2000 % %
Lehman Bros. Aggregate Bond % %
Index
Freedom 2000 Composite Index % %
Freedom 2010 % %
S&P 500 % %
Freedom 2010 Composite Index % %
Freedom 2020 % %
S&P 500 % %
Freedom 2020 Composite Index % %
Freedom 2030 % %
S&P 500 % %
Freedom 2030 Composite Index % %
A FROM OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS).
[If Strategic Advisers had not reimbursed certain fund expenses during
these periods, each Freedom Fund's returns would have been lower.]
Standard & Poor's 500 Index (S&P 500(registered trademark)) is a
market capitalization-weighted index of common stocks.
Fidelity Freedom Funds' Composite Indexes are hypothetical
representations of the performance of each Freedom Fund's asset
classes according to their respective weightings adjusted on June 30
and December 31 of each calendar year for Freedom Funds with target
retirement dates, to reflect the increasingly conservative asset
allocations.
The following indexes are used to calculate a Freedom Fund's composite
index: Wilshire 5000 Index for the domestic equity fund class, Morgan
Stanley Capital International Europe, Australasia, Far East (EAFE)
Index for the international equity fund class, Lehman Brothers
Aggregate Bond Index for the investment-grade fixed-income fund class,
Merrill Lynch High Yield Master II Index for the high yield
fixed-income fund class, and Lehman Brothers 3-Month Treasury Bill
Index for the money market fund class. The index weightings of each
composite index are rebalanced monthly.
Wilshire 5000 is a market capitalization-weighted index of
approximately 7,000 U.S. equity securities.
Morgan Stanley Capital International Europe, Australasia and Far East
(EAFE) Index is a market capitalization-weighted index that is
designed to represent the performance of developed stock markets
outside the United States and Canada. As of December 31, 1999 ,
the index included over ____ equity securities of companies domiciled
in ___ countries.
The Lehman Brothers Aggregate Bond Index is a market value-weighted
index of investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities,
with maturities of one year or more.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The Lehman Brothers 3-Month Treasury Bill Index represents the average
of Treasury Bill rates for each of the prior three months, adjusted to
a bond equivalent yield basis (short-term and money market
instruments).
FEE TABLE
The following table describes the fees and expenses that are incurred
when you buy, hold, or sell shares of a Freedom Fund. [The annual fund
operating expenses provided below for each Freedom Fund are based on
historical expenses, adjusted to reflect current fees.] [The annual
fund operating expenses provided below for each Freedom Fund do not
reflect the effect of any [expense reimbursements] [[or] reduction of
certain expenses] during the period.] [The annual fund operating
provided below for each Freedom Fund are based on historical
expenses.]
SHAREHOLDER FEES (PAID BY THE INVESTOR DIRECTLY)
Sales charge (load) on None
purchases and reinvested
distributions
Deferred sales charge (load) None
on redemptions
Annual account maintenance $12.00
fee (for accounts under
$2,500)
ANNUAL FUND OPERATING EXPENSES (PAID FROM FUND ASSETS)
FREEDOM INCOME Management fee %
Distribution and Service %
(12b-1) fee
Other expenses %
Total annual fund operating %
expensesA
FREEDOM 2000 Management fee %
Distribution and Service %
(12b-1) fee
Other expenses %
Total annual fund operating %
expensesA
FREEDOM 2010 Management fee %
Distribution and Service %
(12b-1) fee
Other expenses %
Total annual fund operating %
expensesA
FREEDOM 2020 Management fee %
Distribution and Service %
(12b-1) fee
Other expenses %
Total annual fund operating %
expensesA
FREEDOM 2030 Management fee %
Distribution and Service %
(12b-1) fee
Other expenses %
Total annual fund operating %
expensesA
A EFFECTIVE NOVEMBER 1, 1996, STRATEGIC ADVISERS HAS VOLUNTARILY
AGREED TO REIMBURSE EACH FREEDOM FUND TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, BROKERAGE COMMISSIONS
AND EXTRAORDINARY EXPENSES) EXCEED 0.08% OF ITS AVERAGE NET ASSETS.
THIS ARRANGEMENT CAN BE DISCONTINUED BY STRATEGIC ADVISERS AT ANY
TIME.
Through arrangements with each Freedom Fund's [custodian] [and]
[transfer agent], credits realized as a result of uninvested cash
balances are used to reduce fund expenses. Including these reductions,
the total fund operating expenses [, after reimbursement,] would have
been ____% for Freedom Income, ____% for Freedom 2000, ____% for
Freedom 2010, ____% for Freedom 2020, and ____% for Freedom 2030.
Each Freedom Fund will not incur any sales charges, but it may incur
exchange fees or redemption fees (trading fees), if applicable, when
it invests in underlying Fidelity funds.
In addition to the total operating expenses shown above, each Freedom
Fund, as a shareholder in an underlying Fidelity fund, will indirectly
bear its pro rata share of the fees and expenses incurred by the
underlying Fidelity fund, and each Freedom Fund's investment return
will be net of underlying Fidelity fund expenses.
The combined total expense ratios of each Freedom Fund
(calculated as a percentage of average net assets) are ____% for
Freedom Income; ____% for Freedom 2000; ____% for Freedom 2010; ____%
for Freedom 2020; and ____% for Freedom 2030. Each Freedom Fund's
combined total expense ratio is based on its total operating
expense ratio plus a weighted average of the total operating expense
ratios [, after [expense reimbursement] [and] [expense
reduction[s]],] of the underlying Fidelity funds in which it was
invested ( for each underlying Fidelity fund's most recently
reported fiscal-year ) as of March 31, 2000 . The combined
total expense ratios for each Freedom Fund may be higher or lower
depending on the allocation of a fund's assets among the underlying
Fidelity funds and the actual expenses of the underlying Fidelity
funds.
This EXAMPLE helps you compare the cost of investing in the Freedom
Funds with the cost of investing in other mutual funds.
Let's say, hypothetically, that each Freedom Fund's annual return is
5%, that your shareholder fees are exactly as described in the fee
table, and that each Freedom Fund's combined total expense
ratio i ncludes each Freedom Fund's annual operating expenses
exactly as described in the fee table and the weighted average
of the total operating expenses of each of the underlying Fidelity
funds[, before [expense reimbursement] [and] [expense
reduction[s]]] . This example illustrates the effect of fees and
expenses, but is not meant to suggest actual or expected fees and
expenses or returns, all of which may vary. For every $10,000 you
invested, here's how much you would pay in total expenses if you close
your account at the end of each time period indicated
FREEDOM INCOME 1 year $
3 years $
5 years $
10 years $
FREEDOM 2000 1 year $
3 years $
5 years $
10 years $
FREEDOM 2010 1 year $
3 years $
5 years $
10 years $
FREEDOM 2020 1 year $
3 years $
5 years $
10 years $
FREEDOM 2030 1 year $
3 years $
5 years $
10 years $
FUND BASICS
INVESTMENT DETAILS
INVESTMENT OBJECTIVE
Each of FREEDOM 2000 FUND, FREEDOM 2010 FUND, FREEDOM 2020 FUND, and
FREEDOM 2030 FUND seeks high total return.
FREEDOM INCOME FUND seeks high current income and, as a secondary
objective, capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
Strategic Advisers invests each Freedom Fund's assets in a combination
of Fidelity funds: domestic and international equity funds,
investment-grade and high yield fixed-income funds, and money market
funds (underlying Fidelity funds). The Freedom Funds differ primarily
due to their asset allocations among these fund types. The target
asset allocation strategy for each Freedom Fund is designed to provide
an approach to asset allocation that is neither overly aggressive nor
overly conservative.
Strategic Advisers allocates the assets of each Freedom Fund with a
target retirement date (Freedom 2000, Freedom 2010, Freedom 2020, and
Freedom 2030) among underlying Fidelity funds according to an asset
allocation strategy that becomes increasingly conservative over time.
Each fund's name refers to the approximate retirement year of the
investors for whom the fund's asset allocation strategy is designed.
For example, Freedom 2030 is designed for investors planning to retire
around the year 2030. Freedom 2030, whose target retirement is
approximately 30 years away, will start with a relatively aggressive
target asset allocation, with a substantial portion of its assets
invested in equity funds and a modest portion of its assets invested
in fixed-income funds. By contrast, Freedom 2000, whose target
retirement year is less than a year away, will start with a relatively
conservative target asset allocation, with less than half of its
assets invested in equity funds and the majority of its assets
invested in fixed-income and money market funds.
Freedom Income is designed for investors in their retirement years.
Strategic Advisers allocates the fund's assets according to a stable
target asset allocation that emphasizes fixed-income and money market
funds but also includes a small amount of equity funds.
The table below lists the underlying Fidelity funds in which
each Freedom Fund currently may invest and each Freedom Fund's
approximate target asset allocation to each underlying Fidelity fund
as of March 31, 2000 . Strategic Advisers may change these
percentages over time.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fund Categories Freedom Income Freedom 2000 Freedom 2010 Freedom 2020 Freedom 2030
EQUITY FUNDS
DOMESTIC EQUITY FUNDS
Fidelity Blue Chip Growth Fund % % % % %
Fidelity Disciplined Equity % % % % %
Fund
Fidelity Equity-Income Fund % % % % %
Fidelity Fund % % % % %
Fidelity Growth & Income % % % % %
Portfolio
Fidelity Growth Company Fund % % % % %
Fidelity OTC Portfolio % % % % %
INTERNATIONAL EQUITY FUNDS
Fidelity Diversified % % % % %
International Fund
Fidelity Europe Fund % % % % %
Fidelity Japan Fund % % % % %
Fidelity Overseas Fund % % % % %
Fidelity Southeast Asia Fund % % % % %
FIXED-INCOME FUNDS
INVESTMENT-GRADE FIXED-INCOME
FUNDS
Fidelity Government Income Fund % % % % %
Fidelity Intermediate Bond Fund % % % % %
Fidelity Investment Grade % % % % %
Bond Fund
HIGH YIELD FIXED-INCOME FUND
Fidelity Capital & Income Fund % % % % %
MONEY MARKET FUND
Fidelity Money Market Trust: % % % % %
Retirement Money Market
Portfolio
Note: The allocation
percentages may not add to
100% due to rounding.
</TABLE>
The chart below illustrates each Freedom Fund's approximate target
asset allocation among equity, fixed-income, and money market funds as
of March 31, 2000 . The chart also illustrates how these
allocations may change over time. The Freedom Funds' target asset
allocations may differ from this illustration.
DESCRIPTION OF CHART WHICH APPEARS ON PAGE 20 OF THE FIDELITY FREEDOM
FUNDS' PROSPECTUS:
The chart is a rectangular box. The x-axis (the bottom of the box)
charts, from left to right, years to retirement and years after
retirement in five-year intervals, counting down from __ years to
retirement, reaching retirement, and then counting up to __ years
after retirement. Immediately below and parallel to the x-axis is a
straight line with an arrow at each end. A perpendicular line crosses
the line at retirement and the word "Retirement" appears below the
perpendicular line. The words "Years to Retirement" appear below the
parallel line to the left of the perpendicular line, and the words
"Years after Retirement" appear below the parallel line to the right
of the perpendicular line. The y-axis (the left side of the box) is
marked in ten percentage point intervals up from 0% to 100% to
indicate the percentage of assets allocated to equity, fixed-income,
and money market funds.
The Freedom Funds are positioned along the top of the box at __, __,
__, and _____ years to retirement for Freedom 2030 Fund, Freedom 2020
Fund, Freedom 2010 Fund, and Freedom 2000 Fund, respectively. Freedom
Income Fund is positioned at the top of the box at _____ years after
retirement. Each Fund's position is indicated with a downward
pointing solid triangle.
Inside the box are vertical lines (from the top of the box to the
bottom of the box) at each of the five-year intervals marked on the
x-axis. Also inside the box, directly below each Fund's position, are
data points that indicate the target asset allocation for that Fund as
of March 31, 2000. The first set of data points is charted at __%,
__%, __%, __%, and __% for Freedom 2030 Fund, Freedom 2020 Fund,
Freedom 2010 Fund, Freedom 2000 Fund, and Freedom Income Fund,
respectively. The second set of data points is charted at __%, __%,
and __% for Freedom 2010 Fund, Freedom 2000 Fund, and Freedom Income
Fund, respectively. The data points are indicated by a solid circle.
The data points in each set are connected by a dotted line. The area
on the chart from the x-axis up to the dotted line connecting the
first set of data points (the "first dotted line") represents the
percentage allocation in equity funds. The words "Equity Funds"
appear in this area. The area on the chart from the first dotted line
up to the dotted line connecting the second set of data points (the
"second dotted line") represents the percentage allocation in
fixed-income funds. The words "Fixed-Income Funds" appear in this
area. The area on the chart from the second dotted line up to the top
of the chart represents the percentage allocation in money market
funds. The words "Money Market Funds" appear in this area.
When the target asset allocation of a Freedom Fund with a target
retirement date matches Freedom Income's target asset allocation
(approximately five to ten years after the fund's retirement date), it
is expected that the fund will be combined with Freedom Income and the
fund's shareholders will become shareholders of Freedom Income.
Strategic Advisers intends to manage each Freedom Fund according to
its target asset allocation strategy, and does not intend to trade
actively among underlying Fidelity funds or intend to attempt to
capture short-term market opportunities. However, Strategic Advisers
may modify the target asset allocation strategy for any Freedom Fund
and modify the selection of underlying Fidelity funds for any Freedom
Fund from time to time.
DESCRIPTION OF UNDERLYING FIDELITY FUNDS
Although the underlying Fidelity funds are categorized generally as
equity (domestic or international), fixed-income (investment-grade or
high yield) and money market funds, many of the underlying Fidelity
funds may invest in a mix of securities of foreign and domestic
issuers, investment-grade and high yield bonds, and other securities.
DOMESTIC EQUITY FUNDS
FIDELITY BLUE CHIP GROWTH FUND seeks growth of capital over the long
term.
FMR normally invests the fund's assets primarily in common stocks
of well-known and established companies.
FMR normally invests at least 65% of the fund's total assets in blue
chip companies. FMR defines blue chip companies to include those with
a market capitalization of at least $200 million, if the company's
stock is included in the S&P 500 or the Dow Jones Industrial Average,
or $1 billion if not included in either index.
FMR invests the fund's assets in companies FMR believes have
above-average growth potential. Growth may be measured by factors such
as earnings or revenue. Companies with high growth potential tend to
be companies with higher than average price/earnings (P/E) ratios.
Companies with strong growth potential often have new products,
technologies, distribution channels, or other opportunities, or have a
strong industry or market position. The stocks of these companies are
often called "growth" stocks.
FMR may invest the fund's assets in securities of foreign issuers
in addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY DISCIPLINED EQUITY FUND seeks capital growth.
FMR normally invests at least 65% of the fund's total assets in common
stocks.
FMR seeks to reduce the impact of industry weightings on the
performance of the fund by considering each industry's weighting in
the S&P 500 when allocating the fund's investments across industries.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR uses a disciplined
approach that involves computer-aided, quantitative analysis supported
by fundamental analysis. FMR's computer model systematically reviews
thousands of stocks, using data such as historical earnings, dividend
yield, earnings per share, and other quantitative factors. Then, the
issuers of potential investments are analyzed further using
fundamental factors such as growth potential, earnings estimates, and
financial condition.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY EQUITY-INCOME FUND seeks reasonable income. In pursuing this
objective, the fund will also consider the potential for capital
appreciation. The fund seeks a yield for its shareholders that exceeds
the yield on the securities comprising the S&P 500.
FMR normally invests at least 65% of the fund's total assets in
income-producing equity securities. FMR may also invest the fund's
assets in other types of equity securities and debt securities,
including lower-quality debt securities.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR's emphasis on above-average income-producing equity securities
tends to lead to investments in large cap "value" stocks. However, FMR
is not constrained by any particular investment style. In buying and
selling securities for the fund, FMR relies on fundamental analysis of
each issuer and its potential for success in light of its current
financial condition, its industry position, and economic and market
conditions. Factors considered include growth potential, earnings
estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY FUND seeks long-term capital growth.
FMR normally invests the fund's assets primarily in common stocks.
FMR, to some extent, limits the emphasis on the fund's growth
objective by investing a portion of the fund's assets in securities
selected for their current income characteristics. FMR may from time
to time invest a portion of the fund's assets in bonds, including
lower-quality debt securities.
FMR may invest the fund's assets in securities of foreign issuers
in addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY GROWTH & INCOME PORTFOLIO seeks high total return through a
combination of current income and capital appreciation.
FMR normally invests a majority of the fund's assets in common
stocks with a focus on those that pay current dividends and show
potential for capital appreciation. FMR may also invest the fund's
assets in bonds, including lower-quality debt securities, as well as
stocks that are not currently paying dividends, but offer prospects
for future income or capital appreciation.
FMR may invest the fund's assets in securities of foreign issuers
in addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY GROWTH COMPANY FUND seeks capital appreciation.
FMR normally invests the fund's assets primarily in common stocks.
FMR invests the fund's assets in companies FMR believes have
above-average growth potential. Growth may by measured by factors such
as earnings or revenue.
Companies with high growth potential tend to be companies with higher
than average price/earnings (P/E) ratios. Companies with strong growth
potential often have new products, technologies, distribution
channels, or other opportunities, or have a strong industry or market
position. The stocks of these companies are often called "growth"
stocks.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY OTC PORTFOLIO seeks capital appreciation.
FMR normally invests the fund's assets primarily in common
stocks.
FMR normally invests at least 65% of the fund's total assets in
securities principally traded on the over-the-counter (OTC) market.
OTC securities are securities principally traded on the OTC market (a
telephone or computer network that connects securities dealers).
However, OTC securities can be listed for trading on the New York or
American Stock Exchange or a foreign exchange and may include American
Depositary Receipts and securities eligible for unlisted trading
privileges on such exchanges. Securities that begin to trade
principally on an exchange after purchase continue to be considered
OTC securities for the purpose of the 65% policy. OTC securities can
be issued by companies of any size. However, the OTC market has more
small and medium-sized companies than other markets. FMR may also
invest the fund's assets in non-OTC securities.
FMR may invest the fund's assets in securities of foreign issuers
in addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks or a
combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INTERNATIONAL EQUITY FUNDS
FIDELITY DIVERSIFIED INTERNATIONAL FUND seeks capital growth.
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR uses a disciplined
approach that involves computer-aided, quantitative analysis supported
by fundamental analysis. FMR's computer model systematically reviews
thousands of stocks, using data such as historical earnings, dividend
yield, earnings per share, and other quantitative factors. Then, the
issuers of potential investments are analyzed further using
fundamental factors such as growth potential, earnings estimates, and
financial condition.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY EUROPE FUND seeks growth of capital over the long-term.
FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY JAPAN FUND seeks long-term growth of capital.
FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY OVERSEAS FUND seeks long-term growth of capital.
FMR normally invests at least 65% of the fund's total assets in
foreign securities. FMR normally invests the fund's assets primarily
in common stocks.
FMR normally diversifies the fund's investments across different
countries and regions. In allocating the fund's investments across
countries and regions, FMR will consider the size of the market in
each country and region relative to the size of the international
market as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY SOUTHEAST ASIA FUND seeks capital appreciation.
FMR normally invests at least 65% of the fund's total assets in
securities of Southeast Asian issuers. Southeast Asia includes Hong
Kong, Indonesia, South Korea, Malaysia, the Philippines, the People's
Republic of China, Singapore, Taiwan, and Thailand. FMR normally
invests the fund's assets primarily in common stocks.
FMR normally diversifies the fund's investments across different
Southeast Asian countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Southeast Asia as a whole.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates, and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
INVESTMENT-GRADE FIXED-INCOME FUNDS
FIDELITY GOVERNMENT INCOME FUND seeks a high level of current
income, consistent with preservation of principal.
FMR normally invests the fund's assets in U.S. Government
securities and instruments related to U.S. Government securities. FMR
normally invests at least 65% of the fund's total assets in U.S.
Government securities. FMR does not currently intend to invest more
than 40% of the fund's assets in mortgage securities.
FMR uses the Lehman Brothers Government Bond Index as a guide in
structuring the fund and selecting its investments. FMR manages
the fund to have similar overall interest rate risk to the index. As
of July 31, 1999 , the dollar-weighted average maturity of the
fund and the index was approximately 8.6 and 8.9 years,
respectively. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be
substantially shorter than its stated maturity.
FMR allocates the fund's assets among different market sectors
(for example, U.S. Treasury or U.S. Government agency securities) and
different maturities based on its view of the relative value of each
sector or maturity.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY INTERMEDIATE BOND FUND seeks a high level of current
income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment- grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Intermediate Government/Corporate Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years. As of
April 30, 1999 , the dollar-weighted average maturity of the
fund and the index was approximately ____ and ____
years, respectively. In determining a security's maturity for purposes
of calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be
substantially shorter than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
To earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY INVESTMENT GRADE BOND FUND seeks a high level of current
income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Aggregate Bond Index as a guide in
structuring the fund and selecting its investments. FMR manages
the fund to have similar overall interest rate risk to the index. As
of April 30, 1999 , the dollar-weighted average maturity of the
fund and the index was approximately ____ and ____
years, respectively. In determining a security's maturity for purposes
of calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be
substantially shorter than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
To earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
HIGH YIELD FIXED-INCOME FUND
FIDELITY CAPITAL & INCOME FUND seeks to provide a combination of
income and capital growth.
FMR invests the fund's assets in equity and debt securities. FMR
has the flexibility to invest the fund's assets in securities of any
type or quality, including defaulted securities, but expects to invest
the majority of the fund's assets in debt securities and convertible
securities, with an emphasis on lower-quality debt securities. Many
lower-quality debt securities are subject to legal or contractual
restrictions limiting FMR's ability to resell the securities to the
general public. FMR may invest in companies whose financial condition
is troubled or uncertain and that may be involved in bankruptcy
proceedings, reorganizations, or financial restructurings.
FMR may invest the fund's assets in securities of foreign issuers
in addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include a
security's structural features and current price compared to its
long-term value, and the earnings potential, credit standing, and
management of the security's issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates, or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
MONEY MARKET FUND
RETIREMENT MONEY MARKET PORTFOLIO seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
FMR invests the fund's assets in U.S. dollar-denominated money market
securities of domestic and foreign issuers and repurchase agreements.
FMR also may enter into reverse repurchase agreements for the fund.
FMR will invest more than 25% of the fund's total assets in the
financial services industry.
In buying and selling securities for the fund, FMR complies with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of the fund's investments. FMR
stresses maintaining a stable $1.00 share price, liquidity, and
income.
PRINCIPAL INVESTMENT RISKS
Many factors affect each Freedom Fund's performance. Each Freedom
Fund's share price and Freedom Income's yield change daily based on
the performance of the underlying Fidelity funds in which it invests.
The ability of each Freedom Fund to meet its investment objective is
directly related to its target asset allocation among underlying
Fidelity funds and the ability of those funds to meet their investment
objectives. When you sell your shares of a Freedom Fund, they could be
worth more or less than what you paid for them.
The following factors can significantly affect a Freedom Fund's
performance:
STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market, and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently from
small cap stocks, and "growth" stocks can react differently from
"value" stocks. Issuer, political, or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.
INTEREST RATE CHANGES. Debt and money market securities have varying
levels of sensitivity to changes in interest rates. In general, the
price of a debt or money market security can fall when interest rates
rise and can rise when interest rates fall. Securities with longer
maturities, mortgage securities, and the securities of issuers in the
financial services sector can be more sensitive to interest rate
changes. In other words, the longer the maturity of a security, the
greater the impact a change in interest rates could have on the
security's price. In addition, short-term and long-term interest rates
do not necessarily move in the same amount or the same direction.
Short-term securities tend to react to changes in short-term interest
rates, and long-term securities tend to react to changes in long-term
interest rates.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign
operations, and securities for which an entity located in a foreign
country provides credit support or a maturity-shortening structure can
involve additional risks relating to political, economic, or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial, and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently from the U.S. market.
Investing in emerging markets can involve risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of economic development;
political stability; market depth, infrastructure, and capitalization;
and regulatory oversight can be less than in more developed markets.
Emerging market economies can be subject to greater social, economic,
regulatory, and political uncertainties. All of these factors can make
emerging market securities more volatile and potentially less liquid
than securities issued in more developed markets.
GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.
ASIA. Asia includes countries in all stages of economic development,
from the highly developed economy of Japan to the emerging market
economy of the People's Republic of China. Most Asian economies are
characterized by over-extension of credit, currency devaluations and
restrictions, rising unemployment, high inflation, decreased exports,
and economic recessions. Currency devaluations in any one country can
have a significant effect on the entire region. Recently, the markets
in each Asian country have suffered significant downturns as well as
significant volatility. Increased political and social unrest in some
or all Asian countries could cause further economic and market
uncertainty.
The JAPANESE economy is currently in a recession. The economy is
characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The United States is Japan's
largest single trading partner, but close to half of Japan's trade is
conducted with developing nations, almost all of which are in
Southeast Asia.
The SOUTHEAST ASIA economies are generally in recessions. Many of
their economies are characterized by high inflation ,
undeveloped financial services sectors, and heavy reliance on
international trade. Currency devaluations or restrictions, political
and social instability, and general economic conditions have resulted
in significant market downturns and volatility. A small number of
companies and industries represent a large portion of the market in
many Southeast Asian countries.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union (EU), and many are also members of the EMU, which requires
compliance with restrictions on inflation rates, deficits, and debt
levels. Unemployment in Europe is historically high . Many
Eastern European countries continue to move toward market economies.
However, their markets remain relatively undeveloped and can be
particularly sensitive to political and economic developments. The
tight fiscal and monetary controls necessary to join the EMU can
significantly affect every country in Europe.
FINANCIAL SERVICES EXPOSURE. Financial services companies are highly
dependent on the supply of short-term financing. The value of
securities of issuers in the financial services sector can be
sensitive to changes in government regulation and interest rates and
to economic downturns in the United States and abroad.
PREPAYMENT. Many types of debt securities, including mortgage
securities, are subject to prepayment risk. Prepayment occurs when the
issuer of a security can repay principal prior to the security's
maturity. Securities subject to prepayment can offer less potential
for gains during a declining interest rate environment and similar or
greater potential for loss in a rising interest rate environment. In
addition, the potential impact of prepayment features on the price of
a debt security can be difficult to predict and result in greater
volatility.
ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. Entities providing credit support or
a maturity-shortening structure also can be affected by these types of
changes. If the structure of a security fails to function as intended,
the security could decline in value. The value of securities of
smaller, less well-known issuers can be more volatile than that of
larger issuers. Smaller issuers can have more limited product lines,
markets or financial resources. Lower-quality debt securities (those
of less than investment-grade quality) tend to be more sensitive to
these changes than higher-quality debt securities.
Lower-quality debt securities involve greater risk of default or price
changes due to changes in the credit quality of the issuer. The value
of lower-quality debt securities often fluctuates in response to
company, political, or economic developments and can decline
significantly over short periods of time or during periods of general
or regional economic difficulty. Lower-quality debt securities can be
thinly traded or have restrictions on resale, making them difficult to
sell at an acceptable price. The default rate for lower-quality debt
securities is likely to be higher during economic recessions or
periods of high interest rates.
"GROWTH" INVESTING. "Growth" stocks can react differently to issuer,
political, market, and economic developments than the market as a
whole and other types of stocks. "Growth" stocks tend to be more
expensive relative to their earnings or assets compared to other types
of stocks. As a result, "growth" stocks tend to be sensitive to
changes in their earnings and more volatile than other types of
stocks.
"VALUE" INVESTING. "Value" stocks can react differently to issuer,
political, market, and economic developments than the market as a
whole and other types of stocks. "Value" stocks tend to be inexpensive
relative to their earnings or assets compared to other types of
stocks. However, "value" stocks can continue to be inexpensive for
long periods of time and may not ever realize their full value.
QUANTITATIVE INVESTING. The value of securities selected using
quantitative analysis can react differently to issuer, political,
market, and economic developments than the market as a whole or
securities selected using only fundamental analysis. The factors used
in quantitative analysis and the weight placed on those factors may
not be predictive of a security's value. In addition, factors that
affect a security's value can change over time and these changes may
not be reflected in the quantitative model.
In response to market, economic, political, or other conditions,
Strategic Advisers may temporarily use a different investment strategy
for defensive purposes. If Strategic Advisers does so, different
factors could affect a Freedom Fund's performance and the fund may not
achieve its investment objective.
FUNDAMENTAL INVESTMENT POLICIES
The policies discussed below are fundamental, that is, subject to
change only by shareholder approval.
Each of FREEDOM 2000 FUND, FREEDOM 2010 FUND, FREEDOM 2020 FUND, AND
FREEDOM 2030 FUND seeks high total return.
FREEDOM INCOME FUND seeks high current income and, as a secondary
objective, capital appreciation.
VALUING SHARES
Each fund is open for business each day the New York Stock Exchange
(NYSE) is open.
Each fund's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time. However, NAV
may be calculated earlier if trading on the NYSE is restricted or as
permitted by the Securities and Exchange Commission (SEC). Each fund's
assets are valued as of this time for the purpose of computing the
fund's NAV.
To the extent that each fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of a fund's assets may not occur on days when the fund
is open for business.
The assets of each Freedom Fund consist primarily of shares of the
underlying Fidelity funds, which are valued at their respective NAVs.
Most underlying Fidelity fund assets are valued primarily on the basis
of market quotations or on the basis of information furnished by a
pricing service. Certain short-term securities are valued on the basis
of amortized cost. If market quotations or information furnished by a
pricing service is not available for a security held by an underlying
Fidelity fund or if the value of a security held by an underlying
Fidelity fund has been materially affected by events occurring after
the close of the exchange or market on which the security is
principally traded (for example, a foreign exchange or market), that
security may be valued by another method that the Board of Trustees
believes accurately reflects fair value. A security's valuation may
differ depending on the method used for determining value. A money
market underlying Fidelity fund's assets are valued on the basis of
amortized cost.
SHAREHOLDER INFORMATION
BUYING AND SELLING SHARES
GENERAL INFORMATION
Fidelity Investments(registered trademark) was established in 1946 to
manage one of America's first mutual funds. Today, Fidelity is the
largest mutual fund company in the country, and is known as an
innovative provider of high-quality financial services to individuals
and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-advantaged retirement plans for individuals investing on their own
or through their employer.
For account, product and service information, please use the following
w eb site and phone numbers:
(small solid bullet) For information over the Internet, visit
Fidelity's w eb site at www.fidelity.com.
(small solid bullet) For accessing account information automatically
by phone, use Fidelity Automated Service Telephone (FASTSM),
1-800-544-5555.
(small solid bullet) For exchanges, redemptions, and account
assistance, 1-800-544-6666.
(small solid bullet) For mutual fund and brokerage information,
1-800-544-6666.
(small solid bullet) For retirement information,
1-800-544-4774.
(small solid bullet) TDD - Service for the Deaf and Hearing-Impaired,
1-800-544-0118 (9:00 a.m. - 9:00 p.m. Eastern time).
Please use the following addresses:
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
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 75039- 5587
You may buy or sell shares of the funds through a retirement account
or an investment professional. If you invest through a retirement
account or an investment professional, the procedures for buying,
selling, and exchanging shares of a fund and the account features and
policies may differ. Additional fees may also apply to your investment
in a fund, including a transaction fee if you buy or sell shares of
the fund through a broker or other investment professional.
Certain methods of contacting Fidelity, such as by telephone or
electronically, may be unavailable or delayed (for example, during
periods of unusual market activity). In addition, the level and type
of service available may be restricted based on criteria established
by Fidelity.
The different ways to set up (register) your account with Fidelity are
listed in the following table.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS)
(solid bullet) ROTH IRAS
(solid bullet) ROLLOVER IRAS
(solid bullet) 401(K) PLANS AND CERTAIN OTHER 401(A)-QUALIFIED PLANS
(solid bullet) KEOGH PLANS
(solid bullet) SIMPLE IRAS
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS)
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS)
(solid bullet) 403(B) CUSTODIAL ACCOUNTS
(solid bullet) DEFERRED COMPENSATION PLANS (457 PLANS)
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
TRUST
FOR MONEY BEING INVESTED BY A TRUST
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS OR
OTHER GROUPS
BUYING SHARES
The price to buy one share of each fund is the fund's NAV. Each fund's
shares are sold without a sales charge.
Your shares will be bought at the next NAV calculated after your
investment is received in proper form.
Short-term or excessive trading into and out of a fund may harm
performance by disrupting portfolio management strategies and by
increasing expenses. Accordingly, a fund may reject any purchase
orders, including exchanges, particularly from market timers or
investors who, in FMR's opinion, have a pattern of short-term or
excessive trading or whose trading has been or may be disruptive to
that fund. For these purposes, FMR may consider an investor's trading
history in that fund or other Fidelity funds, and accounts under
common ownership or control.
Each fund may stop offering shares completely or may offer shares only
on a limited basis, for a period of time or permanently.
When you place an order to buy shares, note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Fidelity reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
Certain financial institutions that have entered into sales agreements
with Fidelity Distributors Corporation (FDC) may enter confirmed
purchase orders on behalf of customers by phone, with payment to
follow no later than the time when a fund is priced on the following
business day. If payment is not received by that time, the order will
be canceled and the financial institution could be held liable for
resulting fees or losses.
MINIMUMS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity retirement accountsA $500
TO ADD TO AN ACCOUNT $250
Through regular investment plans $100
MINIMUM BALANCE $2,000
For certain Fidelity retirement accountsA $500
A FIDELITY TRADITIONAL IRA, ROTH IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
There is no minimum account balance or initial or subsequent purchase
minimum for investments through Fidelity Portfolio Advisory Services
SM, certain Fidelity retirement accounts funded through salary
deduction, or accounts opened with the proceeds of distributions from
such retirement accounts. In addition, each fund may waive or lower
purchase minimums in other circumstances.
KEY INFORMATION
PHONE 1-800-544-6666 TO OPEN AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
Call the phone number at left.
(small solid bullet) Use
Fidelity Money
Line(registered trademark)
to transfer from your bank
account.
INTERNET WWW.FIDELITY.COM TO OPEN AN ACCOUNT
(small solid bullet) Complete
and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address
under "Mail" below.
TO ADD TO AN ACCOUNT
(small solid bullet) Exchange
from another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer from your bank
account.
MAIL FIDELITY INVESTMENTS TO OPEN AN ACCOUNT
P.O. BOX 770001 CINCINNATI, (small solid bullet) Complete
OH 45277-0002 and sign the application.
Make your check payable to
the complete name of the
fund. Mail to the address at
left.
TO ADD TO AN ACCOUNT
(small solid bullet) Make
your check payable to the
complete name of the fund.
Indicate your fund account
number on your check and
mail to the address at left.
(small solid bullet) Exchange
from another Fidelity fund.
Send a letter of instruction
to the address at left,
including your name, the
funds' names, the fund
account numbers, and the
dollar amount or number of
shares to be exchanged.
IN PERSON TO OPEN AN ACCOUNT
(small solid bullet) Bring
your application and check
to a Fidelity Investor
Center. Call 1-800-544-9797
for the center nearest you.
TO ADD TO AN ACCOUNT
(small solid bullet) Bring
your check to a Fidelity
Investor Center. Call
1-800-544-9797 for the
center nearest you.
WIRE TO OPEN AN ACCOUNT
(small solid bullet) Call
1-800-544-6666 to set up
your account and to arrange
a wire transaction.
(small solid bullet) Wire
within 24 hours to: Bankers
Trust Company, Bank Routing
# 021001033, Account #
00163053.
(small solid bullet) Specify
the complete name of the
fund and include your new
fund account number and your
name.
TO ADD TO AN ACCOUNT
(small solid bullet) Wire to:
Bankers Trust Company, Bank
Routing # 021001033, Account
# 00163053.
(small solid bullet) Specify
the complete name of the
fund and include your fund
account number and your name.
AUTOMATICALLY TO OPEN AN ACCOUNT
(small solid bullet) Not
available.
TO ADD TO AN ACCOUNT
(small solid bullet) Use
Fidelity Automatic Account
Builder(registered
trademark) or Direct Deposit.
(small solid bullet) Use
Fidelity Automatic Exchange
Service to exchange from a
Fidelity money market fund.
SELLING SHARES
The price to sell one share of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form.
Certain requests must include a signature guarantee. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to sell more than $100,000 worth of
shares;
(small solid bullet) Your account registration has changed within the
last 15 or 30 days, depending on your account ;
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address);
(small solid bullet) The check is being made payable to someone other
than the account owner; or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
When you place an order to sell shares, note the following:
(small solid bullet) If you are selling some but not all of your
shares, leave at least $2,000 worth of shares in the account to keep
it open ($500 for retirement accounts), except accounts not subject to
account minimums.
(small solid bullet) Normally, Fidelity will process redemptions by
the next business day, but Fidelity may take up to seven days to
process redemptions if making immediate payment would adversely affect
a fund.
(small solid bullet) Redemption proceeds (other than exchanges) may be
delayed until money from prior purchases sufficient to cover your
redemption has been received and collected. This can take up to seven
business days after a purchase.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) Redemption proceeds may be paid in securities or
other property rather than in cash if FMR determines it
is in the best interests of a fund.
(small solid bullet) You will not receive interest on amounts
represented by uncashed redemption checks.
(small solid bullet) Unless otherwise instructed, Fidelity will send a
check to the record address.
KEY INFORMATION
PHONE 1-800-544-6666 (small solid bullet) Call the
phone number at left to
initiate a wire transaction
or to request a check for
your redemption.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
(small solid bullet) Exchange
to another Fidelity fund.
Call the phone number at left.
INTERNET WWW.FIDELITY.COM (small solid bullet) Exchange
to another Fidelity fund.
(small solid bullet) Use
Fidelity Money Line to
transfer to your bank account.
MAIL FIDELITY INVESTMENTS INDIVIDUAL, JOINT TENANT,
P.O. BOX 660602 DALLAS, TX SOLE PROPRIETORSHIP, UGMA,
75266-0602 UTMA
(small solid bullet) Send a
letter of instruction to the
address at left, including
your name, the fund's name,
your fund account number,
and the dollar amount or
number of shares to be sold.
The letter of instruction
must be signed by all
persons required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Call
1-800-544-6666 to request one.
TRUST
(small solid bullet) Send a
letter of instruction to the
address at left, including
the trust's name, the fund's
name, the trust's fund
account number, and the
dollar amount or number of
shares to be sold. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Send a
letter of instruction to the
address at left, including
the firm's name, the fund's
name, the firm's fund
account number, and the
dollar amount or number of
shares to be sold. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Call
1-800-544-6666 for
instructions.
IN PERSON INDIVIDUAL, JOINT TENANT,
SOLE PROPRIETORSHIP, UGMA,
UTMA
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
letter of instruction must
be signed by all persons
required to sign for
transactions, exactly as
their names appear on the
account.
RETIREMENT ACCOUNT
(small solid bullet) The
account owner should
complete a retirement
distribution form. Visit a
Fidelity Investor Center to
request one. Call
1-800-544-9797 for the
center nearest you.
TRUST
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. The
trustee must sign the letter
of instruction indicating
capacity as trustee. If the
trustee's name is not in the
account registration,
provide a copy of the trust
document certified within
the last 60 days.
BUSINESS OR ORGANIZATION
(small solid bullet) Bring a
letter of instruction to a
Fidelity Investor Center.
Call 1-800-544-9797 for the
center nearest you. At least
one person authorized by
corporate resolution to act
on the account must sign the
letter of instruction.
(small solid bullet) Include
a corporate resolution with
corporate seal or a
signature guarantee.
EXECUTOR, ADMINISTRATOR,
CONSERVATOR, GUARDIAN
(small solid bullet) Visit a
Fidelity Investor Center for
instructions. Call
1-800-544-9797 for the
center nearest you.
AUTOMATICALLY (small solid bullet) Use
Personal Withdrawal Service
to set up periodic
redemptions from your account.
EXCHANGING SHARES
An exchange involves the redemption of all or a portion of the shares
of one fund and the purchase of shares of another fund.
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds including each of the
underlying Fidelity funds.
However, you should note the following policies and restrictions
governing exchanges:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may exchange only between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Each Freedom Fund may temporarily or permanently
terminate the exchange privilege of any investor who makes more than
four exchanges out of the fund per calendar year. Accounts under
common ownership or control will be counted together for purposes of
the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
held by certain institutional retirement plans to conform to plan
exchange limits and Department of Labor regulations. See your plan
materials for further information.
(small solid bullet) Each fund may refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable
to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
The funds may terminate or modify the exchange privileges in the
future.
Other funds may have different exchange restrictions, and may impose
trading fees of up to 3.00% of the amount exchanged. Check each fund's
prospectus for details.
ACCOUNT FEATURES AND POLICIES
FEATURES
The following features are available to buy and sell shares of the
funds.
AUTOMATIC INVESTMENT AND WITHDRAWAL PROGRAMS. Fidelity offers
convenient services that let you automatically transfer money into
your account, between accounts, or out of your account. While
automatic investment programs do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Automatic withdrawal or exchange
programs can be a convenient way to provide a consistent income flow
or to move money between your investments.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC ACCOUNT
BUILDER TO MOVE MONEY FROM
YOUR BANK ACCOUNT TO A
FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly or quarterly (small solid bullet) To set
up for a new account,
complete the appropriate
section on the fund
application.
(small solid bullet) To set
up for existing accounts,
call 1-800-544-6666 or visit
Fidelity's web site for an
application.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
investment date.
DIRECT DEPOSIT TO SEND ALL OR
A PORTION OF YOUR PAYCHECK
OR GOVERNMENT CHECK TO A
FIDELITY FUND.A
MINIMUM FREQUENCY PROCEDURES
$100 Every pay period (small solid bullet) To set
up for a new account, check
the appropriate box on the
fund application.
(small solid bullet) To set
up for an existing account,
call 1-800-544-6666 or visit
Fidelity's web site for an
authorization form.
(small solid bullet) To make
changes you will need a new
authorization form. Call
1-800-544-6666 or visit
Fidelity's web site to
obtain one.
A BECAUSE THEIR SHARE PRICES
FLUCTUATE, THESE FUNDS MAY
NOT BE APPROPRIATE CHOICES
FOR DIRECT DEPOSIT OF YOUR
ENTIRE CHECK.
FIDELITY AUTOMATIC EXCHANGE
SERVICE TO MOVE MONEY FROM A
FIDELITY MONEY MARKET FUND
TO ANOTHER FIDELITY FUND.
MINIMUM FREQUENCY PROCEDURES
$100 Monthly, bimonthly, (small solid bullet) To set
quarterly, or annually up, call 1-800-544-6666
after both accounts are
opened.
(small solid bullet) To make
changes, call 1-800-544-6666
at least three business days
prior to your next scheduled
exchange date.
</TABLE>
PERSONAL WITHDRAWAL SERVICE
TO SET UP PERIODIC
REDEMPTIONS FROM YOUR
ACCOUNT TO YOU OR TO YOUR
BANK ACCOUNT.
FREQUENCY PROCEDURES
Monthly (small solid bullet) To set
up, call 1-800-544-6666.
(small solid bullet) To make
changes, call Fidelity at
1-800-544-6666 at least
three business days prior to
your next scheduled
withdrawal date.
OTHER FEATURES. The following other features are also available to buy
and sell shares of the funds.
WIRE
TO PURCHASE AND SELL SHARES VIA THE FEDERAL RESERVE WIRE SYSTEM.
(small solid bullet) You must sign up for the w ire feature
before using it. Complete the appropriate section on the application
when opening your account, or call 1-800-544-6666 to add the feature
after your account is opened. Call 1-800-544-6666 before your first
use to verify that this feature is set up on your account.
(small solid bullet) To sell shares by wire, you must designate the
U.S. commercial bank account(s) into which you wish the redemption
proceeds deposited.
FIDELITY MONEY LINE
TO TRANSFER MONEY BETWEEN YOUR BANK ACCOUNT AND YOUR FUND ACCOUNT.
(small solid bullet) You must sign up for the Money Line feature
before using it. Complete the appropriate section on the application
and then call 1-800-544-6666 or visit Fidelity's w eb site
before your first use to verify that this feature is set up on your
account.
(small solid bullet) Most transfers are complete within three business
days of your call.
(small solid bullet) Minimum purchase: $100
(small solid bullet) Maximum purchase: $100,000
FIDELITY ON-LINE XPRESS+(registered trademark)
TO MANAGE YOUR INVESTMENTS THROUGH YOUR PC.
CALL 1-800-544-0240 OR VISIT FIDELITY'S W EB SITE FOR MORE
INFORMATION.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) For access to research and analysis tools.
FIDELITY ONLINE TRADING
TO ACCESS AND MANAGE YOUR ACCOUNT OVER THE INTERNET AT FIDELITY'S
W EB SITE.
(small solid bullet) For account balances and holdings;
(small solid bullet) To review recent account history;
(small solid bullet) To obtain quotes;
(small solid bullet) For mutual fund and brokerage trading; and
(small solid bullet) To access third-party research on companies,
stocks, mutual funds and the market.
FAST
TO ACCESS AND MANAGE YOUR ACCOUNT AUTOMATICALLY BY PHONE USING
TOUCH TONE OR SPEECH RECOGNITION.
CALL 1-800-544-5555.
(small solid bullet) For account balances and holdings;
(small solid bullet) For mutual fund and brokerage trading;
(small solid bullet) To obtain quotes;
(small solid bullet) To review orders and mutual fund activity; and
(small solid bullet) To change your personal identification number
(PIN).
POLICIES
The following policies apply to you as a shareholder.
COMBINATION WITH FREEDOM INCOME FUND. Each Freedom Fund with a target
retirement date may be combined with Freedom Income, without a vote of
shareholders, if the funds' Board of Trustees determines at the time
of the proposed combination that combining the funds is in the best
interests of the funds and their shareholders. Prior to a combination,
Fidelity will notify shareholders of a Freedom Fund with a target
retirement date of the combination and any tax consequences.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through
automatic investment or withdrawal programs).
(small solid bullet) Monthly or quarterly account statements
(detailing account balances and all transactions completed during the
prior month or quarter).
(small solid bullet) Financial reports (every six months).
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in a fund. Call Fidelity at 1-800-544-8544 if you
need additional copies of financial reports or prospectuses.
Electronic copies of most financial reports and prospectuses are
available at Fidelity's w eb site. To participate in Fidelity's
electronic delivery program, call Fidelity or visit Fidelity's
w eb site for more information.
You may initiate many TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to sell and
exchange by telephone, call Fidelity for instructions.
When you sign your ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
Fidelity may deduct an ANNUAL MAINTENANCE FEE of $12.00 from accounts
with a value of less than $2,500, subject to an annual maximum charge
of $24.00 per shareholder. It is expected that accounts will be valued
on the second Friday in November of each year. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to Fidelity, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will
not be deducted from Fidelity brokerage accounts, retirement accounts
(except non-prototype retirement accounts), accounts using regular
investment plans, or if total assets with Fidelity exceed $30,000.
Eligibility for the $30,000 waiver is determined by aggregating
accounts with Fidelity maintained by Fidelity Service Company, Inc. or
FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
If your ACCOUNT BALANCE falls below $2,000 (except accounts not
subject to account minimums), you will be given 30 days' notice to
reestablish the minimum balance. If you do not increase your balance,
Fidelity may close your account and send the proceeds to you. Your
shares will be sold at the NAV on the day your account is closed.
Fidelity may charge a FEE FOR CERTAIN SERVICES, such as providing
historical account documents.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Each Freedom Fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. Each Freedom Fund also realizes capital
gains from its investments, and distributes these gains (less any
losses) to shareholders as capital gain distributions.
Each Freedom Fund with a target retirement date normally pays
dividends and capital gain distributions in May and December.
Freedom Income normally pays dividends monthly and pays capital gain
distributions in May and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. The following options may be available for
each fund's distributions:
1. REINVESTMENT OPTION. Your dividends and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund. Your
dividends will be paid in cash.
3. CASH OPTION. Your dividends and capital gain distributions will be
paid in cash.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividends
will be automatically invested in shares of another identically
registered Fidelity fund. Your capital gain distributions will be
automatically invested in shares of another identically registered
Fidelity fund, automatically reinvested in additional shares of the
fund, or paid in cash.
Not all distribution options are available for every account. If the
option you prefer is not listed on your account application, or if you
want to change your current option, call Fidelity.
If you elect to receive distributions paid in cash by check and the
U.S. Postal Service does not deliver your checks, your distribution
option may be converted to the Reinvestment Option. You will not
receive interest on amounts represented by uncashed distribution
checks.
TAX CONSEQUENCES
As with any investment, your investment in a fund could have tax
consequences for you. If you are not investing through a
tax-advantaged retirement account, you should consider these tax
consequences.
TAXES ON DISTRIBUTIONS. Distributions you receive from each fund are
subject to federal income tax, and may also be subject to state or
local taxes.
For federal tax purposes, each fund's dividends and distributions of
short-term capital gains are taxable to you as ordinary income ,
while each fund's distributions of long-term capital gains are
taxable to you generally as capital gains.
If you buy shares when a fund has realized but not yet distributed
income or capital gains, you will be "buying a dividend" by paying the
full price for the shares and then receiving a portion of the price
back in the form of a taxable distribution.
Any taxable distributions you receive from a fund will normally be
taxable to you when you receive them, regardless of your distribution
option. If you elect to receive distributions in cash or to invest
distributions automatically in shares of another Fidelity fund, you
will receive certain December distributions in January, but those
distributions will be taxable as if you received them on December 31.
TAXES ON TRANSACTIONS. Your redemptions, including exchanges, may
result in a capital gain or loss for federal tax purposes. A capital
gain or loss on your investment in a fund generally is the
difference between the cost of your shares and the price you receive
when you sell them.
FUND SERVICES
FUND MANAGEMENT
Each fund is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.
Strategic Advisers, Inc. is each Freedom Fund's investment manager.
Fidelity Management & Research Company (FMR), an affiliate of
Strategic Advisers, is each underlying Fidelity fund's manager.
As of ______ , Strategic Advisers had approximately $ ____
[million/billion] in discretionary assets under management.
As of ______ , FMR had approximately $ _____
[million/billion] in discretionary assets under management.
As the manager, Strategic Advisers administers the asset allocation
program for each Freedom Fund.
As the manager for the underlying Fidelity funds, FMR is responsible
for choosing each fund's investments and handling their business
affairs. FMR is also responsible for handling the business affairs for
each Freedom Fund.
Ren Cheng is Vice President and co-manager of the Freedom Funds, which
he has managed since inception. He also manages structured investments
for Fidelity Management Trust Company. Mr. Cheng joined Fidelity as a
portfolio manager in 1994. Previously, he was a senior portfolio
manager for Putnam Investments from 1985 to 1994.
Scott Stewart is Vice President and co-manager of the Freedom Funds,
which he has managed since inception. He also is a Senior Vice
President and head of Fidelity's structured equity group. Mr.
Stewart joined Fidelity in 1987 as a portfolio manager.
From time to time a manager, analyst, or other Fidelity employee
may express views regarding a particular company, security, industry,
or market sector. The views expressed by any such person are the views
of only that individual as of the time expressed and do not
necessarily represent the views of Fidelity or any other person in the
Fidelity organization. Any such views are subject to change at any
time based upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on
as investment advice and, because investment decisions for a Fidelity
fund are based on numerous factors, may not be relied on as an
indication of trading intent on behalf of any Fidelity fund.
Fidelity investment personnel may invest in securities for their own
investment accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Each Freedom Fund pays a management fee to Strategic Advisers. The
management fee is calculated and paid to Strategic Advisers every
month.
Strategic Advisers is responsible for the payment of all other
expenses of each Freedom Fund with limited exceptions.
Each Freedom Fund's annual management fee rate is 0.10% of its average
net assets.
For the fiscal year ended March 31, 2000 , each Freedom Fund
paid a management fee of __% of the fund's average net assets, after
reimbursement.
Strategic Advisers pays FMR an administration fee for handling the
business affairs for each Freedom Fund.
Strategic Advisers may, from time to time, agree to reimburse the
funds for management fees above a specified limit. Strategic Advisers
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be discontinued by Strategic Advisers
at any time, can decrease a fund's expenses and boost its
performance.
[As of _______, approximately __% and __% of [Name of Fund]'s total
outstanding shares, respectively, were held by [FMR/FMR and [an] FMR
affiliate[s]/[an] FMR affiliate[s]].]
FUND DISTRIBUTION
Fidelity Distributors Corporation (FDC) distributes each fund's
shares.
Each Freedom Fund has adopted a Distribution and Service Plan pursuant
to Rule 12b-1 under the Investment Company Act of 1940 that recognizes
that Strategic Advisers or FMR may use its management or
administration fee revenues, respectively, as well as its past profits
or its resources from any other source, to pay FDC for expenses
incurred in connection with providing services intended to result in
the sale of Freedom Fund shares and/or shareholder support services.
Strategic Advisers or FMR, directly or through FDC, may pay
intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees of each Freedom Fund has authorized such payments.
To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.
Strategic Advisers and FMR may allocate brokerage transactions in a
manner that takes into account the sale of shares of a fund, provided
that the fund receives brokerage services and commission rates
comparable to those of other broker-dealers.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds or FDC. This prospectus and the related SAI do
not constitute an offer by the funds or by FDC to sell shares of the
funds to or to buy shares of the funds from any person to whom it is
unlawful to make such offer.
APPENDIX
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand
each fund's financial history for the period of the fund's operations.
Certain information reflects financial results for a single fund
share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the fund
(assuming reinvestment of all dividends and distributions). This
information has been audited by _________, independent accountants,
whose report, along with each fund's financial highlights and
financial statements, are included in the funds' annual report. A free
copy of the annual report is available upon request.
[Financial Highlights to be filed by subsequent amendment.]
You can obtain additional information about the funds. The funds' SAI
includes more detailed information about each fund and its
investments. The SAI is incorporated herein by reference (legally
forms a part of the prospectus). Each fund's annual and semi-annual
reports include a discussion of the fund's holdings and recent market
conditions and the fund's investment strategies that affected
performance.
For a free copy of any of these documents or to request other
information or ask questions about a fund, call Fidelity at
1-800-544-8544. In addition, you may visit Fidelity's w eb site
at www.fidelity.com for a free copy of a prospectus or an annual or
semi-annual report or to request other information.
The SAI, the funds' annual and semi-annual reports and other related
materials are available from the Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) Database on the SEC's Internet
w eb site (http://www.sec.gov). You can obtain copies of this
information , after paying a duplicating fee, by sending a
request by email to [email protected] or by writing the Public
Reference Section of the SEC, Washington, D.C. 20549- 0102 . You
can also review and copy information about the funds, including the
funds' SAI, at the SEC's Public Reference Room in Washington, D.C.
Call 1- 202-942-8090 for information on the operation of the
SEC's Public Reference Room.
INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-6440.
Fidelity Investments & (Pyramid) Design, Fidelity, Fidelity
Investments, Fidelity Money Line, Fidelity Automatic Account Builder,
Fidelity On-Line Xpress+, and Directed Dividends are registered
trademarks of FMR Corp.
Fidelity Freedom Funds, Fidelity Freedom Income Fund, Fidelity Freedom
2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund, and
Fidelity Freedom 2030 Fund are registered service marks of FMR Corp.
Strategic Advisers, FAST, and Fidelity Portfolio Advisory
Services are service marks of FMR Corp.
The third party marks appearing above are the marks of their
respective owners.
1.702545.102. FF-pro-0500
FIDELITY FREEDOM FUNDS(registered trademark)
FIDELITY FREEDOM INCOME FUND(registered trademark)
FIDELITY FREEDOM 2000 FUND(registered trademark)
FIDELITY FREEDOM 2010 FUND(registered trademark)
FIDELITY FREEDOM 2020 FUND(registered trademark)
FIDELITY FREEDOM 2030 FUND(registered trademark)
FUNDS OF FIDELITY ABERDEEN STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
MAY 27, 2000
This statement of additional information (SAI) is not a prospectus.
Portions of the funds' annual report are incorporated herein. The
annual report is supplied with this SAI.
To obtain a free additional copy of the prospectus, dated May 27,
200 0, or an annual report, please call Fidelity(registered
trademark) at 1-800-544-8544 or visit Fidelity's web site at
www.fidelity.com.
TABLE OF CONTENTS PAGE
Investment Policies and 30
Limitations
Special Considerations 18
Regarding Canada
Special Considerations 18
Regarding Europe
Special Considerations 20
Regarding Japan
Special Considerations 20
Regarding Asia Pacific
Region (ex Japan)
Special Considerations 20
Regarding Latin America
Special Considerations 21
Regarding Russia
Special Considerations 22
Regarding Africa
Portfolio Transactions 41
Valuation 45
Performance 46
Additional Purchase, Exchange 69
and Redemption Information
Distributions and Taxes 69
Trustees and Officers 70
Control of Investment Advisers 73
Management Contracts 73
Distribution Services 75
Transfer and Service Agent 76
Agreements
Description of the Trust 76
Financial Statements 77
Appendix 77
FF-ptb- 0500
1.475644. 102
(Fidelity logo graphic)(registered trademark)
82 Devonshire Street, Boston, MA 02109
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a Freedom Fund's assets
that may be invested in any security or other asset, or sets forth a
policy regarding quality standards, such standard or percentage
limitation will be determined immediately after and as a result of the
Freedom Fund's acquisition of such security or other asset.
Accordingly, any subsequent change in values, net assets, or other
circumstances will not be considered when determining whether the
investment complies with the Freedom Fund's investment policies and
limitations.
A Freedom Fund's fundamental investment policies and limitations
cannot be changed without approval by a "majority of the outstanding
voting securities" (as defined in the Investment Company Act of 1940
(the 1940 Act)) of the fund. However, except for the fundamental
investment limitations listed below, the investment policies and
limitations described in this SAI are not fundamental and may be
changed without shareholder approval.
THE FOLLOWING ARE THE FREEDOM FUNDS' FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. EACH FREEDOM FUND MAY NOT:
(1) With respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose
principal business activities are in the same industry (provided that
investments in other investment companies shall not be considered an
investment in any particular industry for purposes of this investment
limitation);
(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or
(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.
(9) Each fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) Each fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) Each fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.
(iii) Each fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(iv) Each fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(v) Each fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to
15% of the fund's net assets) to a registered investment
company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) acquiring loans, loan participations, or
other forms of direct debt instruments and, in connection therewith,
assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to
repurchase agreements.)
(vi) Each fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, each Freedom Fund were in a position
where more than 10% of its net assets were invested in illiquid
securities, it would consider appropriate steps to protect liquidity.
For the Freedom Funds' limitations on futures and options
transactions, see the section entitled "Limitations on Futures and
Options Transactions" on page 4.
Notwithstanding the foregoing investment limitations, the underlying
Fidelity funds in which the Freedom Funds may invest have adopted
certain investment limitations that may be more or less restrictive
than those listed above, thereby permitting a Freedom Fund to engage
indirectly in investment strategies that are prohibited under the
investment limitations listed above. The investment limitations of
each underlying Fidelity fund are set forth in its SAI.
In accordance with each Freedom Fund's investment program as set forth
in the prospectus, a Freedom Fund may invest more than 25% of its
assets in any one underlying Fidelity fund. However, each of the
underlying Fidelity funds in which a Freedom Fund may invest (other
than Fidelity Money Market Trust: Retirement Money Market Portfolio)
will not concentrate more than 25% of its total assets in any one
industry, except that Fidelity Money Market Trust: Retirement Money
Market Portfolio will invest more than 25% of its total assets in the
financial services industry.
INVESTMENT PRACTICES OF THE FREEDOM FUNDS
The following pages contain more detailed information about types of
instruments in which a Freedom Fund may invest, strategies Strategic
Advisers SM may employ in pursuit of a Freedom Fund's investment
objective, and a summary of related risks. Strategic Advisers may not
buy all of these instruments or use all of these techniques unless it
believes that doing so will help a Freedom Fund achieve its goal.
BORROWING. Each Freedom Fund may borrow from banks or from other funds
advised by FMR or its affiliates, or through reverse repurchase
agreements. If a fund borrows money, its share price may be subject to
greater fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. Also, the maturities of mortgage securities,
including collateralized mortgage obligations, and some asset-backed
securities are determined on a weighted average life basis, which is
the average time for principal to be repaid. For a mortgage security,
this average time is calculated by estimating the timing of principal
payments, including unscheduled prepayments, during the life of the
mortgage. The weighted average life of these securities is likely to
be substantially shorter than their stated final maturity.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Standard & Poor's 500 Index (S&P 500(registered
trademark)). Futures can be held until their delivery dates, or can be
closed out before then if a liquid secondary market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The funds intend to comply with Rule
4.5 under the Commodity Exchange Act, which limits the extent to which
the funds can commit assets to initial margin deposits and option
premiums.
In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI, may be changed as regulatory
agencies permit.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR, on behalf of Strategic Advisers, determines the liquidity of a
fund's investments and, through reports from FMR, the Board monitors
investments in illiquid securities. In determining the liquidity of a
fund's investments, FMR may consider various factors, including (1)
the frequency and volume of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, and (4) the nature of the security and
the market in which it trades (including any demand, put or tender
features, the mechanics and other requirements for transfer, any
letters of credit or other credit enhancement features, any ratings,
the number of holders, the method of soliciting offers, the time
required to dispose of the security, and the ability to assign or
offset the rights and obligations of the security).
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The Freedom Funds will engage in repurchase agreement
transactions with parties whose creditworthiness has been reviewed and
found satisfactory by FMR on behalf of Strategic Advisers.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The Freedom Funds will
enter into reverse repurchase agreements with parties whose
creditworthiness has been reviewed and found satisfactory by FMR on
behalf of Strategic Advisers. Such transactions may increase
fluctuations in the market value of fund assets and may be viewed as a
form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by Strategic
Advisers to be in good standing and when, in Strategic Advisers'
judgment, the income earned would justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SOURCES OF LIQUIDITY OR CREDIT SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. Strategic Advisers may rely on FMR's evaluation of the
credit of the liquidity or credit enhancement provider in determining
whether to purchase a security supported by such enhancement. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment. Changes in the credit quality of the entity providing the
enhancement could affect the value of the security or a fund's share
price.
TEMPORARY DEFENSIVE POLICIES. Each of the Freedom Funds reserves the
right to invest without limitation in Fidelity Money Market Trust:
Retirement Money Market Portfolio for temporary, defensive purposes.
INVESTMENT PRACTICES OF THE UNDERLYING FIDELITY FUNDS
The following pages contain more detailed information about types of
instruments in which an underlying Fidelity fund may invest,
strategies FMR may employ in pursuit of an underlying Fidelity fund's
investment objective, and a summary of related risks. FMR may not buy
all of these instruments or use all of these techniques unless it
believes that doing so will help an underlying Fidelity fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the SEC, the Board of Trustees has established and periodically
reviews procedures applicable to transactions involving affiliated
financial institutions.
ASSET-BACKED SECURITIES represent interests in pools of mortgages,
loans, receivables or other assets. Payment of interest and repayment
of principal may be largely dependent upon the cash flows generated by
the assets backing the securities and, in certain cases, supported by
letters of credit, surety bonds, or other credit enhancements.
Asset-backed security values may also be affected by other factors
including changes in interest rates, the availability of information
concerning the pool and its structure, the creditworthiness of the
servicing agent for the pool, the originator of the loans or
receivables, or the entities providing the credit enhancement. In
addition, these securities may be subject to prepayment risk.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.
CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.
CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity and diversification of their investments.
COMMON STOCK represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.
DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. Also, the maturities of mortgage securities,
including collateralized mortgage obligations, and some asset-backed
securities are determined on a weighted average life basis, which is
the average time for principal to be repaid. For a mortgage security,
this average time is calculated by estimating the timing of principal
payments, including unscheduled prepayments, during the life of the
mortgage. The weighted average life of these securities is likely to
be substantially shorter than their stated final maturity.
DOMESTIC AND FOREIGN INVESTMENTS (MONEY MARKET FUND ONLY) include U.S.
dollar-denominated time deposits, certificates of deposit, and
bankers' acceptances of U.S. banks and their branches located outside
of the United States, U.S. branches and agencies of foreign banks, and
foreign branches of foreign banks. Domestic and foreign investments
may also include U.S. dollar-denominated securities issued or
guaranteed by other U.S. or foreign issuers, including U.S. and
foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and
U.S. and foreign financial institutions, including savings and loan
institutions, insurance companies, mortgage bankers, and real estate
investment trusts, as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or
may be limited by the terms of a specific obligation and by
governmental regulation. Payment of interest and repayment of
principal on these obligations may also be affected by governmental
action in the country of domicile of the branch (generally referred to
as sovereign risk). In addition, evidence of ownership of portfolio
securities may be held outside of the United States and a fund may be
subject to the risks associated with the holding of such property
overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be
general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and by
federal and state regulation, as well as by governmental action in the
country in which the foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic
developments, withholding taxes, seizures of foreign deposits,
currency controls, interest limitations, or other governmental
restrictions that might affect repayment of principal or payment of
interest, or the ability to honor a credit commitment. Additionally,
there may be less public information available about foreign entities.
Foreign issuers may be subject to less governmental regulation and
supervision than U.S. issuers. Foreign issuers also generally are not
bound by uniform accounting, auditing, and financial reporting
requirements comparable to those applicable to U.S. issuers.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.
Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.
The risks of foreign investing may be magnified for investments in
emerging markets, which may have relatively unstable governments,
economies based on only a few industries, and securities markets that
trade a small number of securities.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.
Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.
Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.
American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A bond or equity fund may conduct
foreign currency transactions on a spot (i.e., cash) or forward basis
(i.e., by entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.
A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.
A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.
Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements involve
an agreement to purchase a foreign security and to sell that security
back to original seller at an agreed-upon price in either U.S. dollars
or foreign currency. Unlike typical U.S. repurchase agreements,
foreign repurchase agreements may not be fully collateralized at all
times. The value of a security purchased by a fund may be more or less
than the price at which the counterparty has agreed to repurchase the
security. In the event of default by the counterparty, the fund may
suffer a loss if the value of the security purchased is less than the
agreed-upon repurchase price, or if the fund is unable to successfully
assert a claim to the collateral under foreign laws. As a result,
foreign repurchase agreements may involve higher credit risks than
repurchase agreements in U.S. markets, as well as risks associated
with currency fluctuations. In addition, as with other emerging market
investments, repurchase agreements with counterparties located in
emerging markets or relating to emerging markets may involve issuers
or counterparties with lower credit ratings than typical U.S.
repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.
COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the S&P 500. Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is
available.
Futures may be based on foreign indexes such as the CAC 40 (France),
DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.
Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each bond and equity
fund has filed a notice of eligibility for exclusion from the
definition of the term "commodity pool operator" with the Commodity
Futures Trading Commission (CFTC) and the National Futures
Association, which regulate trading in the futures markets. The funds
intend to comply with Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the funds can commit assets to initial
margin deposits and option premiums.
In addition, each equity fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets under normal conditions;
or (c) purchase call options if, as a result, the current value of
option premiums for call options purchased by the fund would exceed 5%
of the fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
In addition, each bond fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
Fidelity Government Income Fund further limits its options and futures
investments to options and futures contracts relating to U.S.
Government securities.
The above limitations on the bond and equity funds' investments in
futures contracts and options, and the funds' policies regarding
futures contracts and options discussed elsewhere in this SAI, may be
changed as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.
The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the purchaser or writer greater flexibility
to tailor an option to its needs, OTC options generally involve
greater credit risk than exchange-traded options, which are guaranteed
by the clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.
ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).
INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.
Mortgage-indexed securities, for example, could be structured to
replicate the performance of mortgage securities and the
characteristics of direct ownership.
Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.
ISSUER LOCATION. FMR determines where an issuer or its principal
activities are located by looking at such factors as the issuer's
country of organization, the primary trading market for the issuer's
securities, and the location of the issuer's assets, personnel, sales,
and earnings. The issuer of a security is considered to be located in
a particular country if (1) the security is issued or guaranteed by
the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary
trading market in that country; or (3) the issuer is organized under
the laws of that country, derives at least 50% of its revenues or
profits from goods sold, investments made, or services performed in
the country, or has at least 50% of its assets located in the country.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.
Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.
Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.
A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.
Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.
The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.
Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.
MONEY MARKET SECURITIES are high-quality, short-term obligations.
Money market securities may be structured to be, or may employ a trust
or other form so that they are, eligible investments for money market
funds. For example, put features can be used to modify the maturity of
a security or interest rate adjustment features can be used to enhance
price stability. If a structure fails to function as intended, adverse
tax or investment consequences may result. Neither the Internal
Revenue Service (IRS) nor any other regulatory authority has ruled
definitively on certain legal issues presented by certain structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by the fund.
MORTGAGE SECURITIES are issued by government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage security is an obligation of the issuer backed by a mortgage
or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage securities, such as collateralized mortgage
obligations (or "CMOs"), make payments of both principal and interest
at a range of specified intervals; others make semiannual interest
payments at a predetermined rate and repay principal at maturity (like
a typical bond). Mortgage securities are based on different types of
mortgages, including those on commercial real estate or residential
properties. Stripped mortgage securities are created when the interest
and principal components of a mortgage security are separated and sold
as individual securities. In the case of a stripped mortgage security,
the holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage, while the holder
of the "interest-only" security (IO) receives interest payments from
the same underlying mortgage.
Fannie Maes and Freddie Macs are pass-through securities issued by
Fannie Mae and Freddie Mac, respectively. Fannie Mae and Freddie Mac,
which guarantee payment of interest and repayment of principal on
Fannie Maes and Freddie Macs, respectively, are federally chartered
corporations supervised by the U.S. Government that act as
governmental instrumentalities under authority granted by Congress.
Fannie Mae is authorized to borrow from the U.S. Treasury to meet its
obligations. Fannie Maes and Freddie Macs are not backed by the full
faith and credit of the U.S. Government.
The value of mortgage securities may change due to shifts in the
market's perception of issuers and changes in interest rates. In
addition, regulatory or tax changes may adversely affect the mortgage
securities market as a whole. Non-government mortgage securities may
offer higher yields than those issued by government entities, but also
may be subject to greater price changes than government issues.
Mortgage securities are subject to prepayment risk, which is the risk
that early principal payments made on the underlying mortgages,
usually in response to a reduction in interest rates, will result in
the return of principal to the investor, causing it to be invested
subsequently at a lower current interest rate. Alternatively, in a
rising interest rate environment, mortgage security values may be
adversely affected when prepayments on underlying mortgages do not
occur as anticipated, resulting in the extension of the security's
effective maturity and the related increase in interest rate
sensitivity of a longer-term instrument. The prices of stripped
mortgage securities tend to be more volatile in response to changes in
interest rates than those of non-stripped mortgage securities.
In order to earn additional income for a fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases costs and may increase taxable gains.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be issued in anticipation of future revenues and may be
backed by the full taxing power of a municipality, the revenues from a
specific project, or the credit of a private organization. The value
of some or all municipal securities may be affected by uncertainties
in the municipal market related to legislation or litigation involving
the taxation of municipal securities or the rights of municipal
securities holders. A municipal security may be owned directly or
through a participation interest.
PREFERRED STOCK is a class of equity or ownership in an issuer that
pays dividends at a specified rate and that has precedence over common
stock in the payment of dividends. In the event an issuer is
liquidated or declares bankruptcy, the claims of owners of bonds take
precedence over the claims of those who own preferred and common
stock.
PUT FEATURES entitle the holder to sell a security back to the issuer
or a third party at any time or at specified intervals. In exchange
for this benefit, a fund may accept a lower interest rate. Securities
with put features are subject to the risk that the put provider is
unable to honor the put feature (purchase the security). Put providers
often support their ability to buy securities on demand by obtaining
letters of credit or other guarantees from other entities. Demand
features, standby commitments, and tender options are types of put
features.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.
REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and a fund's
yield and may be viewed as a form of leverage.
SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.
The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
and a subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgement, the income earned would
justify the risks.
Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.
SHORT SALES "AGAINST THE BOX" (GROWTH AND MONEY MARKET FUNDS) are
short sales of securities that a fund owns or has the right to obtain
(equivalent in kind or amount to the securities sold short). If a fund
enters into a short sale against the box, it will be required to set
aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities)
and will be required to hold such securities while the short sale is
outstanding.
Short sales against the box could be used to protect the net asset
value per share (NAV) of a money market fund in anticipation of
increased interest rates, without sacrificing the current yield of the
securities sold short. A money market fund will incur transaction
costs in connection with opening and closing short sales against the
box. An equity fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short
sales against the box.
SHORT SALES (GROWTH & INCOME AND HIGH YIELD FUNDS). Stocks underlying
a fund's convertible security holdings can be sold short. For example,
if FMR anticipates a decline in the price of the stock underlying a
convertible security held by a fund, it may sell the stock short. If
the stock price subsequently declines, the proceeds of the short sale
could be expected to offset all or a portion of the effect of the
stock's decline on the value of the convertible security. Each fund
currently intends to hedge no more than 15% of its total assets with
short sales on equity securities underlying its convertible security
holdings under normal circumstances.
A fund will be required to set aside securities equivalent in kind and
amount to those sold short (or securities convertible or exchangeable
into such securities) and will be required to hold them aside while
the short sale is outstanding. A fund will incur transaction costs,
including interest expenses, in connection with opening, maintaining,
and closing short sales.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. Issuers may employ various
forms of credit and liquidity enhancements, including letters of
credit, guarantees, puts, and demand features, and insurance provided
by domestic or foreign entities such as banks and other financial
institutions. FMR may rely on its evaluation of the credit of the
credit or liquidity enhancement provider in determining whether to
purchase a security supported by such enhancement. In evaluating the
credit of a foreign bank or other foreign entities, FMR will consider
whether adequate public information about the entity is available and
whether the entity may be subject to unfavorable political or economic
developments, currency controls, or other government restrictions that
might affect its ability to honor its commitment. Changes in the
credit quality of the entity providing the enhancement could affect
the value of the security or a fund's share price.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other debt securities, although stripped
securities may be more volatile, and the value of certain types of
stripped securities may move in the same direction as interest rates.
U.S. Treasury securities that have been stripped by a Federal Reserve
Bank are obligations issued by the U.S. Treasury.
Privately stripped government securities are created when a dealer
deposits a U.S. Treasury security or other U.S. Government security
with a custodian for safekeeping. The custodian issues separate
receipts for the coupon payments and the principal payment, which the
dealer then sells.
Because the SEC does not consider privately stripped government
securities to be U.S. Government securities for purposes of Rule 2a-7,
a fund must evaluate them as it would non-government securities
pursuant to regulatory guidelines applicable to money market funds.
SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price and yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.
TEMPORARY DEFENSIVE POLICIES. Each of Fidelity Blue Chip Growth Fund,
Fidelity Disciplined Equity Fund, Fidelity Equity-Income Fund,
Fidelity Fund, Fidelity Growth & Income Portfolio, Fidelity Growth
Company Fund, Fidelity OTC Portfolio, Fidelity Diversified
International Fund, Fidelity Europe Fund, Fidelity Japan Fund,
Fidelity Overseas Fund, and Fidelity Southeast Asia Fund reserves the
right to invest without limitation in preferred stocks and
investment-grade debt instruments for temporary, defensive purposes.
Each of Fidelity Government Income Fund, Fidelity Intermediate Bond
Fund, and Fidelity Investment Grade Bond Fund reserves the right to
invest without limitation in investment-grade money market or
short-term debt instruments for temporary, defensive purposes.
Fidelity Capital & Income Fund reserves the right to invest without
limitation in investment-grade securities for temporary, defensive
purposes.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
in the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities are structured with put features
that permit holders to demand payment of the unpaid principal balance
plus accrued interest from the issuers or certain financial
intermediaries.
WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS involve a
commitment to purchase or sell specific securities at a predetermined
price or yield in which payment and delivery take place after the
customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities pursuant to one of these transactions, the
purchaser assumes the rights and risks of ownership, including the
risks of price and yield fluctuations and the risk that the security
will not be issued as anticipated. Because payment for the securities
is not required until the delivery date, these risks are in addition
to the risks associated with a fund's investments. If a fund remains
substantially fully invested at a time when a purchase is outstanding,
the purchases may result in a form of leverage. When a fund has sold a
security pursuant to one of these transactions, the fund does not
participate in further gains or losses with respect to the security.
If the other party to a delayed-delivery transaction fails to deliver
or pay for the securities, a fund could miss a favorable price or
yield opportunity or suffer a loss.
A fund may renegotiate a when-issued or forward transaction and may
sell the underlying securities before delivery, which may result in
capital gains or losses for the fund.
ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.
The following pages contain detailed information about special
considerations of underlying international Fidelity funds, in which
certain Freedom Funds may invest.
SPECIAL CONSIDERATIONS REGARDING CANADA
POLITICAL. Canada's parliamentary system of government is, in
general, stable. However, from time to time, some provinces, but
particularly Quebec, have called for a revamping of the legal and
financial relationship between the federal government in Ottawa and
the provinces. To date, referendums on Quebec sovereignty have been
defeated, but the issue remains unresolved. The Supreme Court of
Canada decided in August 1998 that if there was a "clear answer" to a
"clear question" in a referendum, then the federal government would be
obliged to negotiate with Quebec.
ECONOMIC. Canada is a major producer of commodities such as forest
products, metals, agricultural products, and energy related products
like oil, gas, and hydroelectricity. Accordingly, changes in the
supply and demand of industrial and basic materials, both domestically
and internationally, can have a significant effect on Canadian market
performance.
In addition, Canada relies considerably on the health of the United
States' economy, its biggest trading partner and largest foreign
investor. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities market increasingly sensitive to U.S. economic and market
events.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. Since Canada let its currency float in 1970, its
value has been in a steady decline against the U.S. dollar. While the
decline has helped Canada stay competitive in export markets, U.S.
investors have seen their investment returns eroded by the impact of
currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
On January 1, 1999, eleven of the fifteen member countries of the
European Union (EU) fixed their currencies irrevocably to the euro,
the new unit of currency of the European Economic and Monetary Union
(EMU). At that time each member's currency was converted at a fixed
rate to the euro. Initially, use of the euro will be confined mainly
to the wholesale financial markets, while its widespread use in the
retail sector will follow the circulation of euro banknotes and coins
on January 1, 2002. At that time, the national banknotes and coins of
participating member countries will cease to be legal tender. In
addition to adopting a single currency, member countries will no
longer control their own monetary policies. Instead, the authority to
direct monetary policy will be exercised by the new European Central
Bank.
While economic and monetary convergence in the European Union may
offer new opportunities for those investing in the region, investors
should be aware that the success of the union is not wholly assured.
Europe must grapple with a number of challenges, any one of which
could threaten the survival of this monumental undertaking. Eleven
disparate economies must adjust to a unified monetary system, the
absence of exchange rate flexibility, and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized, and its cultures differ widely. Unemployment is
historically high and could pose political risk. One or more member
countries might exit the union, placing the currency and banking
system in jeopardy.
POLITICAL. For those countries in Western and Eastern Europe that
were not included in the first round of the EU implementation, the
prospects for eventual membership serve as a strong political impetus
for many governments to employ tight fiscal and monetary policies.
Particularly for the Eastern European countries, aspirations to join
the EU are likely to push governments to act decisively.
At the same time, there could become an increasingly widening gap
between rich and poor within the aspiring countries, those countries
who are close to meeting membership criteria, and those who are not
likely to join the EMU. Realigning traditional alliances could alter
trading relationships and potentially provoke divisive socioeconomic
splits. Despite relative calm in Western Europe in recent years, the
risk of regional conflict or targeted terrorist activity could disrupt
European markets.
In the transition to the single economic system, significant
political decisions will be made which will effect the market
regulation, subsidization, and privatization across all industries,
from agricultural products to telecommunications.
ECONOMIC. As economic conditions across member states vary from
robust to dismal, there is continued concern about national-level
support for the currency and the accompanying coordination of fiscal
and wage policy among the eleven EMU member nations. According to the
Maastrich treaty, member countries must maintain inflation below 3.3%,
public debt below 60% of GDP, and a deficit of 3% or less of GDP to
qualify for participation in the euro. These requirements severely
limit member countries' ability to implement monetary policy to
address regional economic conditions. Countries that did not qualify
for the euro, such as Greece, risk being left farther behind.
FOREIGN TRADE. The EU has recently been involved in a number of
trade disputes with major trading partners, including the United
States. Tariffs and embargoes have been levied upon imports of
agricultural products and meat that have resulted in the affected
nation levying retaliatory tariffs upon imports from Europe. These
disputes can adversely affect the valuations of the European companies
that export the targeted products.
CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. However, investing in euro-denominated securities
entails risk of being exposed to a new currency that may not fully
reflect the strengths and weaknesses of the disparate economies that
make up the Union. This has been the case in the first six months of
1999, when the initial exchange rates of the euro versus many of the
world's major currencies steadily declined. In this environment, U.S.
and other foreign investors experienced erosion of their investment
returns in the region. In addition, many European countries rely
heavily upon export dependent businesses and any strength in the
exchange rate between the euro and the dollar can have either a
positive or a negative effect upon corporate profits.
GERMANY. The German economy is heavily industrialized, with
a strong emphasis on manufacturing and exports. Therefore, Germany's
economic growth is heavily dependent on the prosperity of its trading
partners and on currency exchange rates. Germany is closely tied to a
number of Eastern European emerging market economies and weakness in
these economies will likely dampen demand for German exports. Germany
continues to struggle with its incorporation of former East Germany
and the country as a whole faces high labor costs and high
unemployment.
FRANCE. In recent years, the country's economic growth has
been hit by a series of general strikes. France's strong labor unions
reacted negatively to government cuts driven by the country's effort
to meet EMU membership criteria. Recently, unions have demanded a
lower retirement age and a shorter work week. Economic growth also is
limited by the country's pay-as-you-go pension system; spending on
pensions accounts for about 10% of GDP.
NORDIC COUNTRIES. Faced with stronger global competition,
the Nordic countries-Norway, Finland, Denmark, and Sweden- have had to
scale down their historically generous welfare programs, resulting in
drops in domestic demand and increased unemployment. Major industries
in the region, such as forestry, agriculture, and oil, are heavily
resource dependent and face pressure as a result of high labor costs.
Pension reform, union regulation, and further cuts in liberal social
programs will likely need to be addressed as the Nordic countries face
increased international competition.
UNITED KINGDOM. The United Kingdom continues to be overtly
less enthusiastic about EMU than other countries in Europe and has not
committed itself to joining the euro. While the UK views independence
from the EMU as a competitive advantage, the country may not benefit
from its independence if economic conditions on the continent improve.
If the continental European stock markets make more compelling
prospects for economic growth, there is concern that the UK market may
lag its European counterparts.
EASTERN EUROPE. Investing in the securities of Eastern European
issuers is highly speculative and involves risks not usually
associated wi th investing in the more developed markets of Western
Europe.
The econo mies of the Eastern European nations are embarking on the
transition from communism at different paces with appropriately
different characteristics. Most Eastern European markets suffer from
thin trading activity, dubious investor protections, and often, a
dearth of reliable corporate information. Information and transaction
costs, differential taxes, and sometimes political or transfer risk
give a comparative advantage to the domestic investor rather than the
foreign investor. In addition, these markets are particularly
sensitive to political, economic, and currency events in Russia and
have recently suffered heavy losses as a result of their trading and
investment links to the troubled Russian economy and currency.
SPECIAL CONSIDERATIONS REGARDING JAPAN
Fueled by public investment, protectionist trade policies, and
innovative management styles, the Japanese economy has transformed
itself since World War II into the world's second largest economy.
Despite its impressive history, investors face special risks when
investing in Japan.
ECONOMIC. Since Japan's bubble economy collapsed eight years
ago, the nation has drifted between modest growth and recession. By
mid-year 1998, the world's second largest economy had slipped into its
deepest recession since World War II. Much of the blame can be placed
on government inaction in implementing long-neglected structural
reforms despite strong and persistent prodding from the International
Monetary Fund and the G7 member nations. Steps have been taken to
deregulate and liberalize protected areas of the economy, but the pace
of change has been disappointedly slow.
The most pressing need for action is the daunting task of
overhauling the nation's financial institutions and securing public
support for taxpayer-funded bailouts. Banks, in particular, must
dispose of their huge overhang of bad loans and trim their balance
sheets in preparation for greater competition from foreign
institutions as more areas of the financial sector are opened.
Successful financial sector reform would allow Japan's financial
institutions to act as a catalyst for economic recovery at home and
across the troubled Asian region.
FOREIGN TRADE. Much of Japan's economy is dependent upon
international trade. The country is a leading exporter of automobiles
and industrial machinery as well as industrial and consumer
electronics. While the United States is Japan's largest single trading
partner, close to half of Japan's trade is conducted with developing
nations, almost all of which are in Southeast Asia. For the past two
years, Southeast Asia's economies have been mired in economic
stagnation causing a steep decline in Japan's exports to the area.
Much of Japan's hopes for economic recovery and renewed export growth
is largely dependent upon the pace of economic recovery in Southeast
Asia.
NATURAL RESOURCE DEPENDENCY. An island nation with limited
natural resources, Japan is also heavily dependent upon imports of
essential products such as oil, forest products, and industrial
metals. Accordingly, Japan's industrial sector and domestic economy
are highly sensitive to fluctuations in international commodity
prices. In addition, many of these commodities are traded in U.S.
dollars and any strength in the exchange rate between the yen and the
dollar can have either a positive or a negative effect upon corporate
profit s.
NATURAL DISASTER S. The Japanese islands have been subjected
to periodic natural disasters including earthquakes, monsoons, and
tidal waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industries.
SPECIAL CONSIDERATIONS REGARDING ASIA PACIFIC REGION (EX JAPAN)
Many countries in the region have historically faced political
uncertainty, corruption, military intervention, and social unrest.
Examples include the ethnic, sectarian, and separatist violence found
in Indonesia, and the nuclear arms threats between India and Pakistan.
To the extent that such events continue in the future, they can be
expected to have a negative effect on economic and securities market
conditions in the region.
ECONOMIC. The economic health of the region depends, in
great part, on each country's respective ability to carry out fiscal
and monetary reforms and its ability to address the International
Monetary Fund's mandated benchmarks. The majority of the countries in
the region can be characterized as either developing or newly
industrialized economies, which tend to experience more volatile
economic cycles than developed countries. In addition, a number of
countries in the region have historically faced hyperinflation, a
deterrent to productivity and economic growth .
CURRENCY . For U.S. investors, investing in any currency
entails an additional risk that is not faced when investing in the
domestic market. Some countries in the region may impose restrictions
on converting local currency, effectively preventing foreigners from
selling assets and repatriating funds. While flexible exchange rates
through most of the region should allow greater control of domestic
liquidity conditions, the region's currencies generally face
above-average volatility with potentially negative implications for
economic and security market conditions.
NATURAL DISASTERS. The Asia Pacific region has been
subjected to periodic natural disasters such as earthquakes, monsoons,
and tidal waves. These events have often inflicted substantial
economic disruption upon the nation's populace and industry of the
countries in that region.
CHINA AND HONG KONG. As with all transition economies,
China's ability to develop and sustain a credible legal, regulatory,
monetary, and socioeconomic system could influence the course of
outside investment. Hong Kong is closely tied to China, economically
and through China's 1997 acquisition of the country as a Special
Autonomous Region (SAR). Hong Kong's success depends, in large part,
on its ability to retain the legal, financial and monetary systems
that allow economic freedom and market expansion.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
As an emerging market, Latin America has long suffered from
political, economic, and social instability. For investors, this has
meant additional risk caused by periods of regional conflict,
political corruption, totalitarianism, protectionist measures,
nationalization, hyperinflation, debt crises, and currency
devaluation. However, much has changed in the past decade. Democracy
is beginning to become well established in some countries. A move to a
more mature and accountable political environment is well under way.
Domestic economies have been deregulated and have enjoyed sound levels
of growth. Privatization of state-owned companies is almost completed.
Foreign trade restrictions have been relaxed. Large fiscal deficits
have been reduced and inflation controlled. Nonetheless, the volatile
stock markets of 1998 have clearly demonstrated that investors in the
region continue to face a number of potential risks.
POLITICAL. While investors recently have benefited from
friendlier forms of government, the Latin American political climate
is still vulnerable to sudden changes. Many countries in the region
have been in recession and have faced high unemployment. Corruption
remains part of the political landscape. This could lead to social
unrest and changes in governments that are less favorable to
investors. The investor friendly trends of social, economic, and
market reforms seen over the past several years could be reversed.
Also, as has historically been the case, the stock markets may be
subject to increased volatility as some countries approach elections:
Argentina, Chile, Mexico, and Peru.
SOCIAL UNREST. Latin America continues to suffer from one of
the most inequitable distributions of wealth in the world, as well as
rampant delinquency and street crime. The recent reforms and the move
to democracy, which were initially welcomed by the population, so far
have failed to significantly improve the living conditions of the
majority of people. This could lead to social unrest, occasional labor
strikes, rebellion, or civil war.
ECONOMIC. Many countries in the region have experienced
periods of hyperinflation which adversely impacted and may continue to
impact their economies and local stock markets. Despite signs that
inflation has been tamed, the risk of hyperinflation persists.
FOREIGN TRADE. One key to the recent economic growth in the
region has been the reduction of trade barriers and a series of
free-trade agreements. These are currently under pressure given the
recent macro-economic imbalances between many trading partners. One
example would be Mercosur, which includes Argentina, Brazil, Uruguay,
and Paraguay. As long as the economies perform well and the regimes
maintain similar economic and currency policies, all will benefit from
this agreement. However, the recent devaluation of Brazil's currency,
combined with recessions in the region, has created tension between
the largest trading partners, Brazil and Argentina. This could
threaten the pace of vital trade integration and regional economic
stability.
CURRENCY. For U.S. investors, investing in any foreign
market entails the risk of currency fluctuations; any weakness in the
local currency could erode the investment returns to U.S. investors
upon currency conversion. As is typical of emerging markets, Latin
America has a long history of currency devaluation, evidenced by the
Mexican peso crisis and the more recent Brazilian devaluation. The
region remains exposed to currency speculators, particularly if the
economic or political conditions worsen. Countries where the currency
is artificially pegged to the dollar are most at risk. For example,
predatory speculation may shift to Argentina if the cost of
maintaining the currency board reaches an unsustainable level given
the negative impact of the Brazilian devaluation, the economic
recession, the deterioration of the foreign trade balances, and the
mounting fiscal deficit.
SOVEREIGN DEBT. Although austerity programs in many
countries have significantly reduced fiscal deficits, the region is
still facing significant debt. Interest on the debt is subject to
market conditions and may reach levels that would impair economic
activity and create a difficult and costly environment for borrowers.
In addition, governments may be forced to reschedule or freeze their
debt repayment, which could negatively impact the stock market.
NATURAL RESOURCES DEPENDENCY. Commodities such as
agricultural products, minerals, and metals account for a significant
percentage of exports of many Latin American countries. As a result,
these economies have been particularly sensitive to the fluctuation of
commodity prices. As an example, Chile has been affected by the change
in the prices of copper and pulp, which has adversely affected its
economy and stock market. Similarly, because the U.S. is Mexico's
largest trading partner - accounting for more than four-fifths of its
exports - any economic downturn in the U.S. economy could adversely
impact the Mexican economy and stock market.
NATURAL DISASTERS. The region has been subjected to periodic
natural disasters, such as earthquakes and floods. These events have
often inflicted substantial damage upon the populations and the
economy. More recently, weather disorders attributed to the "El Nino"
effect have placed a serious drag on the economy of some countries,
such as Peru and Ecuador.
FINANCIAL REPORTING STANDARDS. As is typical of many
emerging markets, many companies in the region are still controlled by
families and their associates. Accordingly, these owners may not
always act in the best interests of public shareholders. In addition,
rules for disclosing financial information are less stringent, which
increases the difficulty of accessing reliable and viable
information.
SPECIAL CONSIDERATIONS REGARDING RUSSIA
Investing in Russian securities is highly speculative and involves
greater risks than generally encountered when investing in the
securities markets of the U.S. and most other developed countries.
Over the past century, Russia has experienced political and economic
turbulence and has endured decades of communist rule under which tens
of millions of its citizens were collectivized into state agricultural
and industrial enterprises. For most of the past decade, Russia's
government has been faced with the daunting task of stabilizing its
domestic economy, while transforming it into a modern and efficient
structure able to compete in international markets and respond to the
needs of its citizens. However, to date, many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other economic assistance have been squandered or stolen. In this
environment, there is always the risk that the nation's government
will abandon the current program of economic reform and replace it
with radically different political and economic policies that would be
detrimental to the interests of foreign investors. This could entail a
return to a centrally planned economy and nationalization of private
enterprises similar to what existed under the old Soviet Union. As
recently as 1998, the government imposed a moratorium on the repayment
of its international debt and the restructuring of the repayment
terms.
Foreign investors also face a high degree of currency risk when
investing in Russian securities. In a surprise move in August 1998,
Russia devalued the ruble, defaulted on short-term domestic bonds, and
declared a moratorium on commercial debt payments. In light of these
and other recent government actions, foreign investors face the
possibility of further devaluations. In addition, there is the risk
the government may impose capital controls on foreign portfolio
investments in the event of extreme financial or political crisis.
Such capital controls would prevent the sale of a portfolio of foreign
assets and the repatriation of proceeds.
Many of Russia's businesses have failed to mobilize the available
factors of production because the country's privatization program
virtually ensured the predominance of the old management teams that
are largely non-market-oriented in their management approach. A
combination of poor accounting standards, inept management, endemic
corruption, and limited shareholder rights pose a significant risk,
particularly to foreign investors.
Compared to most national stock markets, the Russian securities
market suffers from a variety of problems not encountered in more
developed markets. Among these are thin trading activity, inadequate
regulatory protection for the rights of investors, and lax custody
procedures. Additionally, there is a dearth of solid corporate
information available to investors.
The Russian economy is heavily dependent upon the export of a range
of commodities including most industrial metals, forestry products,
oil, and gas. Accordingly, it is strongly affected by international
commodity prices and is particularly vulnerable to any weakening in
global demand for these products.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of
over 50 countries and 840 million people. Civil wars, coups, and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, the continent is home to an abundance of natural
resources, including natural gas, aluminum, crude oil, copper, iron,
bauxite, cotton, diamonds, and timber. Wealthier African countries
generally have strong connections to European partners; evidence of
these relationships is seen in the growing market capitalization and
foreign investment. Economic performance remains closely tied to world
commodity markets, particularly oil, as well as agricultural
conditions, such as drought.
Several Northern African countries have substantial oil reserves
and, accordingly, their economies react strongly to world oil prices.
They share a regional and sometimes religious identification with the
oil producing nations of the Middle East and can be strongly affected
by political and economic developments in those countries. As in the
south, weather conditions have a strong impact on many of their
natural resources, as was the case in 1995, when severe drought
adversely affected economic growth.
Several African countries have active equity markets, many
established since 1989. The oldest market, in Egypt, was established
in 1883, while the youngest, in Zambia, was established in 1994. The
mean age for all equity markets is 40 years old. A total of 1,830
firms are listed on the respective exchanges. With the exception of
the relatively large and liquid South African stock market,
sub-Saharan Africa is probably the riskiest of all the world's
emerging markets.
During the past two decades, sub-Saharan Africa has lagged behind
other developing regions in economic growth. The area attracts only a
modest share of foreign direct investment and remains highly dependent
on foreign aid. The financial markets are small and underdeveloped and
offer little regulatory protection for investors. Except for South
Africa, the most fundamental problems in all of the countries in the
region are the absence of an effective court system to ensure the
enforceability of contracts. Investors in the area generally face a
high risk of continuing political and economic instability as well as
currency exchange rate volatility.
SOUTH AFRICA. South Africa has a highly developed and
industrialized economy. It is rich in mineral resources and is the
world's largest producer and exporter of gold. The nation's new
government has made remarkable progress in consolidating the nation's
peaceful transition to democracy and in redressing the socioeconomic
disparities created by apartheid. It has a sophisticated financial
structure with a large and active stock exchange that ranks 19th in
the world in terms of market capitalization. Nevertheless, investors
in South Africa face a number of risks common to other developing
regions. The nation's heavy dependence upon the export of natural
resources makes its economy and stock market vulnerable to weak global
demand and declines in commodity prices. The country's currency
reserves have been a constant problem and its currency can be
vulnerable to devaluation. There is also the risk that ethnic and
civic conflict could result in the abandonment of many of the nation's
free market reforms to the detriment of shareholders.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities (normally,
shares of the underlying Fidelity funds) are placed on behalf of each
Freedom Fund by Strategic Advisers, either itself or through its
affiliates, pursuant to authority contained in each Freedom Fund's
management contract. A Freedom Fund will not incur any commissions or
sales charges when it invests in underlying Fidelity funds, but it may
incur such costs if it invests directly in other types of securities.
All orders for the purchase or sale of portfolio securities are placed
on behalf of each underlying Fidelity fund by FMR pursuant to
authority contained in each underlying Fidelity fund's management
contract. Because the market for most OTC securities is made by market
makers or dealers, rather than on an exchange, FMR will place most of
its orders on behalf of Fidelity OTC Portfolio with dealers.
Ordinarily commissions are not charged on such orders. Thus, Fidelity
OTC Portfolio should incur a relatively small amount of commission
expenses. When Fidelity OTC Portfolio places an order with a dealer,
it pays a spread, which is included in the cost of the security, and
is the difference between the dealer's cost and the cost to the fund.
If FMR grants investment management authority to an underlying
Fidelity fund's sub-adviser, the sub-adviser is authorized to place
orders for the purchase and sale of portfolio securities on behalf of
that fund, and will do so in accordance with the policies described
below.
Strategic Advisers and FMR each is also responsible for the placement
of transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, Strategic Advisers and FMR consider various
relevant factors, including, but not limited to: the size and type of
the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and, in selecting broker-dealers to
place portfolio transactions for certain underlying Fidelity funds,
arrangements for payment of fund expenses.
Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.
The Freedom Funds and underlying Fidelity funds may execute portfolio
transactions with broker-dealers who provide research and execution
services to the funds or other investment accounts over which
Strategic Advisers, FMR, or their affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or
sellers of securities. In addition, such broker-dealers may furnish
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
investment accounts; and effect securities transactions and perform
functions incidental thereto (such as clearance and settlement).
The selection of such broker-dealers for transactions in equity
securities is generally made by Strategic Advisers or FMR (to the
extent possible consistent with execution considerations) in
accordance with a ranking of broker-dealers determined periodically by
Strategic Advisers' or FMR's investment staff based upon the quality
of research and execution services provided.
For transactions in fixed-income securities, Strategic Advisers' or
FMR's selection of broker-dealers is generally based on the
availability of a security and its price and, to a lesser extent, on
the overall quality of execution and other services, including
research, provided by the broker-dealer.
The receipt of research from broker-dealers that execute transactions
on behalf of the Freedom Funds or an underlying Fidelity fund may be
useful to Strategic Advisers or FMR, as the case may be, in rendering
investment management services to that fund or its other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other Strategic Advisers or FMR
clients may be useful to Strategic Advisers or FMR, as the case may
be, in carrying out its obligations to a fund. The receipt of such
research has not reduced Strategic Advisers' or FMR's normal
independent research activities; however, it enables Strategic
Advisers and FMR to avoid the additional expenses that could be
incurred if Strategic Advisers or FMR tried to develop comparable
information through its own efforts.
Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.
Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.
To the extent permitted by applicable law, Strategic Advisers and FMR
are authorized to allocate portfolio transactions in a manner that
takes into account assistance received in the distribution of shares
of the funds or other Fidelity funds and to use the research services
of brokerage and other firms that have provided such assistance.
Strategic Advisers and FMR may use research services provided by and
place agency transactions with National Financial Services Corporation
(NFSC) and Fidelity Brokerage Services Japan LLC (FBSJ), indirect
subsidiaries of FMR Corp., if the commissions are fair, reasonable,
and comparable to commissions charged by non-affiliated, qualified
brokerage firms for similar services. Prior to December 9, 1997, FMR
and Strategic Advisers used research services provided by and placed
agency transactions with Fidelity Brokerage Services (FBS), an
indirect subsidiary of FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
an underlying Fidelity fund toward the reduction of that fund's
expenses. The transaction quality must, however, be comparable to
those of other qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees of each fund periodically review Strategic Advisers' or
FMR's performance of its responsibilities in connection with the
placement of portfolio transactions on behalf of the Freedom Funds or
the underlying Fidelity funds, respectively, and review the
commissions paid by the fund over representative periods of time to
determine if they are reasonable in relation to the benefits to the
fund.
Each Freedom Fund's turnover rates for the fiscal periods ended March
31, 2000 and 1999 are presented in the table below. [Variations in
turnover rate may be due to a fluctuating volume of shareholder
purchase and redemption orders, market conditions, or changes in
Strategic Advisers' investment outlook.]]
Turnover Rates 2000 1999
Freedom Income % 29%
Freedom 2000 % 27%
Freedom 2010 % 27%
Freedom 2020 % 18%
Freedom 2030 % 16%
[The following tables show the brokerage commissions paid by the
funds. Significant changes in brokerage commissions paid by a fund
from year to year may result from changing asset levels throughout the
year.] A fund may pay both commissions and spreads in connection with
the placement of portfolio transactions. [For the fiscal years ended
March 31, 2000, 1999, and 1998, the funds paid no brokerage
commissions.]
[The following table shows the total amount of brokerage commissions
paid by each fund.
Fiscal Year Ended Total Amount Paid
FREEDOM INCOME March 31
2000 $
1999
1998
FREEDOM 2000
2000
1999
1998
FREEDOM 2010
2000
1999
1998
FREEDOM 2020
2000
1999
1998
FREEDOM 2030
2000
1999
1998]
[Of the following tables, the first shows the total amount of
brokerage commissions paid by each fund to NFSC [[and/,] FBS] [and
FBSJ], as applicable,] for the past three fiscal years. [The second
table shows the approximate percentage of aggregate brokerage
commissions paid by a fund to NFSC [[and/,] FBS] [and FBSJ]] for
transactions involving the approximate percentage of the aggregate
dollar amount of transactions for which the fund paid brokerage
commissions for the fiscal year ended 2000.] [NFSC [[[,/and] FBS,]
[and FBSJ]] [is/are] paid on a commission basis].]
Total Amount Paid
Fiscal Year Ended To NFSC [To FBS] [To FBSJ]
FREEDOM INCOME March 31
2000 $ [$ ] [$ ]
1999 [ ] [ ]
1998 [ ] [ ]
FREEDOM 2000
2000 [ ] [ ]
1999 [ ] [ ]
1998 [ ] [ ]
FREEDOM 2010
2000 [ ] [ ]
1999 [ ] [ ]
1998 [ ] [ ]
FREEDOM 2020
2000 [ ] [ ]
1999 [ ] [ ]
1998 [ ] [ ]
FREEDOM 2030
2000 [ ] [ ]
1999 [ ] [ ]
1998 [ ] [ ]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fiscal Year Ended 2000 % of Aggregate Commissions % of Aggregate Dollar Amount [% of Aggregate Commissions
Paid to NFSC of Transactions Effected Paid to FBS]
through NFSC
FREEDOM
INCOME March 31 % % [ %]
FREEDOM
2000 March 31 % % [ %]
FREEDOM
2010 March 31 % % [ %]
FREEDOM
2020 March 31 % % [ %]
FREEDOM
2030 March 31 % % [ %]
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[% of Aggregate Dollar [% of Aggregate Commissions [% of Aggregate Dollar Amount
Amount of Transactions Paid to FBSJ] of Transactions Effected
Effected through FBS] through FBSJ]
FREEDOM INCOME [ %] [ %] [ %]
FREEDOM 2000 [ %] [ %] [ %]
FREEDOM 2010 [ %] [ %] [ %]
FREEDOM 2020 [ %] [ %] [ %]
FREEDOM 2030 [ %] [ %] [ %]
</TABLE>
[(dagger) The difference between the percentage of aggregate brokerage
commissions paid to, and the percentage of the aggregate dollar amount
of transactions effected through, [[NFSC] [,/and] [FBS] [and FBSJ]] is
a result of the low commission rates charged by [[NFSC] [,/and] [FBS]
[and FBSJ]].]
[[NFSC] [,/and] [FBS] [and] [FBSJ] [has/have] used a portion of the
commissions paid by a fund to reduce that fund's expenses.]
[The following table shows the dollar amount of brokerage commissions
paid to firms that provided research services and the approximate
dollar amount of the transactions involved for the fiscal year ended
2000.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended 2000 $ Amount of Commissions Paid $ Amount of Brokerage
to Firms that Provided Transactions Involved*
Research Services*
FREEDOM INCOME March 31 $ $
FREEDOM 2000 March 31
FREEDOM 2010 March 31
FREEDOM 2020 March 31
FREEDOM 2030 March 31 ]
</TABLE>
[*The provision of research services was not necessarily a factor in
the placement of all this business with such firms.]
[For the fiscal year ended March 31, 2000, the funds paid no brokerage
commissions to firms that provided research services.]
The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for
the benefit of the Freedom Funds or the underlying Fidelity funds of
some portion of the brokerage commissions or similar fees paid by the
funds on portfolio transactions is legally permissible and advisable.
Each fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each Freedom Fund are
substantially the same as those of the underlying Fidelity funds and
other funds managed by FMR or its affiliates, investment decisions for
each Freedom Fund are made independently from those of other funds or
investment accounts managed by FMR or its affiliates. It
sometimes happens that the same security is held in the portfolio of
more than one of these funds or investment accounts. Simultaneous
transactions are inevitable when several funds and investment accounts
are managed by the same investment adviser, or an affiliate thereof,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.
When two or more Freedom Funds and/or underlying Fidelity funds are
simultaneously engaged in the purchase or sale of the same security,
the prices and amounts are allocated in accordance with procedures
believed to be appropriate and equitable for each fund. In some cases
this system could have a detrimental effect on the price or value of
the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume
transactions will produce better executions and prices for the funds.
It is the current opinion of the Trustees that the desirability of
retaining Strategic Advisers or FMR as investment adviser to each
Freedom Fund and underlying Fidelity fund, as applicable, outweighs
any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Each fund's NAV is the value of a single share. The NAV of each fund
is computed by adding the value of the fund's investments, cash, and
other assets, subtracting its liabilities, and dividing the result by
the number of shares outstanding.
The assets of each Freedom Fund consist primarily of shares of the
underlying Fidelity funds, which are valued at their respective NAVs.
VALUATION OF UNDERLYING FIDELITY FUNDS
GROWTH AND GROWTH & INCOME FUNDS. Portfolio securities are valued by
various methods depending on the primary market or exchange on which
they trade. Most equity securities for which the primary market is the
United States are valued at last sale price or, if no sale has
occurred, at the closing bid price. Most equity securities for which
the primary market is outside the United States are valued using the
official closing price or the last sale price in the principal market
in which they are traded. If the last sale price (on the local
exchange) is unavailable, the last evaluated quote or closing bid
price normally is used. Securities of other open-end investment
companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. Fidelity Service Company, Inc.
(FSC) gathers all exchange rates daily at the close of the New York
Stock Exchange (NYSE) using the last quoted price on the local
currency and then translates the value of foreign securities from
their local currencies into U.S. dollars. Any changes in the value of
forward contracts due to exchange rate fluctuations and days to
maturity are included in the calculation of NAV. If an event that is
expected to materially affect the value of a portfolio security occurs
after the close of an exchange or market on which that security is
traded, then that security will be valued in good faith by a committee
appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
TAXABLE BOND FUNDS. Portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade.
Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.
Most equity securities for which the primary market is the United
States are valued at last sale price or, if no sale has occurred, at
the closing bid price. Most equity securities for which the primary
market is outside the United States are valued using the official
closing price or the last sale price in the principal market in which
they are traded. If the last sale price (on the local exchange) is
unavailable, the last evaluated quote or closing bid price normally is
used.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
Independent brokers or quotation services provide prices of foreign
securities in their local currency. FSC gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the
local currency and then translates the value of foreign securities
from their local currencies into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate fluctuations and days
to maturity are included in the calculation of NAV. If an event that
is expected to materially affect the value of a portfolio security
occurs after the close of an exchange or market on which that security
is traded, then that security will be valued in good faith by a
committee appointed by the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.
The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.
MONEY MARKET FUND. Portfolio securities and other assets are valued on
the basis of amortized cost. This technique involves initially valuing
an instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than its current market value. The
amortized cost value of an instrument may be higher or lower than the
price the fund would receive if it sold the instrument.
Securities of other open-end investment companies are valued at their
respective NAVs.
At such intervals as they deem appropriate, the Trustees consider the
extent to which NAV calculated by using market valuations would
deviate from the $1.00 per share calculated using amortized cost
valuation. If the Trustees believe that a deviation from the fund's
amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or
reduce, to the extent reasonably practicable, the dilution or unfair
results. Such corrective action could include selling portfolio
instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming
shares in kind; establishing NAV by using available market quotations;
and such other measures as the Trustees may deem appropriate.
PERFORMANCE
The Freedom Funds and the underlying Fidelity funds may quote
performance in various ways, and the Freedom Funds may quote the
performance of various underlying Fidelity funds. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. The share price of a bond or
equity fund, the yield, if applicable, of a bond, money market, or
equity fund, and return fluctuate in response to market conditions and
other factors, and the value of an equity or bond fund's shares when
redeemed may be more or less than their original cost. The following
paragraphs describe how yield and return are calculated by the Freedom
Funds and the underlying Fidelity funds.
YIELD CALCULATIONS (FREEDOM INCOME). The yield for Freedom Income is
the asset-weighted average of the yields of the underlying Fidelity
funds in which it invests, reduced by Freedom Income's expenses. The
asset-weighted yield is calculated by multiplying the yield of each
underlying fund by the value of Freedom Income's investment in that
fund, adding together the results, dividing the sum by Freedom
Income's total net assets and then subtracting the annualized expenses
of Freedom Income. The asset-weighted yield is currently calculated
once a month as of the last day of the prior month. In those cases
where a yield is not published for an underlying fund, that fund's
yield is assumed to be zero for purposes of this calculation.
YIELD CALCULATIONS (MONEY MARKET FUND).To compute the yield for a
money market fund for a period, the net change in value of a
hypothetical account containing one share reflects the value of
additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at
the beginning of the period to obtain a base period return. This base
period return is annualized to obtain a current annualized yield. A
money market fund also may calculate an effective yield by compounding
the base period return over a one-year period. In addition to the
current yield, a money market fund may quote yields in advertising
based on any historical seven-day period. Yields for a money market
fund are calculated on the same basis as other money market funds, as
required by applicable regulation.
Yield information may be useful in reviewing a fund's performance and
in providing a basis for comparison with other investment
alternatives. However, a fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a fund's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
YIELD CALCULATIONS (BOND AND EQUITY FUNDS). Yields for a fund are
computed by dividing a fund's interest and dividend income for a given
30-day or one-month period, net of expenses, by the average number of
shares entitled to receive distributions during the period, dividing
this figure by the fund's NAV or offering price, as applicable at the
end of the period, and annualizing the result (assuming compounding of
income) in order to arrive at an annual percentage rate. Yields do not
reflect Fidelity Capital & Income Fund's trading fee or Fidelity
Europe Fund's, Fidelity Japan Fund's, and Fidelity Southeast Asia
Fund's short-term trading fee. Income is calculated for purposes of
yield quotations in accordance with standardized methods applicable to
all stock and bond funds. Dividends from equity investments are
treated as if they were accrued on a daily basis, solely for the
purposes of yield calculations. In general, interest income is reduced
with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and
is increased with respect to bonds trading at a discount by adding a
portion of the discount to daily income. For a fund's investments
denominated in foreign currencies, income and expenses are calculated
first in their respective currencies, and then are converted to U.S.
dollars, either when they are actually converted or at the end of the
30-day or one month period, whichever is earlier. Income is adjusted
to reflect gains and losses from principal repayments received by a
fund with respect to mortgage-related securities and other
asset-backed securities. Other capital gains and losses generally are
excluded from the calculation as are gains and losses from currency
exchange rate fluctuations.
Income calculated for the purposes of calculating a fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield calculations, a fund's yield
may not equal its distribution rate, the income paid to your account,
or the income reported in the fund's financial statements.
Yield information may be useful in reviewing a fund's performance and
in providing a basis for comparison with other investment
alternatives. However, a fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates
a fund's yield will tend to be somewhat higher than prevailing market
rates, and in periods of rising interest rates a fund's yield will
tend to be somewhat lower. Also, when interest rates are falling, the
inflow of net new money to a fund from the continuous sale of its
shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing a fund's
current yield. In periods of rising interest rates, the opposite can
be expected to occur.
RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a fund's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a fund's NAV over a
stated period. A cumulative return reflects actual performance over a
stated period of time. Average annual returns are calculated by
determining the growth or decline in value of a hypothetical
historical investment in a fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had
been constant over the period. For example, a cumulative return of
100% over ten years would produce an average annual return of 7.18%,
which is the steady annual rate of return that would equal 100% growth
on a compounded basis in ten years. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) in order to illustrate the
relationship of these factors and their contributions to return.
Returns may be quoted on a before-tax or after-tax basis. Returns may
or may not include the effect of a fund's maximum sales charge or the
effect of Fidelity Capital & Income Fund's trading fee or Fidelity
Europe Fund's, Fidelity Japan Fund's, and Fidelity Southeast Asia
Fund's short-term trading fee[or Fidelity Diversified International
Fund's and Fidelity Overseas Fund's small account fee]. Excluding a
fund's sales charge, trading fee or short-term trading fee from a
return calculation produces a higher return figure. Returns, yields,
if applicable, and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a fund's NAVs, adjusted NAVs,
and benchmark indexes may be used to exhibit performance. An adjusted
NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted
NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average. The
13-week and 39-week long-term moving averages for each fund are
shown in the table below.
Fund 13-Week Long-Term Moving 39-Week Long-Term Moving
Average Average
Freedom Income* $ $
$ $
$ $
Freedom 2000* $ $
$ $
$ $
Freedom 2010* $ $
$ $
$ $
Freedom 2020* $ $
$ $
$ $
Freedom 2030* $ $
$ $
$ $
* On March 31, 2000.
HISTORICAL FUND RESULTS. The following table shows each Freedom Fund's
returns and for Freedom Income, its 30-day yield, for the fiscal
period ended March 31, 2000 .
Average Annual Returns Cumulative Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Thirty- Day Yield** Tax- Equivalent Yield One Year Life of Fund* One Year Life of Fund*
Freedom Income % % % % % %
Freedom 2000 % % % % % %
Freedom 2010 n/a n/a % % % %
Freedom 2020 n/a n/a % % % %
Freedom 2030 n/a n/a % % % %
</TABLE>
* From October 17, 1996 (commencement of operations).
** The yield for Freedom Income is the asset-weighted average of the
yields of the underlying Fidelity funds in which it invests, reduced
by Freedom Income's expenses.
Note: If Strategic Advisers had not reimbursed certain fund expenses
during these periods, each fund's returns would have been lower.
[Note: If Strategic Advisers had not reimbursed certain fund expenses
during these periods, Freedom Income's yield would have been ___%].
HISTORICAL FUND RESULTS - UNDERLYING FIDELITY FUNDS. The following
table shows the underlying Fidelity funds' 7-day or 30-day yields
and/or return for the fiscal periods ended March 31,
2000 . Returns include the effect of a fund's maximum sales
charge, if any, but do not include the effect of a fund's short-term
trading fee.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns
Underlying Fidelity Fund Thirty-/Seven- Day Tax Equivalent Yield One Year Five Years Ten Years/ Life of Fund*
Yield(dagger)
Fidelity Blue Chip Growth Fund1 % % % % %
Fidelity Capital & Income Fund2 % % % % %
Fidelity Disciplined Equity % % % % %
Fund
Fidelity Diversified % % % % %
International Fund8
Fidelity Equity-Income Fund % % % % %
Fidelity Europe Fund3 % % % % %
Fidelity Fund % % % % %
Fidelity Government Income Fund % % % % %
Fidelity Growth & Income % % % % %
Portfolio
Fidelity Growth Company Fund4 % % % % %
Fidelity Intermediate Bond Fund % % % % %
Fidelity Investment Grade % % % % %
Bond Fund
Fidelity Japan Fund5 % % % % %
Fidelity Money Market Trust: % % % % %
Retirement Money Market
Portfolio
Fidelity OTC Portfolio6 % % % % %
Fidelity Overseas Fund8 % % % % %
Fidelity Southeast Asia Fund7 % % % % %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative Total Returns
Underlying Fidelity Fund One Year Five Years Ten Years/ Life of Fund*
Fidelity Blue Chip Growth Fund1 % % %
Fidelity Capital & Income Fund2 % % %
Fidelity Disciplined Equity % % %
Fund
Fidelity Diversified % % %
International Fund8
Fidelity Equity-Income Fund % % %
Fidelity Europe Fund3 % % %
Fidelity Fund % % %
Fidelity Government Income Fund % % %
Fidelity Growth & Income % % %
Portfolio
Fidelity Growth Company Fund4 % % %
Fidelity Intermediate Bond Fund % % %
Fidelity Investment Grade % % %
Bond Fund
Fidelity Japan Fund5 % % %
Fidelity Money Market Trust: % % %
Retirement Money Market
Portfolio
Fidelity OTC Portfolio6 % % %
Fidelity Overseas Fund8 % % %
Fidelity Southeast Asia Fund7 % % %
</TABLE>
* Fidelity Diversified International Fund commenced operations on
December 27, 1991.
Fidelity Japan Fund commenced operations on September 15, 1992.
Fidelity Southeast Asia Fund commenced operations on April 19, 1993.
(dagger) Yields shown are for the 30-day period ended March 31,
2000 , except for the yield shown for Fidelity Money Market
Trust: Retirement Money Market Portfolio, which is for the seven-day
period ended March 31, 2000 .
1 Total return figures include the effect of Fidelity Blue Chip Growth
Fund's 3.0% sales charge which was in effect prior to October 1, 1998.
2 Total return figures do not include the effect of Fidelity Capital &
Income Fund's 1.5% redemption fee, applicable to shares held less than
365 days. In addition, when considering historical performance, be
aware that effective December 30, 1990, the fund adopted a new
investment objective and changed its name from Fidelity High Income
Fund to Fidelity Capital & Income Fund. Accordingly, historical
performance may not be representative of the fund's future performance
under its current investment objective and policies.
3 Total return figures include the effect of Fidelity Europe Fund's
3.0% sales charge (eliminated effective March 1, 2000) , but do
not include the effect of the fund's 1.0% short-term trading fee,
applicable to shares held less than 90 days that were redeemed on
or before February 29, 2000 .
4 Total return figures include the effect of Fidelity Growth Company's
3.0% sales charge which was in effect prior to January 1, 1997.
5 Total return figures include the effect of Fidelity Japan Fund's
3.0% sales charge, but do not include the effect of the fund's 1.5%
short-term trading fee, applicable to shares held less than 90 days.
6 Total return figures include the effect of Fidelity OTC Portfolio's
3.0% sales charge which was in effect prior to October 1, 1998.
7 Total return figures include the effect of Fidelity Southeast Asia
Fund's 3.0% sales charge, but do not include the effect of the fund's
1.5% short-term trading fee, applicable to shares held less than 90
days.
8 Total return figures do not include the effect of the fund's 1.00%
short-term trading fee, applicable to shares held less than 30 days
that are redeemed after May 31, 2000.
Note: If FMR had not reimbursed certain underlying Fidelity fund
expenses during these periods, [Fidelity Diversified International
Fund, Fidelity Intermediate Bond Fund, Fidelity Europe Fund, Fidelity
Southeast Asia Fund, and Fidelity Japan Fund's] returns would have
been lower.
[Note: If FMR had not reimbursed certain underlying Fidelity fund
expenses during these periods, [Fidelity Intermediate Bond Fund's and
Fidelity Money Market Trust: Retirement Money Market Portfolio's]
returns would have been lower.]
The performance data relating to the underlying Fidelity funds set
forth above is not indicative of future performance of either the
underlying Fidelity funds or the Freedom Funds.
The following tables show the income and capital elements of each
fund's cumulative return. The tables compare each fund's return to the
record of the S&P 500, the Dow Jones Industrial Average (DJIA), and
the cost of living, as measured by the Consumer Price Index (CPI),
over the same period. The S&P 500 and DJIA comparisons are provided to
show how each fund's return compared to the record of a market
capitalization-weighted index of common stocks and a narrower set
of stocks of major industrial companies, respectively, over the same
period. Each fund has the ability to invest in securities not included
in either index, and its investment portfolio may or may not be
similar in composition to the indexes. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the life of each fund, assuming
all distributions were reinvested. Returns are based on past results
and are not an indication of future performance. Tax consequences of
different investments have not been factored into the figures below.
During the period from October 17, 1996 (commencement of operations)
to March 31, 2000 , a hypothetical $10,000 investment in Freedom
Income would have grown to $ _______ .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FREEDOM INCOME INDEXES
Period Ended March
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FREEDOM INCOME
Period Ended March 31 DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997* $ $
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom
Income on October 17, 1996, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $_____. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $______ for capital gain
distributions.
During the period from October 17, 1996 (commencement of operations)
to March 31, 2000 , a hypothetical $10,000 investment in Freedom
2000 would have grown to $ _______ .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FREEDOM 2000 INDEXES
Period Ended March
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FREEDOM 2000
Period Ended March 31 DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997* $ $
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom
2000 on October 17, 1996, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $_____. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $______ for capital gain
distributions.
During the period from October 17, 1996 (commencement of operations)
to March 31, 2000 , a hypothetical $10,000 investment in Freedom
2010 would have grown to $ _______ .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FREEDOM 2010 INDEXES
Period Ended March
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FREEDOM 2010
Period Ended March 31 DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997* $ $
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom
2010 on October 17, 1996, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $_____. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $______ for capital gain
distributions.
During the period from October 17, 1996 (commencement of operations)
to March 31, 2000 , a hypothetical $10,000 investment in Freedom
2020 would have grown to $ _______ .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FREEDOM 2020 INDEXES
Period Ended March
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FREEDOM 2020
Period Ended March 31 DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997* $ $
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom
2020 on October 17, 1996, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $_____. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $______ for capital gain
distributions.
During the period from October 17, 1996 (commencement of operations)
to March 31, 2000 , a hypothetical $10,000 investment in Freedom
2030 would have grown to $ _______ .
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FREEDOM 2030 INDEXES
Period Ended March
31 Value of Initial $10,000 Value of Reinvested Dividend Value of Reinvested Capital Total Value S&P 500
Investment Distributions Gain Distributions
2000 $ $ $ $ $
1999 $ $ $ $ $
1998 $ $ $ $ $
1997* $ $ $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FREEDOM 2030
Period Ended March 31 DJIA Cost of Living**
2000 $ $
1999 $ $
1998 $ $
1997* $ $
</TABLE>
* From October 17, 1996 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Freedom
2030 on October 17, 1996, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000) together with
the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $_____. If distributions had not
been reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would
have amounted to $______ for dividends and $______ for capital gain
distributions.
INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL
STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the International Finance Corporation Emerging
Markets database, and the performance of national stock markets as
measured in U.S. dollars by the Morgan Stanley Capital International
stock market indexes for the twelve months ended March 31,
2000 . Of course, these results are not indicative of future
stock market performance or the funds' performance. Market conditions
during the periods measured fluctuated widely. Brokerage commissions
and other fees are not factored into the values of the indexes.
MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew from $7,920.2 billion in 1999
to $____ billion in 2000.
The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of each market is measured
in billions of U.S. dollars as of March 31, 2000 .
TOTAL MARKET CAPITALIZATION
Australia $ Japan $
Austria $ Malaysia $
Belgium $ Netherlands $
Canada $ Norway $
Denmark $ Singapore $
France $ Spain $
Germany $ Sweden $
Hong Kong $ Switzerland $
Italy $ United Kingdom $
United States $
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation
Emerging Markets database. The value of each market is measured in
billions of U.S. dollars as of March 31, 2000 .
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $
Brazil $
Chile $
Colombia $
Mexico $
Venezuela $
Peru $
Total Latin America $______
NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended March 31, 2000 . The second table shows
the same performance as measured in local currency. Each table
measures return based on the period's change in price, dividends paid
on stocks in the index, and the effect of reinvesting dividends net of
any applicable foreign taxes. These are unmanaged indexes composed of
a sampling of selected companies representing an approximation of the
market structure of the designated country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia % Japan %
Austria % Malaysia %
Belgium % Netherlands %
Canada % Norway %
Denmark % Singapore %
France % Spain %
Germany % Sweden %
Hong Kong % Switzerland %
Italy % United Kingdom %
United States %
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia % Japan %
Austria % Malaysia %
Belgium % Netherlands %
Canada % Norway %
Denmark % Singapore %
France % Spain %
Germany % Sweden %
Hong Kong % Switzerland %
Italy % United Kingdom %
United States %
The following table shows the average annualized stock market returns
measured in U.S. dollars as of March 31, 2000 .
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
March 31, 2000 March 31, 2000
% %
Germany % %
Hong Kong % %
Japan % %
Spain % %
United Kingdom % %
United States % %
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. Lipper may also rank based on yield. In
addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance
indexes prepared by Lipper or other organizations. When comparing
these indexes, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds
may offer greater stability of principal, but generally do not offer
the higher potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a fund may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund's performance may also be compared to that of each benchmark
index representing the universe of securities in which the fund may
invest. The return of each index reflects reinvestment of all
dividends and capital gains paid by securities included in each index.
Unlike a fund's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.
The performance of each Freedom Fund may be compared to the
performance of a target asset allocation composite index (Composite
Index). A Freedom Fund's Composite Index is a representation of the
performance of the asset classes (domestic and international equity
funds, investment-grade and high yield fixed-income funds, and money
market funds) in which a Freedom Fund is invested and is based on the
weightings of each asset class in a Freedom Fund. The following
indexes are used to calculate a Freedom Fund's Composite Index:
Wilshire 5000 Index for the domestic equity fund class, Morgan Stanley
Capital International Europe, Australasia and Far East Index (MSCI
EAFE) for the international equity fund class, Lehman Brothers
Aggregate Bond Index for the investment-grade fixed-income fund class,
Merrill Lynch High Yield Master II Index for the high yield
fixed-income fund class, and Lehman Brothers 3-Month Treasury Bill
Index for the money market fund class. The index weightings of each
Composite Index are rebalanced monthly.
The index weightings in the Fidelity Freedom 2000 Composite Index,
Fidelity Freedom 2010 Composite Index, Fidelity Freedom 2020 Composite
Index, and Fidelity Freedom 2030 Composite Index, are adjusted
semi-annually to reflect the changing asset allocations of the Freedom
Funds with target retirement dates. On June 30 of each calendar year,
the index weightings will be adjusted to reflect the average of the
Freedom Fund's actual asset allocation as of March 31 and its
projected target asset allocation as of September 30, as reported in
the Freedom Funds' Annual Report for the fiscal year ended March 31.
On December 31, the index weightings will be adjusted to reflect each
Freedom Fund's actual asset allocation as of September 30 and its
projected target asset allocation as of March 31, as reported in the
Freedom Funds' Semi-Annual Report for the period ended September 30.
The index weightings in the Fidelity Freedom Income Composite Index
are not adjusted semi-annually, as Freedom Income maintains a stable
asset allocation strategy.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: OCTOBER
17, 1996 THROUGH JUNE 30,
1997*
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 39.2% 4.4% 40.9% 4.0%
Freedom 2010 59.2% 9.7% 24.1% 7.0%
Freedom 2020 70.0% 12.4% 10.1% 7.5%
Freedom 2030 70.0% 15.0% 5.0% 10.0%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: OCTOBER
17, 1996 THROUGH JUNE 30,
1997*
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 11.5%
Freedom 2010 --
Freedom 2020 --
Freedom 2030 --
</TABLE>
* The weightings of the Composite Indices of the Freedom Funds' did
not change on December 31, 1996.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1997 THROUGH DECEMBER 31, 1997
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 38.2% 4.5% 40.8% 4.0%
Freedom 2010 57.7% 9.5% 25.0% 7.1%
Freedom 2020 69.1% 12.6% 10.7% 7.6%
Freedom 2030 69.6% 15.1% 5.3% 10.0%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1997 THROUGH DECEMBER 31, 1997
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 12.5%
Freedom 2010 0.7%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1997 THROUGH JUNE 30, 1998
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 37.9% 4.3% 40.5% 3.9%
Freedom 2010 56.8% 9.2% 25.7% 7.0%
Freedom 2020 68.6% 12.4% 11.4% 7.6%
Freedom 2030 69.6% 15.0% 5.5% 9.9%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1997 THROUGH JUNE 30, 1998
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 13.4%
Freedom 2010 1.3%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1998 THROUGH DECEMBER 31, 1998
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 36.8% 3.9% 40.3% 3.6%
Freedom 2010 55.2% 8.5% 27.2% 6.7%
Freedom 2020 67.9% 11.9% 12.7% 7.5%
Freedom 2030 70.0% 14.5% 6.0% 9.5%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1998 THROUGH DECEMBER 31, 1998
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 15.4%
Freedom 2010 2.4%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1998 THROUGH JUNE 30, 1999
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 34.9% 3.4% 40.5% 3.4%
Freedom 2010 52.4% 7.8% 29.5% 6.6%
Freedom 2020 66.3% 11.3% 14.8% 7.6%
Freedom 2030 70.0% 13.9% 6.8% 9.3%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1998 THROUGH JUNE 30, 1999
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 17.8%
Freedom 2010 3.7%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1999 THROUGH DECEMBER 31, 1999
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 33.7% 3.4% 39.8% 3.3%
Freedom 2010 50.2% 7.6% 31.1% 6.3%
Freedom 2020 64.7% 11.4% 16.3% 7.6%
Freedom 2030 69.8% 13.9% 7.4% 8.9%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1999 THROUGH DECEMBER 31, 1999
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 19.8%
Freedom 2010 4.8%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1999 THROUGH JUNE 30, 2000
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income % -- % --
Freedom 2000 % % % %
Freedom 2010 % % % %
Freedom 2020 % % % %
Freedom 2030 % % % %
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1999 THROUGH JUNE 30, 2000
Lehman Brothers 3-Month
T-Bill Index
Freedom Income %
Freedom 2000 %
Freedom 2010 %
Freedom 2020 --
Freedom 2030 --
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
2000 THROUGH DECEMBER 31, 2000
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master II Index
Freedom Income % -- % --
Freedom 2000 % % % %
Freedom 2010 % % % %
Freedom 2020 % % % %
Freedom 2030 % % % %
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
2000 THROUGH DECEMBER 31, 2000
Lehman Brothers 3-Month
T-Bill Index
Freedom Income %
Freedom 2000 %
Freedom 2010 %
Freedom 2020 --
Freedom 2030 --
</TABLE>
WILSHIRE 5000 is a market capitalization-weighted index of
approximately 7,000 U.S. equity securities which contains all actively
traded common stocks with readily available price data traded on the
New York Stock Exchange, American Stock Exchange and NASDAQ.
MSCI EAFE. The Morgan Stanley Capital International Europe,
Australasia, Far East (EAFE) Index is a market capitalization-weighted
index that is designed to represent the performance of developed stock
markets outside of the United States and Canada. The index returns for
periods after January 1, 1997 are adjusted for tax withholding rates
applicable to U.S.-based mutual funds organized as Massachusetts
business trusts. Effective October 1, 1998, the country of Malaysia
was removed from this index. The index returns reflect the inclusion
of Malaysia prior to October 1, 1998.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value-weighted index
for investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities. Issues
included in the index have an outstanding par value of at least $100
million and maturities of at least one year. Government and corporate
issues include all public obligations of the U.S. Treasury (excluding
flower bonds and foreign-targeted issues) and U.S. Government
agencies, as well as nonconvertible investment-grade, SEC-registered
corporate debt. Mortgage-backed securities include 15- and 30-year
fixed-rate securities backed by mortgage pools of the Government
National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC), and Fannie Mae. Asset-backed securities include
credit card, auto, and home equity loans.
MERRILL LYNCH HIGH YIELD MASTER II INDE X is a market
value-weighted index of all domestic and yankee high-yield bonds,
including deferred interest bonds and payment-in-kind securities.
Issues included in the index have maturities of one year or more and
have a credit rating lower than BBB-/Baa3, but are not in default.
Issues must have an outstanding par value of at least $50 million to
be included in the index.
LEHMAN BROTHERS 3-MONTH TREASURY BILL INDEX is a representation of the
average of T-Bill rates for each of the prior three months, adjusted
to a bond equivalent yield basis (short-term instruments).
The following table represents the comparative indexes' calendar
year-to-year performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield Lehman Brothers 3-Month
Bond Index Master II Index Treasury Bill Index
1999 % % % % %
1998 % % % % %
1997 % % % % %
1996 % % % % %
1995 % % % % %
1994 % % % % %
1993 % % % % %
1992 % % % % %
1991 % % % % %
1990 % % % % %
</TABLE>
Each of the Freedom Funds may compare its performance to that of
the Wilshire 5000, a market capitalization-weighted index of
approximately 7,000 U.S. equity securities which contains all actively
traded common stocks with readily available price data traded on the
New York Stock Exchange, American Stock Exchange, and NASSAU. Each
fund may also compare its performance to the Standard & Poor's 500
Index, a market capitalization-weighted index of common stocks. The
performance of these indexes over any period since their inception may
be quoted in fund advertising.
Each of the Freedom Funds may compare its performance to that of
the EAFE, a market capitalization-weighted index that is designed to
represent the performance of developed stock markets outside the
United States and Canada. As of ____, the index included over ____
equity securities of companies domiciled in ___ countries. Each fund
may also compare its performance to the Standard & Poor's 500 Index, a
market capitalization-weighted index of common stocks. The index
returns for the EAFE for the periods after January 1, 1997, may be
adjusted for tax withholding rates applicable to U.S.-based mutual
funds organized as Massachusetts business trusts. Effective October 1,
1998, the country of Malaysia was removed from this index. The index
returns reflect the inclusion of Malaysia prior to October 1, 1998.
The performance of these indexes over any period since their inception
may be quoted in fund advertising.
Each of the Freedom Funds may also compare its performance to the
Lehman Brothers Aggregate Bond Index, a market value-weighted index
for investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities. Issues
included in the index have an outstanding par value of at least $100
million and maturities of at least one year. Government and corporate
issues include all public obligations of the U.S. Treasury (excluding
flower bonds and foreign-targeted issues) and U.S. Government
agencies, as well as nonconvertible investment-grade, SEC-registered
corporate debt. Mortgage-backed securities include 15- and 30-year
fixed-rate securities backed by mortgage pools of the Government
National Mortgage Association (GNMA), Federal Home Loan Mortgage
Corporation (FHLMC), and Fannie Mae. Asset-backed securities include
credit card, auto, and home equity loans.
Each of the Freedom Funds may also compare its performance to the
Lehman Brothers 3-Month Treasury Bill Index, a representation of the
average of T-Bill rates for each of the prior three months, adjusted
to a bond equivalent yield basis (short-term instruments).
Each of the Freedom Funds may compare its performance to that of
the Merrill Lynch High Yield Master II Index, a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default. Issues must have an
outstanding par value of at least $50 million to be included in the
index.
A fund may be compared in advertising to Certificates of Deposit (CDs)
or other investments issued by banks or other depository institutions.
Mutual funds differ from bank investments in several respects. For
example, a fund may offer greater liquidity or higher potential
returns than CDs, a fund does not guarantee your principal or your
return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manager.
VOLATILITY. A fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare a fund's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data. In advertising, a fund may also discuss or illustrate examples
of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific
periods of time. Each point on the momentum indicator represents a
fund's percentage change in price movements over that period.
A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a
$1,000 investment earning a taxable return of 10% annually would have
an after-tax value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate. An equivalent
tax-deferred investment would have an after-tax value of $2,100 after
ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of March 31, 2000 , FMR advised over $__ billion in municipal
fund assets, $__ billion in taxable fixed-income fund assets, $__
billion in money market fund assets, $___ billion in equity fund
assets, $__ billion in international fund assets, and $___ billion in
Spartan(registered trademark) fund assets. The funds may reference the
growth and variety of money market mutual funds and the adviser's
innovation and participation in the industry. The equity funds under
management figure represents the largest amount of equity fund assets
under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR,
its subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
Each Freedom Fund may reference, illustrate, or discuss the
performance of the underlying Fidelity funds.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
A fund may make redemption payments in whole or in part in
readily marketable securities or other property, valued for this
purpose as they are valued in computing each fund's NAV , if FMR
determines it is in the best interests of the fund . Shareholders
that receive securities or other property on redemption may
realize a gain or loss for tax purposes, and will incur any costs of
sale, as well as the associated inconveniences.
DISTRIBUTIONS AND TAXES
DIVIDENDS. A portion of each Freedom Fund's income may qualify for the
dividends-received deduction available to corporate shareholders to
the extent that each Freedom Fund's income is derived from qualifying
dividends or from the qualifying portion of dividends from an
underlying Fidelity fund. For each Freedom Fund and for those
underlying Fidelity funds that may earn other types of income that do
not qualify for the dividends-received deduction available to
corporate shareholders, such as interest, short-term capital gains
(including short-term capital gains distributed by an underlying
Fidelity fund as a dividend as well as short-term capital gains earned
on the sale of underlying Fidelity fund shares or other securities),
and non-qualifying dividends, the percentage of fund dividends that
qualifies for the deduction generally will be less than 100%. A
portion of each Freedom Fund's dividends derived from certain U.S.
Government securities, including the portion of dividends from an
underlying Fidelity fund derived from certain U.S. Government
securities, and securities of certain other investment companies may
be exempt from state and local taxation.
CAPITAL GAIN DISTRIBUTIONS. Each Freedom Fund's long-term capital
gain distributions, including amounts attributable to an
underlying Fidelity fund's long-term capital gain
distributions, are federally taxable to shareholders generally as
capital gains.
[As of March 31, 2000, each Freedom Fund had a capital loss
carryforward aggregating approximately $____. This loss carryforward,
of which $___, $___, and $___will expire on March 31, ____, ____, and
____ , respectively, is available to offset future capital gains [,
subject to certain limitations] .]
RETURNS OF CAPITAL. If a fund's distributions exceed its taxable
income and capital gains realized during a taxable year, all or a
portion of the distributions made in the same taxable year may be
recharacterized as a return of capital to shareholders. A return of
capital distribution will generally not be taxable, but will reduce
each shareholder's cost basis in the fund and result in a higher
reported capital gain or lower reported capital loss when those shares
on which the distribution was received are sold.
TAX STATUS OF THE FUNDS. Each Freedom Fund intends to qualify each
year as a "regulated investment company" under Subchapter M of the
Internal Revenue Code so that it will not be liable for federal tax on
income and capital gains distributed to shareholders. In order to
qualify as a regulated investment company, and avoid being subject to
federal income or excise taxes at the fund level, each Freedom Fund
intends to distribute substantially all of its net investment income
and net realized capital gains within each calendar year as well as on
a fiscal year basis, and intends to comply with other tax rules
applicable to regulated investment companies.
Five to ten years after a Freedom Fund with a target retirement date
reaches its target retirement year, its asset allocation target is
expected to match Freedom Income Fund's asset allocation target. It is
expected that at such time the assets of the Freedom Fund with a
target retirement date will be combined with the assets of Freedom
Income Fund. The Trustees reserve the right to engage in such
transactions in the best interests of the funds, taking into account
then existing laws and regulations. The trust's Trust Instrument
empowers the Trustees to take these actions with or without seeking
shareholder approval. A combination of assets may result in a capital
gain or loss for shareholders of a Freedom Fund with a target
retirement date.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting each Freedom Fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. It is up to you or your tax preparer to determine
whether the sale of shares of a fund resulted in a capital gain or
loss or other tax consequence to you. In addition to federal income
taxes, shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a Freedom Fund is suitable to their particular tax
situation.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. The
Board of Trustees governs each Freedom Fund and is responsible for
protecting the interests of shareholders. The Trustees are experienced
executives who meet periodically throughout the year to oversee each
Freedom Fund's activities, review contractual arrangements with
companies that provide services to each Freedom Fund, and review each
Freedom Fund's performance. Except as indicated, each individual has
held the office shown or other offices in the same company for the
last five years. All persons named as Trustees also serve in similar
capacities for other funds advised by FMR or its affiliates, including
the underlying Fidelity funds. If the interests of a Freedom Fund and
an underlying Fidelity fund were to diverge, a conflict of interest
could arise and affect how the Trustees fulfill their fiduciary duties
to the affected funds. Strategic Advisers has structured the Freedom
Funds to avoid these potential conflicts, although there may be
situations where a conflict of interest is unavoidable. In such
instances, Strategic Advisers and the Trustees would take reasonable
steps to minimize and, if possible, eliminate the conflict. The
business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business
address of all the other Trustees is Fidelity Investments(registered
trademark), P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation
with the trust, Strategic Advisers, or FMR are indicated by an
asterisk (*).
*EDWARD C. JOHNSON 3d ( 69 ), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director and
Chairman of the Board and of the Executive Committee of FMR; Chairman
and a Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.; and a Director of FDC. Abigail Johnson,
Member of the Advisory Board of Fidelity Aberdeen Street Trust, is Mr.
Johnson's daughter.
ABIGAIL P. JOHNSON ( 38 ), Member of the Advisory Board of
Fidelity Aberdeen Street Trust (1999), is Vice President of certain
Equity Funds (1997), and is a Director of FMR Corp. (1994). Before
assuming her current responsibilities, Ms. Johnson managed a number of
Fidelity funds. Edward C. Johnson 3d, Trustee and President of the
Funds, is Ms. Johnson's father.
RALPH F. COX ( 67 ), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petroleum
production). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS ( 68), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., Nabisco
Brands, Inc., and Standard Brands, Inc. In addition, she is a member
of the Board of Directors of the Southampton Hospital in Southampton,
N.Y. (1998).
ROBERT M. GATES ( 56 ), Trustee (1997), is a consultant, author,
and lecturer (1993). Mr. Gates was Director of the Central
Intelligence Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates
served as Assistant to the President of the United States and Deputy
National Security Advisor. Mr. Gates is a Director of Charles Stark
Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A & M University (1999-2000) . Mr. Gates
also is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition,
he is a member of the National Executive Board of the Boy Scouts of
America.
DONALD J. KIRK ( 67 ), Trustee, is Executive-in-Residence (1995)
at Columbia University Graduate School of Business. From 1987 to
January 1995, Mr. Kirk was a Professor at Columbia University Graduate
School of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a
Director of Valuation Research Corp. (appraisals and valuations,
1993-1995). He serves as Chairman of the Board of Directors of
National Arts Stabilization Inc., Chairman of the Board of Trustees of
the Greenwich Hospital Association, Director of the Yale-New Haven
Health Services Corp. (1998), Vice Chairman of the Public
Oversight Board of the American Institute of Certified Public
Accountants' SEC Practice Section (1995), and as a Public Governor of
the National Association of Securities Dealers, Inc. (1996).
NED C. LAUTENBACH (56), Trustee (2000), has been a partner of
Clayton, Dubilier & Rice, Inc. (private equity investment firm) since
September 1998. Mr. Lautenbach was Senior Vice President of IBM
Corporation from 1992 until his retirement in July 1998. From 1993 to
1995 he was Chairman of IBM World Trade Corporation. He also was a
member of IBM's Corporate Executive Committee from 1994 to July 1998.
He is a Director of PPG Industries Inc. (glass, coating and chemical
manufacturer), Dynatech Corporation (global communications equipment),
Eaton Corporation (global manufacturer of highly engineered products)
and ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
*PETER S. LYNCH ( 57 ), Trustee, is Vice Chairman and Director of
FMR. Prior to May 31, 1990, he was a Director of FMR and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan(registered trademark) Fund and FMR
Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was
also Vice President of Fidelity Investments Corporate Services
(1991-1992). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and
Society for the Preservation of New England Antiquities, and as an
Overseer of the Museum of Fine Arts of Boston.
WILLIAM O. McCOY ( 66 ), Trustee (1997), is the Interim
Chancellor for the University of North Carolina at Chapel Hill.
Previously he had served from 1995 through 1998 as Vice President of
Finance for the University of North Carolina (16-school system).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Duke-Weeks Realty
Corporation (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), the Kenan Transport Company (trucking,
1996), and Dynatech Corporation (electronics, 1999). Previously,
he was a Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board
of Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).
GERALD C. McDONOUGH ( 71 ), Trustee and Chairman of the
non-interested Trustees, is Chairman of G.M. Management Group
(strategic advisory services). Mr. McDonough is a Director and
Chairman of the Board of York International Corp. (air
conditioning and refrigeration), Commercial Intertech Corp. (hydraulic
systems, building systems, and metal products, 1992), CUNO, Inc.
(liquid and gas filtration products, 1996), and Associated Estates
Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN ( 66 ), Trustee (1993), is Chairman
Emeritus of Lexmark International, Inc. (office machines, 1991)
where he still remains a member of the Board . Prior to 1991, he
held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of
various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A.
Hanna Company (chemicals, 1993), Imation Corp. (imaging and
information storage, 1997). He is a Board member of Dynatech
Corporation (electronics, 1999).
*ROBERT C. POZEN ( 53 ), Trustee (1997) and Senior Vice
President, is also President and a Director of FMR (1997); and
President and a Director of Fidelity Investments Money Management,
Inc. (1998), Fidelity Management & Research (U.K.) Inc. (1997), and
Fidelity Management & Research (Far East) Inc. (1997). Previously, Mr.
Pozen served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS ( 71 ), Trustee, is President of The Wales
Group, Inc. (management and financial advisory services). Prior to
retiring in 1987, Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company), and Chairman and
Chief Executive Officer of The First National Bank of Atlanta and
First Atlanta Corporation (bank holding company). He is currently a
Director of National Life Insurance Company of Vermont and American
Software, Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).
ROBERT A. LAWRENCE ( 4 7), is Vice President of certain High
Income Bond Funds ( 2000 ), Vice President of Fidelity Real
Estate High Income Fund (1995) and Fidelity Real Estate High Income
Fund II (1996), Vice President of certain Equity Funds (1997),
and Senior Vice President of FMR (1993).
REN Y. CHENG ( 43 ), is Vice President of Fidelity Freedom 2000
(1998), Fidelity Freedom 2010 (1998), Fidelity Freedom 2020 (1998),
Fidelity Freedom 2030 (1998), and Fidelity Freedom Income Fund (1998).
Prior to joining Fidelity as a portfolio manager in 1994, Mr. Cheng
spent nine years at Putnam Investments, most recently as a senior vice
president and senior portfolio manager.
SCOTT D. STEWART ( 41 ), is Vice President of Fidelity Freedom
2000 (1996), Fidelity Freedom 2010 (1996), Fidelity Freedom 2020
(1996), Fidelity Freedom 2030 (1996), and Fidelity Freedom Income Fund
(1996) . Mr. Stewart is also a Senior Vice President and group
leader of Fidelity's Structured Equity Group. Prior to his current
responsibilities, Mr. Stewart has managed a variety of Fidelity funds.
ERIC D. ROITER ( 51 ), Secretary (1998), is Vice President (1998)
and General Counsel of FMR (1998) and Vice President and Clerk of FDC
(1998). Prior to joining Fidelity, Mr. Roiter was with the law firm of
Debevoise & Plimpton, as an associate (1981-1984) and as a partner
(1985-1997), and served as an Assistant General Counsel of the U.S.
Securities and Exchange Commission (1979-1981). Mr. Roiter was an
Adjunct Member, Faculty of Law, at Columbia University Law School
(1996-1997).
ROBERT A. DWIGHT (42), Treasurer (2000), is Treasurer of the
Fidelity funds and is an employee of FMR. Prior to becoming Treasurer
of the Fidelity funds, he served as President of Fidelity Accounting
and Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.
MARIA F. DWYER (42), Deputy Treasurer (2000), is Deputy Treasurer
of the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
MATTHEW N. KARSTETTER ( 38 ), Deputy Treasurer (1998), is Deputy
Treasurer of the Fidelity funds and is an employee of FMR (1998).
Before joining FMR, Mr. Karstetter served as Vice President of
Investment Accounting and Treasurer of IDS Mutual Funds at American
Express Financial Advisors (1996-1998). Prior to 1996, Mr. Karstetter
was Vice President, Mutual Fund Services at State Street Bank & Trust
(1991-1996).
JOHN H. COSTELLO ( 53 ), Assistant Treasurer, is an employee of
FMR.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended March 31, 2000 , or
calendar year ended December 31, 1999 , as applicable.
Compensation Table
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM A Edward C. Johnson 3d** Abigail P. Johnson ** Ralph F. Cox Phyllis Burke Davis Robert M. Gates
FUND
Freedom IncomeB $ $ $ $ $
Freedom 2000B $ $ $ $ $
Freedom 2010B $ $ $ $ $
Freedom 2020B $ $ $ $ $
Freedom 2030B $ $ $ $ $
TOTAL COMPENSATION
FROM THE $ $ $ 217,500 $ 211,500 $ 217,500
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
AGGREGATE COMPENSATION
FROM A E. Bradley Jones **** Donald J. Kirk Ned C. Lautenbach*** Peter S. Lynch** William O. McCoy
FUND
Freedom IncomeB $ $ $ $ $
Freedom 2000B $ $ $ $ $
Freedom 2010B $ $ $ $ $
Freedom 2020B $ $ $ $ $
Freedom 2030B $ $ $ $ $
TOTAL COMPENSATION
FROM THE $217,500 $ 217,500 $ 54,000 $ 0 $ 214,000
FUND COMPLEX*,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AGGREGATE COMPENSATION FROM A Gerald C. Mc- Donough Marvin L. Mann Robert C. Pozen** Thomas R. Williams
FUND
Freedom IncomeB $ $ $ $
Freedom 2000B $ $ $ $
Freedom 2010B $ $ $ $
Freedom 2020B $ $ $ $
Freedom 2030B $ $ $ $
TOTAL COMPENSATION FROM THE $ 269,000 $ 217,500 $ 0 $ 213,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1999 for 236
funds in the complex.
** Interested Trustees of the funds and Ms. Johnson are compensated by
FMR.
*** During the period from October 14, 1999 through December 31,
1999, Mr. Lautenbach served as a Member of the Advisory Board.
Effective January 1, 2000, Mr. Lautenbach serves as a Member of the
Board of Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1999 , the Trustees accrued
required deferred compensation from the funds as follows: Ralph F.
Cox, $75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000;
E. Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,735; William O. McCoy, $53,735; and
Thomas R. Williams, $62,319.
B Compensation figures include cash , and may include amounts
required to be deferred and amounts deferred at the election of
Trustees.
[C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $__; Phyllis Burke Davis, $__;
Robert M. Gates, $__; Donald J. Kirk, $__; William O. McCoy, $__;
Gerald C. McDonough, $__; Marvin L. Mann, $__; and Thomas R. Williams,
$__.]
[D Certain of the non-interested Trustees' aggregate compensation from
a fund includes accrued voluntary deferred compensation as follows:
[trustee name, dollar amount of deferred compensation, fund name];
[trustee name, dollar amount of deferred compensation, fund name]; and
[trustee name, dollar amount of deferred compensation, fund name].]
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are subject to vesting and are treated as though equivalent
dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.
[As of March 31, 2000, approximately __% of Freedom Fund's total
outstanding shares was held by [FMR] [[and] [an] FMR affiliate[s]].
FMR Corp. is the ultimate parent company of [FMR] [[and] [this/these]
FMR affiliate[s]]. By virtue of their ownership interest in FMR Corp.,
as described in the "Control of Investment Advisers" section on page
22, Mr. Edward C. Johnson 3d, President and Trustee of the fund,
and Ms. Abigail P. Johnson. Member of the Advisory Board of the
fund, may be deemed to be a beneficial owner of these shares. As of
the above date, with the exception of Mr. Johnson 3d's and Ms.
Johnson's deemed ownership of Freedom Funds' shares, the Trustees,
Members of the Advisory Board, and officers of the funds owned, in the
aggregate, less than __% of each fund's total outstanding shares.]
[As of March 31, 2000, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than __% of
each fund's total outstanding shares.]
[As of March 31, 2000, the following owned of record or beneficially
5% or more (up to and including 25%) of each fund's outstanding
shares:]
[As of March 31, 2000, approximately ____% of ___________'s total
outstanding shares were held by ___________; approximately ___% of
___________'s total outstanding shares were held by ___________; and
approximately ___% of ___________'s total outstanding shares were held
by ___________.]
[A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.]
CONTROL OF INVESTMENT ADVISERS
FMR Corp., organized in 1972, is the ultimate parent company of FMR
and Strategic Advisers. The voting common stock of FMR Corp. is
divided into two classes. Class B is held predominantly by members of
the Edward C. Johnson 3d family and is entitled to 49% of the vote on
any matter acted upon by the voting common stock. Class A is held
predominantly by non-Johnson family member employees of FMR Corp. and
its affiliates and is entitled to 51% of the vote on any such matter.
The Johnson family group and all other Class B shareholders have
entered into a shareholders' voting agreement under which all Class B
shares will be voted in accordance with the majority vote of Class B
shares. Under the 1940 Act, control of a company is presumed where one
individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the 1940 Act, to
form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
The funds, FMR, Strategic Advisers, and FDC have adopted a code of
ethics under Rule 17j-1 of the 1940 Act that sets forth employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing, and restricts certain transactions. Employees
subject to the code of ethics, including Fidelity investment
personnel, may invest in securities for their own investment accounts,
including securities that may be purchased or held by the funds.
MANAGEMENT CONTRACTS
Each Freedom Fund has entered into a management contract with
Strategic Advisers, pursuant to which Strategic Advisers furnishes
investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, Strategic Advisers acts as investment adviser and, subject
to the supervision of the Board of Trustees, directs the investments
of the fund in accordance with its investment objective, policies and
limitations. Strategic Advisers is authorized, in its discretion, to
allocate each fund's assets among the underlying Fidelity funds in
which the fund may invest. Strategic Advisers also provides each fund
with all necessary office facilities and personnel for servicing the
fund's investments and compensates all personnel of each fund or
Strategic Advisers performing services relating to research,
statistical and investment activities.
Strategic Advisers in turn has entered into administration agreements
with FMR on behalf of each Freedom Fund. Under the terms of each
administration agreement, FMR or its affiliates provide the management
and administrative services (other than investment advisory services)
necessary for the operation of each Freedom Fund. These services
include providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state laws; developing management and
shareholder services for each fund; and furnishing reports,
evaluations and analyses on a variety of subjects to the Trustees.
MANAGEMENT-RELATED EXPENSES. Under the terms of each Freedom Fund's
management contract, Strategic Advisers, either itself or through an
affiliate, is responsible for payment of all operating expenses of
each Freedom Fund with certain exceptions. Under the terms of each
administration agreement, FMR pays all management and administrative
expenses (other than investment advisory expenses) for which Strategic
Advisers is responsible. Specific expenses payable by FMR include
expenses for typesetting, printing, and mailing proxy materials to
shareholders, legal expenses, fees of the custodian and auditor, and
each fund's proportionate share of insurance premiums and Investment
Company Institute dues. Each administration agreement further provides
that FMR will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of each Freedom Fund's transfer
agent agreement, the transfer agent bears the costs of providing these
services to existing shareholders. In addition, FMR compensates all
officers of each fund and all Trustees who are "interested persons" of
the trust, Strategic Advisers, or FMR. FMR also pays all fees
associated with transfer agent, dividend disbursing, and shareholder
services, pricing and bookkeeping services, and the cost of
administration of each Freedom Fund's securities lending program.
Each Freedom Fund pays the following expenses: fees and expenses of
the non-interested Trustees, interest on borrowings, taxes, brokerage
commissions (if any), shareholder charges (if any) associated with
investing in the underlying Fidelity funds, and such nonrecurring
expenses as may arise, including costs of any litigation to which a
fund may be a party, and any obligation it may have to indemnify the
officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of Strategic Advisers under each
management contract, each Freedom Fund pays Strategic Advisers a
monthly management fee at the annual rate of 0.10% of its average net
assets throughout the month. The management fee paid to Strategic
Advisers by each Freedom Fund is reduced by an amount equal to the
fees and expenses paid by each Freedom Fund to the non-interested
Trustees.
For the services of FMR under each administration agreement, Strategic
Advisers pays FMR a monthly administration fee equal to the monthly
management fee received by Strategic Advisers from each Freedom Fund,
minus an amount equal to an annual rate of 0.02% of that fund's
average net assets throughout the month.
The following table shows the amount of management fees paid by each
Freedom Fund to Strategic Advisers for the past three fiscal years,
and the amount of credits reducing management fees for each fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fund Fiscal Years Ended March 31 Amount of Credits Reducing Management Fees Paid to
Management Fees Strategic Advisers
Freedom Income 2000 $ $ *
1999 $ $ *
1998 $ $ *
Freedom 2000 2000 $ $ *
1999 $ $ *
1998 $ $ *
Freedom 2010 2000 $ $ *
1999 $ $ *
1998 $ $ *
Freedom 2020 2000 $ $ *
1999 $ $ *
1998 $ $ *
Freedom 2030 2000 $ $ *
1999 $ $ *
1998 $ $ *
</TABLE>
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
Strategic Advisers may, from time to time, voluntarily reimburse all
or a portion of a Freedom Fund's operating expenses (exclusive of
interest, taxes, brokerage commissions, shareholder charges, and
extraordinary expenses), which is subject to revision or
discontinuance . Strategic Advisers retains the ability to be
repaid for these expense reimbursements in the amount that expenses
fall below the limit prior to the end of the fiscal year.
Expense reimbursements by Strategic Advisers will increase each
Freedom Fund's returns and yield and repayment of the reimbursement by
each fund will lower its returns and yield.
Strategic Advisers voluntarily agreed to reimburse each Freedom Fund
if and to the extent that its aggregate operating expenses, including
management fees, were in excess of an annual rate of its average net
assets. The table below shows the periods of reimbursement and levels
of expense limitations; the dollar amount of management fees incurred
under each fund's contract before reimbursement; and the dollar amount
of management fees reimbursed by Strategic Advisers under the expense
reimbursement for each period.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Years Ended March 31 Management Fee Before Amount of Management Fee
Reimbursement Reimbursement
Freedom Income 2000 $ * $
1999 $ * $
1998 $ * $
Freedom 2000 2000 $ * $
1999 $ * $
1998 $ * $
Freedom 2010 2000 $ * $
1999 $ * $
1998 $ * $
Freedom 2020 2000 $ * $
1999 $ * $
1998 $ * $
Freedom 2030 2000 $ * $
1999 $ * $
1998 $ * $
</TABLE>
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
DISTRIBUTION SERVICES
Each Freedom Fund has entered into a distribution agreement with
Fidelity Distributors Corporation (FDC), an affiliate of Strategic
Advisers and FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered at NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by Strategic
Advisers or FMR.
The Trustees have approved a Distribution and Service Plan on behalf
of each Freedom Fund (the Plans) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the Freedom Funds, Strategic
Advisers and FMR to incur certain expenses that might be considered to
constitute indirect payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the Freedom
Funds to Strategic Advisers, or the payment of administration fees by
Strategic Advisers to FMR out of the management fees, is deemed to be
indirect financing by the fund of the distribution of its shares, such
payment is authorized by the Plan. Each Plan specifically recognizes
that Strategic Advisers or FMR may use its past profits or its other
resources, including management fees paid to Strategic Advisers by the
funds, or administration fees paid to FMR by Strategic Advisers out of
the management fees, to pay FDC for expenses incurred in connection
with providing services intended to result in the sale of Freedom Fund
shares and/or shareholder support services. In addition, each Plan
provides that Strategic Advisers or FMR, directly or through FDC, may
pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for the Freedom Funds.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the Freedom Funds and its shareholders. In particular, the
Trustees noted that each Plan does not authorize payments by the
Freedom Funds other than those made to Strategic Advisers under its
management contract with each fund. To the extent that each Plan gives
Strategic Advisers, FMR and FDC greater flexibility in connection with
the distribution of fund shares, additional sales of fund shares or
stabilization of cash flows may result. Furthermore, certain
shareholder support services may be provided more effectively under
the Plans by local entities with whom shareholders have other
relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the
business of underwriting, selling or distributing securities. FDC
believes that the Glass-Steagall Act should not preclude a bank from
performing shareholder support services, or servicing and
recordkeeping functions. FDC intends to engage banks only to perform
such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks, as well
as further judicial or administrative decisions or interpretations,
could prevent a bank from continuing to perform all or a part of the
contemplated services. If a bank were prohibited from so acting, the
Trustees would consider what actions, if any, would be necessary to
continue to provide efficient and effective shareholder services. In
such event, changes in the operation of the funds might occur,
including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not
expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. In addition,
state securities laws on this issue may differ from the
interpretations of federal law expressed herein, and banks and other
financial institutions may be required to register as dealers pursuant
to state law.
Each Freedom Fund may execute portfolio transactions with, and
purchase securities issued by, depository institutions that receive
payments under the Plans. No preference for the instruments of such
depository institutions will be shown in the selection of investments.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
TRANSFER AND SERVICE AGENT AGREEMENTS
Each Freedom Fund has entered into a transfer agent agreement with
Fidelity Investments Institutional Operations Company, Inc. (FIIOC),
an affiliate of Strategic Advisers and FMR. Under the terms of the
agreements, FIIOC performs transfer agency, dividend disbursing, and
shareholder services for each Freedom Fund.
For providing transfer agency services, FIIOC receives no fees from
each Freedom Fund; however, each underlying Fidelity fund pays its
respective transfer, dividend disbursing, and shareholder servicing
agent (either FIIOC or an affiliate of FIIOC) fees based, in part, on
the number of accounts in and assets of each Freedom Fund invested in
such underlying Fidelity fund.
FIIOC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FIIOC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
Each Freedom Fund has also entered into a service agent agreement with
FSC, an affiliate of Strategic Advisers and FMR. Under the terms of
the agreements, FSC calculates the NAV and dividends for each Freedom
Fund, maintains each Freedom Fund's portfolio and general accounting
records, and administers each Freedom Fund's securities lending
program.
For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each Freedom Fund's average daily net assets throughout
the month.
For administering each Freedom Fund's securities lending program, FSC
is paid based on the number and duration of individual
securities loans.
FMR bears the cost of pricing and bookkeeping services and
administration of the securities lending program under the terms of
its administration agreements with Strategic Advisers.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. The Freedom Funds are funds of Fidelity Aberdeen
Street Trust, an open-end management investment company organized as a
Delaware business trust on June 20, 1991. Currently, there are five
funds in Fidelity Aberdeen Street Trust: Fidelity Freedom Income Fund,
Fidelity Freedom 2000 Fund, Fidelity Freedom 2010 Fund, Fidelity
Freedom 2020 Fund and Fidelity Freedom 2030 Fund. The Trustees are
permitted to create additional funds in the trust and to create
additional classes of the funds .
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund. Any general expenses of the trust
shall be allocated between or among any one or more of the funds.
SHAREHOLDER LIABILITY. Each trust is a business trust organized under
Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some
states, however, may decline to apply Delaware law on this point. The
Trust Instrument contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
trust. The Trust Instrument provides that the trust shall not have any
claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees
relating to the trust or to a fund shall include a provision limiting
the obligations created thereby to the trust or to one or more funds
and its or their assets. The Trust Instrument further provides that
shareholders of a fund shall not have a claim on or right to any
assets belonging to any other fund.
The Trust Instrument provides for indemnification out of each fund's
property of any shareholder or former shareholder held personally
liable for the obligations of the fund solely by reason of his or her
being or having been a shareholder and not because of his or her acts
or omissions or for some other reason. The Trust Instrument also
provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and a fund is
unable to meet its obligations. Strategic Advisers believes that, in
view of the above, the risk of personal liability to shareholders is
extremely remote.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. [As a shareholder, you are entitled to one vote for each
dollar of net asset value you own.][As a shareholder, you are
entitled to one vote for each share that you own .] The voting
rights of shareholders can be changed only by a shareholder vote.
Shares may be voted in the aggregate, by fund , and by class.
The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.
On matters submitted for consideration by shareholders of any
underlying Fidelity fund, a Freedom Fund will vote its shares in
proportion to the vote of all other holders of shares of that
underlying Fidelity Fund or, in certain limited instances, the Freedom
Fund will vote its shares in the manner indicated by a vote of its
shareholders.
The trust or a fund or a class may be terminated upon the sale
of its assets to , or merger with, another open-end management
investment company , series, or class thereof, or upon
liquidation and distribution of its assets. Generally , the merger
of the trust or a fund or a class with another operating mutual fund
or the sale of all or a portion of the assets of the trust or a fund
or a class to another operating mutual fund requres approval by a
vote of shareholders of the trust or the fund or the class.
However, the Trustees may, without prior shareholder
approval , authorize a transfer of all assets of a Freedom Fund
with a target retirement date into Freedom Income Fund, or any
successor thereto , or reorganize or terminate the trust or a fund
or a class . In the event of the dissolution or liquidation of the
trust, shareholders of each of its funds are entitled to receive the
underlying assets of such fund available for distribution. In the
event of the dissolution or liquidation of a fund or a class ,
shareholders of that fund or that class are entitled to receive
the underlying assets of the fund or class available for
distribution.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New
York, is custodian of the assets of each fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any subcustodian banks and clearing agencies. The Chase Manhattan
Bank, headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and members
of the Board of Trustees may, from time to time, conduct transactions
with various banks, including banks serving as custodians for certain
funds advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITOR. ___________________________, serves as independent accountant
for each fund. The auditor examines financial statements for the funds
and provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal year ended March 31, 2000 , and report of the auditor,
are included in the funds' annual report and are incorporated herein
by reference.
APPENDIX
Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus,
Fidelity Investments , and Magellan are registered trademarks of
FMR Corp.
Fidelity Freedom Funds, Fidelity Freedom Income Fund, Fidelity Freedom
2000 Fund, Fidelity Freedom 2010 Fund, Fidelity Freedom 2020 Fund,
Fidelity Freedom 2030 Fund, and Spartan are registered service marks
of FMR Corp.
THE THIRD PARTY MARKS APPEARING ABOVE ARE THE MARKS OF THEIR
RESPECTIVE OWNERS.
PART C. OTHER INFORMATION
Item 23. Exhibits
(a)(1) Amended and Restated Trust Instrument, dated December 16, 1999,
is filed herein as Exhibit (a)(1).
(b) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity Union
Street Trust II's (File No. 33-43757) Post-Effective Amendment No. 10.
(c) Not applicable.
(d)(1) Management Contract between the Registrant, on behalf of
Fidelity Freedom 2030 Fund and Strategic Advisers, Inc., is
incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 18.
(2) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2020 Fund and Strategic Advisers, Inc., is incorporated herein
by reference to Exhibit 5(b) of Post-Effective Amendment No. 18.
(3) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2010 Fund and Strategic Advisers, Inc., is incorporated herein
by reference to Exhibit 5(c) of Post-Effective Amendment No. 18.
(4) Management Contract between the Registrant, on behalf of Fidelity
Freedom 2000 Fund and Strategic Advisers, Inc., is incorporated herein
by reference to Exhibit 5(d) of Post-Effective Amendment No. 18.
(5) Management Contract between the Registrant, on behalf of Fidelity
Freedom Income Fund and Strategic Advisers, Inc., is incorporated
herein by reference to Exhibit 5(e) of Post-Effective Amendment No.
18.
(6) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2030 Fund
is incorporated herein by reference to Exhibit 5(f) of Post-Effective
Amendment No. 18.
(7) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2020 Fund
is incorporated herein by reference to Exhibit 5(g) of Post-Effective
Amendment No. 18.
(8) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2010 Fund
is incorporated herein by reference to Exhibit 5(h) of Post-Effective
Amendment No. 18.
(9) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom 2000 Fund
is incorporated herein by reference to Exhibit 5(i) of Post-Effective
Amendment No. 18.
(10) Administration Agreement between Strategic Advisers, Inc. and
Fidelity Management & Research Company for Fidelity Freedom Income
Fund is incorporated herein by reference to Exhibit 5(j) of
Post-Effective Amendment No. 18.
(e)(1) General Distribution Agreement between the Registrant, on
behalf of Fidelity Freedom 2030 Fund, and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(a) of
Post-Effective Amendment No. 18.
(2) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2020 Fund, and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 6(b) of Post-Effective
Amendment No. 18.
(3) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2010 Fund, and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 6(c) of Post-Effective
Amendment No. 18.
(4) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom 2000 Fund, and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 6(d) of Post-Effective
Amendment No. 18.
(5) General Distribution Agreement between the Registrant, on behalf
of Fidelity Freedom Income Fund, and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 6(e) of Post-Effective
Amendment No. 18.
(f)(1) The Fee Deferral Plan for Non-Interested Persons Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Post-Effective Amendment No. 19.
(g)(1) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and the Registrant are incorporated
herein by reference to Exhibit 8(a) of Fidelity Hereford Street
Trust's (File No. 33-52577) Post-Effective Amendment No. 4.
(2) Appendix A, dated June 23, 1999, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the
Registrant is incorporated herein by reference to Exhibit (g)(2) of
Fidelity Money Market Trust's (File No. 2-62417) Post-Effective
Amendment No. 61.
(3) Appendix B, dated March 18, 1999, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the
Registrant is incorporated herein by reference to Exhibit (g)(3) of
Fidelity Hereford Street Trust's (File No. 33-52577) Post-Effective
Amendment No. 12.
(4) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the
Registrant, is incorporated herein by reference to Exhibit (g)(4) of
Fidelity Hereford Street Trust's (File No. 33-52577) Post-Effective
Amendment No. 12.
(5) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and the Registrant, dated
February 12, 1996, is incorporated herein by reference to Exhibit 8(d)
of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(6) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and the Registrant, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(7) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November
13, 1995, is incorporated herein by reference to Exhibit 8(f) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(8) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and the Registrant, dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(g) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(9) Joint Trading Account Custody Agreement between The Bank of
New York and the Registrant, dated May 11, 1995, is incorporated
herein by reference to Exhibit 8(h) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No. 31.
(10) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and the Registrant, dated July 14, 1995,
is incorporated herein by reference to Exhibit 8(i) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable
(k) Not applicable.
(l) Not applicable.
(m)(1) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2030 Fund is incorporated herein by reference to
Exhibit m(1) of Post-Effective Amendment No. 22.
(2) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2020 Fund is incorporated herein by reference to
Exhibit m(2) of Post-Effective Amendment No. 22.
(3) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2010 Fund is incorporated herein by reference to
Exhibit m(3) of Post-Effective Amendment No. 22.
(4) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom 2000 Fund is incorporated herein by reference to
Exhibit m(4) of Post-Effective Amendment No. 22.
(5) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Freedom Income Fund is incorporated herein by reference to
Exhibit m(5) of Post-Effective Amendment No. 22.
(n) Not applicable.
(o) Not applicable.
(p)(1) Code of Ethics, dated January 1, 2000, adopted by each
fund, Fidelity Management & Research Company, Strategic
Advisers, and Fidelity Distributors Corporation pursuant to Rule 17j-1
is filed herein as Exhibit (p)(1).
Item 24. Trusts Controlled by or under Common Control with this Trust
The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.
Item 25. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and
all claims and demands whatsoever. Article X, Section 10.02 of the
Trust Instrument sets forth the reasonable and fair means for
determining whether indemnification shall be provided to any past or
present Trustee or officer. It states that the Trust shall indemnify
any present or past trustee or officer to the fullest extent permitted
by law against liability, and all expenses reasonably incurred by him
or her in connection with any claim, action, suit or proceeding in
which he or she is involved by virtue of his or her service as a
trustee or officer and against any amount incurred in settlement
thereof. Indemnification will not be provided to a person adjudged by
a court or other adjudicatory body to be liable to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of
the Trust. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the
Trust Instrument, that the officer or trustee did not engage in
disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names FIIOC
and/or the Registrant as a party and is not based on and does not
result from FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with
FIIOC's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence
or reckless disregard of duties) which results from the negligence of
the Registrant, or from FIIOC's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of FIIOC's
acting in reliance upon advice reasonably believed by FIIOC to have
been given by counsel for the Registrant, or as a result of FIIOC's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 26. Business and Other Connections of Investment Advisers
(1) STRATEGIC ADVISERS, INC.
82 Devonshire Street, Boston, MA 02109
Strategic Advisers, Inc. serves as investment adviser to the Fidelity
Freedom Funds and provides investment supervisory services to
individuals, banks, thrifts, pension and profit sharing plans, trusts,
estates, charitable organizations, corporations, and other business
organizations, and provides a variety of publications on investment
and personal finance. The directors and officers of Strategic
Advisers have held, during the past two fiscal years, the following
positions of a substantial nature.
William V. Harlow III President, Chief Investment
Officer, and Director of
Strategic Advisers, Inc.
Robert M. Gervis Chief Administrative Officer,
Managing Diretor, and
Director of Strategic
Advisers, Inc.
Roger T. Servison Director of Strategic
Advisers, Inc.; Director of
Fidelity Brokerage Services,
Inc.
Robert C. Pozen Director of Strategic
Advisers, Inc.; President
and Director of Fidelity
Management & Research
Company (FMR); Senior Vice
President and Trustee of
funds advised by FMR;
President and Director of
Fidelity Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), Fidelity Management &
Research Co., Inc. (FMRC),
and Fidelity Management &
Research (Far East) Inc.
(FMR Far East); Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.
Donald E. Alhart Vice President of Crosby
Advisors of Strategic
Advisers, Inc.
Amy F. Barnwell Vice President of Charitable
Advisory Services of
Strategic Advisers, Inc.
G. Robert Bristow Vice President of Strategic
Advisers, Inc.
Michael B. Fox Vice President and Treasurer
of Strategic Advisers, Inc.;
Assistant Treasurer of FMR,
FIMM, FMR U.K., and FMR Far
East; Vice President of FMR
U.K., FMR Far East and FIMM;
Vice President and Treasurer
of FMR Corp.
Alice Lowenstein Vice President of Strategic
Advisers, Inc.
Michele A. Stecyk Vice President of Strategic
Advisers, Inc.
Geoff Stein Vice President of Strategic
Advisers, Inc.
Gary Greenstein Assistant Treasurer of
Strategic Advisers, Inc.;
Vice President of Taxation
for FMR Corp.
Joseph T. Castro Compliance Officer of
Strategic Advisers, Inc.
Jay Freedman Clerk of Strategic Advisers,
Inc.; Vice President Deputy
General Counsel FMR Corp.;
Assistant Clerk of FMR;
Clerk of FMR Corp., FMR
U.K., FMRC, and FMR Far
East; Secretary of FIMM.
Susan Shields-Arcelay Assistant Clerk of Strategic
Advisers, Inc.
Page Pennell Assistant Clerk of Strategic
Advisers, Inc.
Susan Englander Hislop Assistant Clerk of Strategic
Advisers, Inc., FMR U.K.,
and FMR Far East; Assistant
Secretary of FIMM.
Item 27. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Fund
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
James Curvey Director None
Martha B. Willis President None
Eric D. Roiter Vice President Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 28. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Fidelity Service
Company, Inc. or Fidelity Investments Institutional Operations
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
custodian, The Bank of New York, 110 Washington Street, New York, NY.
Item 29. Management Services
Not applicable.
Item 30. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 23 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the eighth
day of March 2000.
Fidelity Aberdeen Street Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/Edward C. Johnson 3d(dagger) President and Trustee March 8, 2000
Edward C. Johnson 3d (Principal Executive Officer)
/s/Robert A. Dwight Treasurer March 8, 2000
Robert A. Dwight
/s/Robert C. Pozen Trustee March 8, 2000
Robert C. Pozen
/s/Ralph F. Cox* Trustee March 8, 2000
Ralph F. Cox
/s/Phyllis Burke Davis* Trustee March 8, 2000
Phyllis Burke Davis
/s/Robert M. Gates* Trustee March 8, 2000
Robert M. Gates
/s/Donald J. Kirk* Trustee March 8, 2000
Donald J. Kirk
/s/Ned C. Lautenbach* Trustee March 8, 2000
Ned C. Lautenbach
/s/Peter S. Lynch* Trustee March 8, 2000
Peter S. Lynch
/s/Marvin L. Mann* Trustee March 8, 2000
Marvin L. Mann
/s/William O. McCoy* Trustee March 8, 2000
William O. McCoy
/s/Gerald C. McDonough* Trustee March 8, 2000
Gerald C. McDonough
/s/Thomas R. Williams* Trustee March 8, 2000
Thomas R. Williams
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 16, 1999 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash
Fidelity Advisor Series III Portfolios
Fidelity Advisor Series IV Fidelity Institutional
Fidelity Advisor Series V Tax-Exempt Cash Portfolios
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts
Fidelity Beacon Street Trust Municipal Trust
Fidelity Boston Street Trust Fidelity Money Market Trust
Fidelity California Municipal Fidelity Mt. Vernon Street
Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust
Fidelity Commonwealth Trust Fidelity New York Municipal
Fidelity Concord Street Trust Trust II
Fidelity Congress Street Fund Fidelity Phillips Street Trust
Fidelity Contrafund Fidelity Puritan Trust
Fidelity Corporate Trust Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Daily Money Fund Fidelity Sterling Performance
Fidelity Destiny Portfolios Portfolio, L.P.
Fidelity Deutsche Mark Fidelity Summer Street Trust
Performance Fidelity Trend Fund
Portfolio, L.P. Fidelity U.S.
Fidelity Devonshire Trust Investments-Bond Fund, L.P.
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Government
Fidelity Fixed-Income Trust Securities
Fidelity Government Fund, L.P.
Securities Fund Fidelity Union Street Trust
Fidelity Hastings Street Trust Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
Colchester Street Trust Fidelity Hastings Street Trust
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional
Fidelity Advisor Series III Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts
Fidelity Advisor Series VII Municipal Trust
Fidelity Advisor Series VIII Fidelity Money Market Trust
Fidelity Beacon Street Trust Fidelity Mt. Vernon Street
Fidelity Boston Street Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust Fidelity Municipal Trust II
Fidelity California Municipal Fidelity New York Municipal
Trust II Trust
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust II
Fidelity Commonwealth Trust Fidelity Oxford Street Trust
Fidelity Concord Street Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Destiny Portfolios Fidelity Summer Street Trust
Fidelity Devonshire Trust Fidelity Trend Fund
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Bond Fund, L.P.
Fidelity Fixed-Income Trust Fidelity U.S.
Fidelity Government Investments-Government
Securities Fund Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 2000.
WITNESS our hands on this sixteenth day of December, 1999.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/Ralph F. Cox /s/William O. McCoy
Ralph F. Cox William O. McCoy
/s/Phyllis Burke Davis /s/Gerald C. McDonough
Phyllis Burke Davis Gerald C. McDonough
/s/Ned C. Lautenbach /s/Marvin L. Mann
Ned C. Lautenbach Marvin L. Mann
/s/Donald J. Kirk /s/Thomas R. Williams
Donald J. Kirk Thomas R. Williams
/s/Robert C. Pozen /s/Robert M. Gates
Robert C. Pozen Robert M. Gates
AMENDED AND RESTATED TRUST INSTRUMENT
FIDELITY ABERDEEN STREET TRUST
AMENDED AND RESTATED TRUST INSTRUMENT, made December 16, 1999 by each
of the Trustees whose signature is affixed hereto (the "Trustees").
WHEREAS, the Trustees desire to amend and restate this Trust
Instrument for the sole purpose of supplementing the Trust Instrument
to incorporate amendments duly adopted; and
WHEREAS, this Trust was initially made on June 20, 1991 by Edward C.
Johnson 3d, J. Gary Burkhead and John E. Ferris in order to establish
a trust for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust
under this Amended and Restated Trust Instrument as herein set forth
below.
_________________________________________________
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1.01. The name of the trust created hereby is the "Fidelity
Aberdeen Street Trust."
DEFINITIONS.
Section 1.02. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) "Bylaws" means the Bylaws referred to in Article IV, Section
4.01(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940 Act.
The terms "Affiliated Person," "Assignment," "Interested Person" and
"Principal Underwriter" shall have the meanings given them in the 1940
Act, as modified by or interpreted by any applicable order or orders
of the Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder. "Majority Shareholder Vote"
shall have the same meaning as the term "vote of a majority of the
outstanding voting securities" is given in the 1940 Act, as modified
by or interpreted by any applicable order or orders of the Commission
or any rules or regulations adopted or interpretive releases of the
Commission thereunder;
(c) The "Delaware Act" refers to Chapter 38 of Title 12 of the
Delaware Code entitled "Treatment of Delaware Business Trusts," as it
may be amended from time to time;
(d) "Net Asset Value" means the net asset value of each Series of the
Trust determined in the manner provided in Article IX, Section 9.03
hereof;
(e) "Outstanding Shares" means those Shares shown from time to time
in the books of the Trust or its Transfer Agent as then issued and
outstanding, but shall not include Shares which have been redeemed or
repurchased by the Trust and which are at the time held in the
treasury of the Trust;
(f) "Series" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.06 hereof;
(g) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(h) "Shares" means the equal proportionate transferable units of
beneficial interest into which the beneficial interest of each Series
of the Trust or class thereof shall be divided and may include
fractions of Shares as well as whole Shares;
(i) The "Trust" refers to Fidelity Aberdeen Street Trust and
reference to the Trust, when applicable to one or more Series of the
Trust, shall refer to any such Series;
(j) The "Trustees" means the person or persons who has or have signed
this Trust Instrument, so long as he or they shall continue in office
in accordance with the terms hereof, and all other persons who may
from time to time be duly qualified and serving as Trustees in
accordance with the provisions of Article III hereof and reference
herein to a Trustee or to the Trustees shall refer to the individual
Trustees in their capacity as Trustees hereunder;
(k) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of one or more of the Trust or any Series, or the Trustees on behalf
of the Trust or any Series; and
(l) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 2.01. The beneficial interest in the Trust shall be divided
into such transferable Shares of one or more separate and distinct
Series or classes of a Series as the Trustees shall from time to time
create and establish. The number of Shares of each Series, and class
thereof, authorized hereunder is unlimited. Each Share shall have no
par value. All Shares issued hereunder, including without limitation,
Shares issued in connection with a dividend in Shares or a split or
reverse split of Shares, shall be fully paid and nonassessable.
ISSUANCE OF SHARES
Section 2.02. The Trustees in their discretion may, from time to
time, without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or
securities, at such time or times and on such terms as the Trustees
may deem appropriate, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection
with, the assumption of liabilities) and businesses. In connection
with any issuance of Shares, the Trustees may issue fractional Shares
and Shares held in the treasury. The Trustees may from time to time
divide or combine the Shares into a greater or lesser number without
thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be
redeemed as, whole Shares and/or 1/1,000th of a Share or integral
multiples thereof.
REGISTER OF SHARES AND SHARE CERTIFICATES
Section 2.03. A register shall be kept at the principal office of the
Trust or an office of the Trust's transfer agent which shall contain
the names and addresses of the Shareholders of each Series, the number
of Shares of that Series (or any class or classes thereof) held by
them respectively and a record of all transfers thereof. As to Shares
for which no certificate has been issued, such register shall be
conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or other distributions or otherwise to
exercise or enjoy the rights of Shareholders. No Shareholder shall be
entitled to receive payment of any dividend or other distribution, nor
to have notice given to him as herein or in the Bylaws provided, until
he has given his address to the transfer agent or such other officer
or agent of the Trustees as shall keep the said register for entry
thereon. The Trustees, in their discretion, may authorize the issuance
of share certificates and promulgate appropriate rules and regulations
as to their use. Such certificates may be issuable for any purpose
limited in the Trustees discretion. In the event that one or more
certificates are issued, whether in the name of a shareholder or a
nominee, such certificate or certificates shall constitute evidence of
ownership of Shares for all purposes, including transfer, assignment
or sale of such Shares, subject to such limitations as the Trustees
may, in their discretion, prescribe.
TRANSFER OF SHARES
Section 2.04. Except as otherwise provided by the Trustees, Shares
shall be transferable on the records of the Trust only by the record
holder thereof or by his agent thereunto duly authorized in writing,
upon delivery to the Trustees or the Trust's transfer agent of a duly
executed instrument of transfer, together with a Share certificate, if
one is outstanding, and such evidence of the genuineness of each such
execution and authorization and of such other matters as may be
required by the Trustees. Upon such delivery the transfer shall be
recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares
for all purposes hereunder and neither the Trustees nor the Trust, nor
any transfer agent or registrar nor any officer, employee or agent of
the Trust shall be affected by any notice of the proposed transfer.
TREASURY SHARES
Section 2.05. Shares held in the treasury shall, until reissued
pursuant to Section 2.02 hereof, not confer any voting rights on the
Trustees, nor shall such Shares be entitled to any dividends or other
distributions declared with respect to the Shares.
ESTABLISHMENT OF SERIES
Section 2.06. The Trust created hereby shall consist of one or more
Series and separate and distinct records shall be maintained by the
Trust for each Series and the assets associated with any such Series
shall be held and accounted for separately from the assets of the
Trust or any other Series. The Trustees shall have full power and
authority, in their sole discretion, and without obtaining any prior
authorization or vote of the Shareholders of any Series of the Trust,
to establish and designate and to change in any manner any such Series
of Shares or any classes of initial or additional Series and to fix
such preferences, voting powers, rights and privileges of such Series
or classes thereof as the Trustees may from time to time determine, to
divide or combine the Shares or any Series or classes thereof into a
greater or lesser number, to classify or reclassify any issued Shares
or any Series or classes thereof into one or more Series or classes of
Shares, and to take such other action with respect to the Shares as
the Trustees may deem desirable. The establishment and designation of
any Series shall be effective upon the adoption of a resolution by a
majority of the Trustees setting forth such establishment and
designation and the relative rights and preferences of the Shares of
such Series, whether directly in such resolution or by reference to,
or approval of, another document that sets forth such relative rights
and preferences of the Shares of such Series including, without
limitation, any registration statement of the Trust, or as otherwise
provided in such resolution. A Series may issue any number of Shares
and need not issue shares. At any time that there are no Shares
outstanding of any particular Series previously established and
designated, the Trustees may by a majority vote abolish that Series
and the establishment and designation thereof.
All references to Shares in this Trust Instrument shall be deemed to
be Shares of any or all Series, or classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply
equally to each Series of the Trust, and each class thereof, except as
the context otherwise requires.
Each Share of a Series of the Trust shall represent an equal
beneficial interest in the net assets of such Series. Each holder of
Shares of a Series shall be entitled to receive his pro rata share of
distributions of income and capital gains, if any, made with respect
to such Series. Upon redemption of his Shares, such Shareholder shall
be paid solely out of the funds and property of such Series of the
Trust.
INVESTMENT IN THE TRUST
Section 2.07. The Trustees shall accept investments in any Series of
the Trust from such persons and on such terms as they may from time to
time authorize. At the Trustees' discretion, such investments, subject
to applicable law, may be in the form of cash or securities in which
the affected Series is authorized to invest, valued as provided in
Article IX, Section 9.03 hereof. Investments in a Series shall be
credited to each Shareholder's account in the form of full Shares at
the Net Asset Value per Share next determined after the investment is
received; provided, however, that the Trustees may, in their sole
discretion, (a) fix the Net Asset Value per Share of the initial
capital contribution, (b) impose a sales charge or other fee upon
investments in the Trust in such manner and at such time determined by
the Trustees or (c) issue fractional Shares.
ASSETS AND LIABILITIES OF SERIES
Section 2.08. All consideration received by the Trust for the issue
or sale of Shares of a particular Series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held and accounted for
separately from the other assets of the Trust and of every other
Series and may be referred to herein as "assets belonging to" that
Series. The assets belonging to a particular Series shall belong to
that Series for all purposes, and to no other Series, subject only to
the rights of creditors of that Series. In addition, any assets,
income, earnings, profits or funds, or payments and proceeds with
respect thereto, which are not readily identifiable as belonging to
any particular Series shall be allocated by the Trustees between and
among one or more of the Series in such manner as the Trustees, in
their sole discretion, deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series
for all purposes, and such assets, income, earnings, profits or funds,
or payments and proceeds with respect thereto shall be assets
belonging to that Series. The assets belonging to a particular Series
shall be so recorded upon the books of the Trust, and shall be held by
the Trustees in trust for the benefit of the holders of Shares of that
Series. The assets belonging to each particular Series shall be
charged with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series. Any general
liabilities, expenses, costs, charges or reserves of the Trust which
are not readily identifiable as belonging to any particular Series
shall be allocated and charged by the Trustees between or among any
one or more of the Series in such manner as the Trustees in their sole
discretion deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Series for all
purposes. Without limitation of the foregoing provisions of this
Section 2.08, but subject to the right of the Trustees in their
discretion to allocate general liabilities, expenses, costs, charges
or reserves as herein provided, the debts, liabilities, obligations
and expenses incurred, contracted for or otherwise existing with
respect to a particular Series shall be enforceable against the assets
of such Series only, and not against the assets of the Trust
generally. Notice of this limitation on inter-Series liabilities may,
in the Trustee's sole discretion, be set forth in the certificate of
trust of the Trust (whether originally or by amendment) as filed or to
be filed in the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of
Section 3804 of the Delaware Act relating to limitations on
inter-Series liabilities (and the statutory effect under Section 3804
of setting forth such notice in the certificate of trust) shall become
applicable to the Trust and each Series. Any person extending credit
to, contracting with or having any claim against any Series may look
only to the assets of that Series to satisfy or enforce any debt,
liability, obligation or expense incurred, contracted for or otherwise
existing with respect to that Series. No Shareholder or former
Shareholder of any Series shall have a claim on or any right to any
assets allocated or belonging to any other Series.
NO PREEMPTIVE RIGHTS
Section 2.09. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the
Trust or the Trustees, whether of the same or other Series.
PERSONAL LIABILITY OF SHAREHOLDERS
Section 2.10. Each Shareholder of the Trust and of each Series shall
not be personally liable for the debts, liabilities, obligations and
expenses incurred by, contracted for, or otherwise existing with
respect to, the Trust or by or on behalf of any Series. The Trustees
shall have no power to bind any Shareholder personally or to call upon
any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by
or on behalf of the Trust or the Trustees relating to the Trust or to
a Series shall include a recitation limiting the obligation
represented thereby to the Trust or to one or more Series and its or
their assets (but the omission of such a recitation shall not operate
to bind any Shareholder or Trustee of the Trust).
ASSENT TO TRUST INSTRUMENT
Section 2.11. Every Shareholder, by virtue of having purchased a
Share shall become a Shareholder and shall be held to have expressly
assented and agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 3.01. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as
may be permitted by this Trust Instrument. The Trustees shall have
power to conduct the business of the Trust and carry on its operations
in any and all of its branches and maintain offices both within and
without the State of Delaware, in any and all states of the United
States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to
do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of
the Trust although such things are not herein specifically mentioned.
Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the
provisions of this Trust Instrument, the presumption shall be in favor
of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. The powers of the
Trustees may be exercised without order of or resort to any court.
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be
elected by the Shareholders owning of record a plurality of the Shares
voting at a meeting of Shareholders. Such a meeting shall be held on a
date fixed by the Trustees. In the event that less than a majority of
the Trustees holding office have been elected by Shareholders, the
Trustees then in office will call a Shareholders' meeting for the
election of Trustees.
INITIAL TRUSTEES
Section 3.02. The initial Trustees shall be the persons named herein.
On a date fixed by the Trustees, the Shareholders shall elect at least
three but not more than twelve Trustees, as specified by the Trustees
pursuant to Section 3.06 of this Article III.
TERM OF OFFICE OF TRUSTEES
Section 3.03. The Trustees shall hold office during the lifetime of
this Trust, and until its termination as herein provided; except (a)
that any Trustee may resign his trust by written instrument signed by
him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such
removal, specifying the date when such removal shall become effective;
(c) that any Trustee who requests in writing to be retired or who has
died, become physically or mentally incapacitated by reason of disease
or otherwise, or is otherwise unable to serve, may be retired by
written instrument signed by a majority of the other Trustees,
specifying the date of his retirement; and (d) that a Trustee may be
removed at any meeting of the Shareholders of the Trust by a vote of
Shareholders owning at least two-thirds of the outstanding Shares.
VACANCIES AND APPOINTMENT OF TRUSTEES
Section 3.04. In case of the declination to serve, death,
resignation, retirement, removal, physical or mental incapacity by
reason of disease or otherwise, or a Trustee is otherwise unable to
serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled, the other Trustees shall have all the powers
hereunder and the certificate of the other Trustees of such vacancy
shall be conclusive. In the case of an existing vacancy, the remaining
Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit consistent with the limitations
under the 1940 Act. Such appointment shall be evidenced by a written
instrument signed by a majority of the Trustees in office or by
resolution of the Trustees, duly adopted, which shall be recorded in
the minutes of a meeting of the Trustees, whereupon the appointment
shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement,
resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or
after the effective date of said retirement, resignation or increase
in number of Trustees. As soon as any Trustee appointed pursuant to
this Section 3.04 shall have accepted this trust, or at such date as
may be specified in the acceptance whenever made, the trust estate
shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power to appoint a Trustee
pursuant to this Section 3.04 is subject to the provisions of Section
16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 3.05. Any Trustee may, by power of attorney, delegate his
power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as
herein otherwise expressly provided.
NUMBER OF TRUSTEES
Section 3.06. The number of Trustees shall be at least three, and
thereafter shall be such number as shall be fixed from time to time by
a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be more than twelve (12).
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 3.07. The declination to serve, death, resignation,
retirement, removal, incapacity, or inability of the Trustees, or any
one of them, shall not operate to terminate the Trust or to revoke any
existing agency created pursuant to the terms of this Trust
Instrument.
OWNERSHIP OF ASSETS OF THE TRUST
Section 3.08. The assets of the Trust and of each Series shall be
held separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. Legal title in all of the assets of the Trust and
the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the
Trustees may cause legal title to any Trust Property to be held by, or
in the name of the Trust, or in the name of any person as nominee. No
Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Series or any right of
partition or possession thereof, but each Shareholder shall have,
except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or Series. The Shares shall be
personal property giving only the rights specifically set forth in
this Trust Instrument.
ARTICLE IV
POWERS OF THE TRUSTEES
POWERS
Section 4.01. The Trustees in all instances shall act as principals,
and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts
and to make and execute any and all contracts and instruments that
they may consider necessary or appropriate in connection with the
management of the Trust. The Trustees shall not in any way be bound or
limited by present or future laws or customs in regard to trust
investments, but shall have full authority and power to make any and
all investments which they, in their sole discretion, shall deem
proper to accomplish the purpose of this Trust without recourse to any
court or other authority. Subject to any applicable limitation in this
Trust Instrument or the Bylaws of the Trust, the Trustees shall have
power and authority:
(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to
investments by trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the
assets of the Trust;
(b) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct
of such operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging
or otherwise subjecting as security the Trust Property; to endorse,
guarantee, or undertake the performance of an obligation or engagement
of any other Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for
or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Instrument
providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to
the Shareholders; such Bylaws shall be deemed incorporated and
included in this Trust Instrument;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that
are members of a national securities exchange or such other entities
as the Commission may permit as custodians of any assets of the Trust
subject to any conditions set forth in this Trust Instrument or in the
Bylaws;
(h) To retain one or more transfer agents and shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
custodian, underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XI, Section 11.04(b) hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees
shall deem proper, granting to such person or persons such power and
discretion with relation to securities or property as the Trustees
shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable
form; or either in the name of the Trust or in the name of a custodian
or a nominee or nominees, subject in either case to proper safeguards
according to the usual practice of Delaware business trusts or
investment companies;
(o) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish
classes of such Series having relative rights, powers and duties as
they may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular
Series or class thereof or to apportion the same between or among two
or more Series or classes thereof, provided that any liabilities or
expenses incurred by a particular Series or class thereof shall be
payable solely out of the assets belonging to that Series as provided
for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Series or class, and to
require the redemption of the Shares of any Shareholders whose
investment is less than such minimum upon giving notice to such
Shareholder;
(u) To establish one or more committees, to delegate any of the
powers of the Trustees to said committees and to adopt a committee
charter providing for such responsibilities, membership (including
Trustees, officers or other agents of the Trust therein) and any other
characteristics of said committees as the Trustees may deem proper.
Notwithstanding the provisions of this Article IV, and in addition to
such provisions or any other provision of this Trust Instrument or of
the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office,
which committee may be empowered to act for and bind the Trustees and
the Trust, as if the acts of such committee were the acts of all the
Trustees then in office, with respect to the institution, prosecution,
dismissal, settlement, review or investigation of any action, suit or
proceeding which shall be pending or threatened to be brought before
any court, administrative agency or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Series;
(w) Notwithstanding any other provision hereof, to invest all or a
portion of the assets of any series in one or more open-end investment
companies, including investment by means of a transfer of such assets
in an exchange for an interest or interests in such investment company
or companies or by any other method approved by the Trustees;
(x) To establish a registered office and have a registered agent in
the state of Delaware; and
(y) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general powers of the Trustees.
Any action by one or more of the Trustees in their capacity as such
hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to
make any inquiry concerning the authority of the Trustees, or to see
to the application of any payments made or property transferred to the
Trustees or upon their order.
ISSUANCE AND REPURCHASE OF SHARES
Section 4.02. The Trustees shall have the power to issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, and otherwise deal in Shares and, subject to the
provisions set forth in Article II and Article IX, to apply to any
such repurchase, redemption, retirement, cancellation or acquisition
of Shares any funds or property of the Trust, or the particular Series
of the Trust, with respect to which such Shares are issued.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 4.03. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell
or cause to be issued and sold Shares to and buy such Shares from any
such person or any firm or company in which he is interested, subject
only to the general limitations herein contained as to the sale and
purchase of such Shares; and all subject to any restrictions which may
be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 4.04. The Trustees shall act by majority vote at a meeting
duly called or by unanimous written consent without a meeting or by
telephone meeting provided a quorum of Trustees participate in any
such telephone meeting, unless the 1940 Act requires that a particular
action be taken only at a meeting at which the Trustees are present in
person. At any meeting of the Trustees, a majority of the Trustees
shall constitute a quorum. Meetings of the Trustees may be called
orally or in writing by the Chairman of the Board of Trustees or by
any two other Trustees. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the
meeting to each Trustee by telephone, telefax, or telegram sent to his
home or business address at least twenty-four hours in advance of the
meeting or by written notice mailed to his home or business address at
least seventy-two hours in advance of the meeting. Notice need not be
given to any Trustee who attends the meeting without objecting to the
lack of notice or who executes a written waiver of notice with respect
to the meeting. Any meeting conducted by telephone shall be deemed to
take place at the principal office of the Trust, as determined by the
Bylaws or by the Trustees. Subject to the requirements of the 1940
Act, the Trustees by majority vote may delegate to any one or more of
their number their authority to approve particular matters or take
particular actions on behalf of the Trust. Written consents or waivers
of the Trustees may be executed in one or more counterparts. Execution
of a written consent or waiver and delivery thereof to the Trust may
be accomplished by telefax.
CHAIRMAN OF THE TRUSTEES
Section 4.05. The Trustees shall appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all
meetings of the Trustees, shall be responsible for the execution of
policies established by the Trustees and the administration of the
Trust, and may be (but is not required to be) the chief executive,
financial and/or accounting officer of the Trust.
PRINCIPAL TRANSACTIONS
Section 4.06. Except to the extent prohibited by applicable law, the
Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustee or
officer of the Trust or any firm of which any such Trustee or officer
is a member acting as principal, or have any such dealings with any
investment adviser, distributor or transfer agent for the Trust or
with any Interested Person of such person; and the Trust may employ
any such person, or firm or company in which such person is an
Interested Person, as broker, legal counsel, registrar, investment
adviser, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
ARTICLE V
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 5.01. Subject to the provisions of Article II, Section 2.08
hereof, the Trustees shall be reimbursed from the Trust estate or the
assets belonging to the appropriate Series for their expenses and
disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust, interest
expense, taxes, fees and commissions of every kind, expenses of
pricing Trust portfolio securities, expenses of issue, repurchase and
redemption of shares, including expenses attributable to a program of
periodic repurchases or redemptions, expenses of registering and
qualifying the Trust and its Shares under Federal and State laws and
regulations or under the laws of any foreign jurisdiction, charges of
third parties, including investment advisers, managers, custodians,
transfer agents, portfolio accounting and/or pricing agents, and
registrars, expenses of preparing and setting up in type prospectuses
and statements of additional information and other related Trust
documents, expenses of printing and distributing prospectuses sent to
existing Shareholders, auditing and legal expenses, reports to
Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expenses, association membership
dues and for such non-recurring items as may arise, including
litigation to which the Trust (or a Trustee acting as such) is a
party, and for all losses and liabilities by them incurred in
administering the Trust, and for the payment of such expenses,
disbursements, losses and liabilities the Trustees shall have a lien
on the assets belonging to the appropriate Series, or in the case of
an expense allocable to more than one Series, on the assets of each
such Series, prior to any rights or interests of the Shareholders
thereto. This section shall not preclude the Trust from directly
paying any of the aforementioned fees and expenses.
ARTICLE VI
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 6.01. The Trustees may in their discretion, from time to
time, enter into an investment advisory or management contract or
contracts with respect to the Trust or any Series whereby the other
party or parties to such contract or contracts shall undertake to
furnish the Trustees with such management, investment advisory,
statistical and research facilities and services and such other
facilities and services, if any, and all upon such terms and
conditions, as the Trustees may in their discretion determine;
provided, however, that the initial approval and entering into of such
contract or contracts shall be subject to a Majority Shareholder Vote.
Notwithstanding any other provision of this Trust Instrument, the
Trustees may authorize any investment adviser (subject to such general
or specific instructions as the Trustees may from time to time adopt)
to effect purchases, sales or exchanges of portfolio securities, other
investment instruments of the Trust, or other Trust Property on behalf
of the Trustees, or may authorize any officer, agent, or Trustee to
effect such purchases, sales or exchanges pursuant to recommendations
of the investment adviser (and all without further action by the
Trustees). Any such purchases, sales and exchanges shall be deemed to
have been authorized by all of the Trustees.
The Trustees may authorize, subject to applicable requirements of the
1940 Act, including those relating to Shareholder approval, the
investment adviser to employ, from time to time, one or more
sub-advisers to perform such of the acts and services of the
investment adviser, and upon such terms and conditions, as may be
agreed upon between the investment adviser and sub-adviser. Any
reference in this Trust Instrument to the investment adviser shall be
deemed to include such sub-advisers, unless the context otherwise
requires.
PRINCIPAL UNDERWRITER
Section 6.02. The Trustees may in their discretion from time to time
enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of Shares, whereby the Trust may
either agree to sell Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either
case, the contract shall be on such terms and conditions, if any, as
may be prescribed in the Bylaws, and such further terms and conditions
as the Trustees may in their discretion determine not inconsistent
with the provisions of this Article VI, or of the Bylaws; and such
contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
TRANSFER AGENT
Section 6.03. The Trustees may in their discretion from time to time
enter into one or more transfer agency and Shareholder service
contracts whereby the other party or parties shall undertake to
furnish the Trustees with transfer agency and Shareholder services.
The contract or contracts shall be on such terms and conditions as the
Trustees may in their discretion determine not inconsistent with the
provisions of this Trust Instrument or of the Bylaws.
PARTIES TO CONTRACT
Section 6.04. Any contract of the character described in Sections
6.01, 6.02 and 6.03 of this Article VI or any contract of the
character described in Article VIII hereof may be entered into with
any corporation, firm, partnership, trust or association, although one
or more of the Trustees or officers of the Trust may be an officer,
director, trustee, shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered void
or voidable by reason of the existence of any relationship, nor shall
any person holding such relationship be disqualified from voting on or
executing the same in his capacity as Shareholder and/or Trustee, nor
shall any person holding such relationship be liable merely by reason
of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when
entered into was not inconsistent with the provisions of this Article
VI or Article VIII hereof or of the Bylaws. The same person (including
a firm, corporation, partnership, trust, or association) may be the
other party to contracts entered into pursuant to Sections 6.01, 6.02
and 6.03 of this Article VI or pursuant to Article VIII hereof, and
any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned
in this Section 6.04.
PROVISIONS AND AMENDMENTS
Section 6.05. Any contract entered into pursuant to Sections 6.01 or
6.02 of this Article VI shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act or other applicable Act of
Congress hereafter enacted with respect to its continuance in effect,
its termination, and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract, entered
into pursuant to Section 6.01 of this Article VI shall be effective
unless assented to in a manner consistent with the requirements of
said Section 15, as modified by any applicable rule, regulation or
order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 7.01. The Shareholders shall have power to vote only (i) for
the election of Trustees as provided in Article III, Sections 3.01 and
3.02 hereof, (ii) for the removal of Trustees as provided in Article
III, Section 3.03(d) hereof, (iii) with respect to any investment
advisory or management contract as provided in Article VI, Sections
6.01 and 6.05 hereof, and (iv) with respect to such additional matters
relating to the Trust as may be required by law, by this Trust
Instrument, or the Bylaws or any registration of the Trust with the
Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and (ii) when the Trustees have determined
that the matter affects the interests of more than one Series, then
the Shareholders of all such Series shall be entitled to vote thereon.
The Trustees may also determine that a matter affects only the
interests of one or more classes of a Series, in which case any such
matter shall be voted on by such class or classes. Each whole share
shall be entitled to one vote as to any matter on which it is entitled
to vote, and each fractional share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy or
in any manner provided for in the Bylaws. A proxy may be given in
writing. The Bylaws may provide that proxies may also, or may instead,
be given by any electronic or telecommunications device or in any
other manner. Notwithstanding anything else herein or in the Bylaws,
in the event a proposal by anyone other than the officers or Trustees
of the Trust is submitted to a vote of the Shareholders of one or more
Series or of the Trust, or in the event of any proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers
or Trustees of the Trust, Shares may be voted only in person or by
written proxy. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required or permitted
by law, this Trust Instrument or any of the Bylaws of the Trust to be
taken by Shareholders.
MEETINGS
Section 7.02. The first Shareholders' meeting shall be held in order
to elect Trustees as specified in Section 3.02 of Article III hereof
at the principal office of the Trust or such other place as the
Trustees may designate. Meetings may be held within or without the
State of Delaware. Special meetings of the Shareholders of any Series
may be called by the Trustees and shall be called by the Trustees upon
the written request of Shareholders owning at least one-tenth of the
Outstanding Shares entitled to vote. Whenever ten or more Shareholders
meeting the qualifications set forth in Section 16(c) of the 1940 Act,
as the same may be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to
obtaining signatures on such a request for a meeting, the Trustees
shall comply with the provisions of said Section 16(c) with respect to
providing such Shareholders access to the list of the Shareholders of
record of the Trust or the mailing of such materials to such
Shareholders of record, subject to any rights provided to the Trust or
any Trustees provided by said Section 16(c). Shareholders shall be
entitled to at least fifteen (15) days' notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 7.03. One-third of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of
this Trust Instrument permits or requires that holders of any Series
shall vote as a Series (or that holders of a class shall vote as a
class), then one-third of the aggregate number of Shares of that
Series (or that class) entitled to vote shall be necessary to
constitute a quorum for the transaction of business by that Series (or
that class). Any lesser number shall be sufficient for adjournments.
Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is required by
law or by any provision of this Trust Instrument or the Bylaws, a
majority of the Shares voted in person or by proxy shall decide any
questions and a plurality shall elect a Trustee, provided that where
any provision of law or of this Trust Instrument permits or requires
that the holders of any Series shall vote as a Series (or that the
holders of any class shall vote as a class), then a majority of the
Shares present in person or by proxy of that Series or, if required by
law, a Majority Shareholder Vote of that Series (or class), voted on
the matter in person or by proxy shall decide that matter insofar as
that Series (or class) is concerned. Shareholders may act by unanimous
written consent. Actions taken by Series (or class) may be consented
to unanimously in writing by Shareholders of that Series.
DERIVATIVE ACTIONS
Section 7.04. Except as otherwise provided in Section 3816 of the
Delaware Act, all matters relating to the bringing of derivative
actions in the right of the Trust shall be governed by the General
Corporation Law of the State of Delaware relating to derivative
actions, and judicial interpretations thereunder, as if the Trust were
a Delaware corporation and the Shareholders were shareholders of a
Delaware corporation.
ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
Section 8.01. The Trustees shall at all times employ a bank, a
company that is a member of a national securities exchange, or a trust
company, each having capital, surplus and undivided profits of at
least two million dollars ($2,000,000) as custodian with authority as
its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same
upon written order or oral order confirmed in writing, or by such
electro-mechanical or electronic devices as are agreed to by the Trust
and the custodian, if such procedures have been authorized in writing
by the Trust;
(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or else where as the Trustees
may direct;
(3) to disburse such funds upon orders or vouchers;
and the Trust may also employ such custodian as its agent:
(4) to keep the books and accounts of the Trust or of any Series or
class and furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series, or class thereof, in accordance with the
provisions hereof; all upon such basis of compensation as may be
agreed upon between the Trustees and the custodian.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and
services of the custodian, and upon such terms and conditions, as may
be agreed upon between the custodian and such sub-custodian and
approved by the Trustees, provided that in every case such
sub-custodian shall be a bank, a company that is a member of a
national securities exchange, or a trust company organized under the
laws of the United States or one of the states thereof and having
capital, surplus and undivided profits of at least two million dollars
($2,000,000) or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act.
CENTRAL CERTIFICATE SYSTEM
Section 8.02. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian to deposit
all or any part of the securities owned by the Trust in a system for
the central handling of securities established by a national
securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934, as
amended, or such other person as may be permitted by the Commission,
or otherwise in accordance with the 1940 Act, pursuant to which system
all securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject
to withdrawal only upon the order of the Trust or its custodians,
subcustodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 9.01.
(a) The Trustees may from time to time declare and pay dividends or
other distributions with respect to any Series. The amount of such
dividends or distributions and the payment of them and whether they
are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to the
Shareholders of record at the time of declaring a dividend or other
distribution or among the Shareholders of record at such other date or
time or dates or times as the Trustees shall determine, which
dividends or distributions, at the election of the Trustees, may be
paid pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine. The
Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related plans as the
Trustees shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary
notwithstanding, the Trustees may at any time declare and distribute a
dividend of stock or other property pro rata among the Shareholders of
a particular Series, or class thereof, as of the record date of that
Series fixed as provided in Section (b) hereof.
REDEMPTIONS
Section 9.02. In case any holder of record of Shares of a particular
Series desires to dispose of his Shares or any portion thereof, he may
deposit at the office of the transfer agent or other authorized agent
of that Series a written request or such other form of request as the
Trustees may from time to time authorize, requesting that the Series
purchase the Shares in accordance with this Section 9.02; and the
Shareholder so requesting shall be entitled to require the Series to
purchase, and the Series or the principal underwriter of the Series
shall purchase his said Shares, but only at the Net Asset Value
thereof (as described in Section 9.03 of this Article IX). The Series
shall make payment for any such Shares to be redeemed, as aforesaid,
in cash or property from the assets of that Series and payment for
such Shares less any applicable deferred sales charge and/or fees
shall be made by the Series or the principal underwriter of the Series
to the Shareholder of record within seven (7) days after the date upon
which the request is effective. Upon redemption, shares shall become
Treasury shares and may be re-issued from time to time.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 9.03. The term "Net Asset Value" of any Series shall mean
that amount by which the assets of that Series exceed its liabilities,
all as determined by or under the direction of the Trustees. Such
value shall be determined separately for each Series and shall be
determined on such days and at such times as the Trustees may
determine. Such determination shall be made with respect to
securities for which market quotations are readily available, at the
market value of such securities; and with respect to other securities
and assets, at the fair value as determined in good faith by the
Trustees; provided, however, that the Trustees, without Shareholder
approval, may alter the method of valuing portfolio securities insofar
as permitted under the 1940 Act and the rules, regulations and
interpretations thereof promulgated or issued by the Commission or
insofar as permitted by any Order of the Commission applicable to the
Series. The Trustees may delegate any of their powers and duties under
this Section 9.03 with respect to valuation of assets and liabilities.
The resulting amount, which shall represent the total Net Asset Value
of the particular Series, shall be divided by the total number of
shares of that Series outstanding at the time and the quotient so
obtained shall be the Net Asset Value per Share of that Series. At any
time, the Trustees may cause the Net Asset Value per Share last
determined to be determined again in similar manner and may fix the
time when such redetermined value shall become effective. If, for any
reason, the net income of any Series, determined at any time, is a
negative amount, the Trustees shall have the power with respect to
that Series (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder,
or (ii) to reduce the number of Outstanding Shares of such Series by
reducing the number of Shares in the account of each Shareholder by a
pro rata portion of that number of full and fractional Shares which
represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of such Series an asset account in
the amount of such negative net income (provided that the same shall
thereupon become the property of such Series with respect to such
Series and shall not be paid to any Shareholder), which account may be
reduced by the amount, of dividends declared thereafter upon the
Outstanding Shares of such Series on the day such negative net income
is experienced, until such asset account is reduced to zero; (iv) to
combine the methods described in clauses (i) and (ii) and (iii) of
this sentence; or (v) to take any other action they deem appropriate,
in order to cause (or in order to assist in causing) the Net Asset
Value per Share of such Series to remain at a constant amount per
Outstanding Share immediately after each such determination and
declaration. The Trustees shall also have the power not to declare a
dividend out of net income for the purpose of causing the Net Asset
Value per Share to be increased. The Trustees shall not be required to
adopt, but may at any time adopt, discontinue or amend the practice of
maintaining the Net Asset Value per Share of the Series at a constant
amount.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 9.04. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940
Act. Such suspension shall take effect at such time as the Trustees
shall specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall
declare the suspension at an end. In the case of a suspension of the
right of redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the Net Asset Value per Share
next determined after the termination of the suspension. In the event
that any Series is divided into classes, the provisions of this
Section 9.04, to the extent applicable as determined in the discretion
of the Trustees and consistent with applicable law, may be equally
applied to each such class.
REDEMPTION OF SHARES
Section 9.05. The Trustees may require Shareholders to redeem Shares
for any reason under terms set by the Trustees, including, but not
limited to, (i) the determination of the Trustees that direct or
indirect ownership of Shares of any Series has or may become
concentrated in such Shareholder to an extent that would disqualify
any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto),
(ii) the failure of a Shareholder to supply a tax identification
number if required to do so, or (iii) the failure of a Shareholder to
pay when due for the purchase of Shares issued to him. The redemption
shall be effected at the redemption price and in the manner provided
in this Article IX.
The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership
of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code, or to comply with the requirements of
any other taxing authority.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 10.01. Neither a Trustee nor an officer of the Trust when
acting in such capacity, shall be personally liable to any person
other than the Trust or a beneficial owner for any act, omission or
obligation of the Trust, any Trustee or any officer of the Trust.
Neither a Trustee nor an officer of the Trust shall be liable for any
act or omission or any conduct whatsoever in his capacity as Trustee
or officer of the Trust, provided that nothing contained herein or in
the Delaware Act shall protect any Trustee or any officer of the Trust
against any liability to the Trust or to Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of the office of Trustee or Officer hereunder.
INDEMNIFICATION
Section 10.02.
(a) Subject to the exceptions and limitations contained in Section
(b) below:
(i) every Person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust to the fullest extent permitted by law
against liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office or (B) not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement;
(B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter based
upon a review of readily available facts (as opposed to a full
trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry);
provided, however, that any Shareholder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by
independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person
who has ceased to be a Covered Person and shall inure to the benefit
of the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which
Trust personnel, other than Covered Persons, and other persons may be
entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character
described in paragraph (a) of this Section 10.02 may be paid by the
Trust or Series from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the Trust or Series if it
is ultimately determined that he is not entitled to indemnification
under this Section 10.02; provided, however, that either (a) such
Covered Person shall have provided appropriate security for such
undertaking, (b) the Trust is insured against losses arising out of
any such advance payments or (c) either a majority of the Trustees who
are neither Interested Persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed
to a trial-type inquiry or full investigation), that there is reason
to believe that such Covered Person will be found entitled to
indemnification under this Section 10.02.
SHAREHOLDERS
Section 10.03. In case any Shareholder or former Shareholder of any
Series shall be held to be personally liable solely by reason of his
being or having been a Shareholder of such Series and not because of
his acts or omissions or for some other reason, the Shareholder or
former Shareholder (or his heirs, executors, administrators or other
legal representatives, or, in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled
out of the assets belonging to the applicable Series to be held
harmless from and indemnified against all loss and expense arising
from such liability. The Trust, on behalf of the affected Series,
shall, upon request by the Shareholder, assume the defense of any
claim made against the Shareholder for any act or obligation of the
Series and satisfy any judgment thereon from the assets of the Series.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 11.01. It is the intention of the Trustees to create a
business trust pursuant to the Delaware Act. It is not the intention
of the Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of legal
relationship other than a business trust pursuant to the Delaware Act.
No Trustee hereunder shall have any power to bind personally either
the Trust's officers or any Shareholder. All persons extending credit
to, contracting with or having any claim against the Trust or the
Trustees shall look only to the assets of the appropriate Series or
(if the Trustees shall have yet to have established Series) of the
Trust for payment under such credit, contract or claim; and neither
the Shareholders nor the Trustees, nor any of their agents, whether
past, present or future, shall be personally liable therefor. Nothing
in this Trust Instrument shall protect a Trustee against any liability
to which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 11.02. The exercise by the Trustees or the officers of the
Trust of their powers and discretions hereunder in good faith and with
reasonable care under the circumstances then prevailing shall be
binding upon everyone interested. Subject to the provisions of Article
X hereof and to Section 11.01 of this Article XI, the Trustees or the
officers of the Trust shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees and the officers of the Trust
may take advice of counsel or other experts with respect to the
meaning and operation of this Trust Instrument, and subject to the
provisions of Article X hereof and Section 11.01 of this Article XI,
shall be under no liability for any act or omission in accordance with
such advice or for failing to follow such advice. The Trustees and the
officers of the Trust shall not be required to give any bond as such,
nor any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 11.03. The Trustees may close the Share transfer books of the
Trust for a period not exceeding sixty (60) days preceding the date of
any meeting of Shareholders, or the date for the payment of any
dividends or other distributions, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
Shares shall go into effect; or in lieu of closing the stock transfer
books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of
Shareholders, or the date for payment of any dividend or other
distribution, or the date for the allotment of rights, or the date
when any change or conversion or exchange of Shares shall go into
effect, as a record date for the determination of the Shareholders
entitled to notice of, and to vote at, any such meeting, or entitled
to receive payment of any such dividend or other distribution, or to
any such allotment of rights, or to exercise the rights in respect of
any such change, conversion or exchange of Shares, and in such case
such Shareholders and only such Shareholders as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of,
and to vote at, such meeting, or to receive payment of such dividend
or other distribution, or to receive such allotment or rights, or to
exercise such rights, as the case may be, notwithstanding any transfer
of any Shares on the books of the Trust after any such record date
fixed as aforesaid.
TERMINATION OF TRUST
Section 11.04.
(a) This Trust shall continue without limitation of time but subject
to the provisions of sub-section (b) of this Section 11.04.
(b) The Trustees may, subject to a vote of a majority of the Trustees
and of a majority of the Trustees who are not an "interested person",
as that term is defined in the 1940 Act, of the Trust:
(i) sell and convey all or substantially all of the assets of the
Trust or any affected Series to another trust, partnership,
association or corporation, or to a separate series of shares thereof,
organized under the laws of any state, which trust, partnership,
association or corporation is an open-end management investment
company as defined in the 1940 Act, or is a series thereof, or to a
Series of this Trust, for adequate consideration, which may include
the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any affected
Series, and which may include shares of beneficial interest, stock or
other ownership interests of such trust, partnership, association or
corporation or of a series thereof, or of a Series of this Trust, or
to the extent now or hereinafter authorized by Delaware law, merge the
assets of the Trust or any affected Series into another trust,
partnership, association or corporation, or into a separate series of
shares thereof, organized under the laws of any state which trust,
partnership, association or corporation is an open-end management
investment company as defined in the 1940 Act, or is a series thereof
or into another Series of this Trust (hereinafter a "Transfer of
Assets"), or
(ii) at any time sell and convert into money all of the assets of the
Trust or any affected Series, or
(iii) at any time liquidate the Trust or any affected Series and
distribute its assets to Shareholders either in kind or after selling
and converting the same in whole or in part into money (a "Liquidation
of Assets"), and
(iv) any Transfer of Assets or Liquidation of Assets transaction
shall be subject to a Majority Shareholder Vote of each Series
affected by the matter, or if applicable, to a Majority Shareholder
Vote of the Trust; provided, however, that no such Majority
Shareholder Vote shall be required if:
(a) a Transfer of Assets takes place between or among one or more
Series of this Trust, which, (1) at the time of its establishment
pursuant to Section 2.06, or subsequent thereto and prior to the
issuance of Shares, such Series is designated by the Trustees as
exempt from the requirement of a Majority Shareholder Vote as a
condition precedent to a Transfer of Assets, (2) at the time of the
commencement of the public offering of such Shares, the registration
statement for such Shares discloses that a Transfers of Assets may
take place without a Majority Shareholder Vote of the Series or Trust,
or (3) the Series is one of the following Series of the Trust:
Fidelity Freedom 2030 Fund, Fidelity Freedom 2020 Fund, Fidelity
Freedom 2010 Fund, or Fidelity Freedom 2000 Fund; or
(b) a Liquidation of Assets takes place in respect of one or more
Series of the Trust which, (1) at the time of its establishment
pursuant to Section 2.06, or subsequent thereto and prior to the
issuance of Shares, such Series is designated by the Trustees as
exempt from the requirement of a Majority Shareholder Vote as a
condition precedent to a Liquidation (2) at the time of the
commencement of the public offering of such Shares discloses that a
Liquidation of Assets may take place between one or more series of the
Trust without a Majority Shareholder Vote of the Series or Trust, or
(3) the Series is one of the following Series of the Trust: Fidelity
Freedom 2030 Fund, Fidelity Freedom 2020 Fund, Fidelity Freedom 2010
Fund, or Fidelity Freedom 2000 Fund.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees and the Trust shall
be discharged of any and all further liabilities and duties hereunder
and the right, title and interest of all parties with respect to the
Trust or Series shall be cancelled and discharged.
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation
of the Trust's certificate of trust to be filed in accordance with the
Delaware Act, which certificate of cancellation may be signed by any
one Trustee.
MERGERS
Section 11.05. (a) Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust,
may, without prior Shareholder approval, (i) cause the Trust to merge
or consolidate with or into one or more trusts, partnerships (general
or limited), associations, limited liability companies or corporations
so long as the surviving or resulting entity is an open-end management
investment company under the 1940 Act, or is a Series thereof, that
will succeed to or assume the Trust's registration under that Act and
which is formed, organized or existing under the laws of a state,
commonwealth, possession or colony of the United States or (ii) cause
the Trust to incorporate under the laws of Delaware.
(b) The Trustees may, subject to a Majority Shareholder Vote of the
Trust, and subject to a vote of a majority of the Trustees, cause the
Trust to merge or consolidate with or into one or more trusts,
partnerships (general or limited), associations, limited liability
companies or corporations.
(c) Any agreement of merger or consolidation or certificate of merger
or consolidation may be signed by a majority of Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be
valid.
(d) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, and notwithstanding anything to the
contrary contained in this Trust Instrument, an agreement of merger or
consolidation approved by the Trustees in accordance with paragraphs
(a) or (b) of this Section 11.05 may effect any amendment to the Trust
Instrument or effect the adoption of a new Trust Instrument of the
Trust if it is the surviving or resulting trust in the merger or
consolidation.
FILING OF COPIES, REFERENCES, HEADINGS
Section 11.06. The original or a copy of this Trust Instrument and of
each amendment hereof or Trust Instrument supplemental hereto shall be
kept at the office of the Trust where it may be inspected by any
Shareholder. A supplemental trust instrument executed by any one
Trustee may be relied upon as a Supplement hereof. Anyone dealing with
the Trust may rely on a certificate by an officer or Trustee of the
Trust as to whether or not any such amendments or supplements have
been made and as to any matters in connection with the Trust
hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a
copy of this Trust Instrument or of any such amendment or supplemental
Trust Instrument. In this Trust Instrument or in any such amendment or
supplemental Trust Instrument, references to this Trust Instrument,
and all expressions like "herein," "hereof" and "hereunder," shall be
deemed to refer to this Trust Instrument as amended or affected by any
such supplemental Trust Instrument. All expressions like "his", "he"
and "him", shall be deemed to include the feminine and neuter, as well
as masculine, genders. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this Trust
Instrument, rather than the headings, shall control. This Trust
Instrument may be executed in any number of counterparts each of which
shall be deemed an original.
APPLICABLE LAW
Section 11.07. The trust set forth in this instrument is made in the
State of Delaware, and the Trust and this Trust Instrument, and the
rights and obligations of the Trustees and Shareholders hereunder, are
to be governed by and construed and administered according to the
Delaware Act and the laws of said State; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Trust
Instrument (a) the provisions of Section 3540 of Title 12 of the
Delaware Code or (b) any provisions of the laws (statutory or common)
of the State of Delaware (other than the Delaware Act) pertaining to
trusts which relate to or regulate (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of
trustee fees and charges, (ii) affirmative requirements to post bonds
for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval
concerning the acquisition, holding or disposition of real or personal
property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and
expenditures to income or principal, (vi) restrictions or limitations
on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of
fiduciary or other standards or responsibilities or limitations on the
acts or powers of trustees, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees
set forth or referenced in this Trust Instrument. The Trust shall be
of the type commonly called a "business trust", and without limiting
the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by
trusts under the Delaware Act, and the absence of a specific reference
herein to any such power, privilege or action shall not imply that the
Trust may not exercise such power or privilege or take such actions.
AMENDMENTS
Section 11.08. Except as specifically provided herein, the Trustees
may, without shareholder vote, amend or otherwise supplement this
Trust Instrument by making an amendment, a Trust Instrument
supplemental hereto or an amended and restated Trust Instrument.
Shareholders shall have the right to vote (i) on any amendment which
would affect their right to vote granted in Section 7.01 of Article
VII hereof, (ii) on any amendment to this Section 11.08, (iii) on any
amendment as may be required by law or by the Trust's registration
statement filed with the Commission and (iv) on any amendment
submitted to them by the Trustees. Any amendment required or permitted
to be submitted to Shareholders which, as the Trustees determine,
shall affect the Shareholders of one or more Series shall be
authorized by vote of the Shareholders of each Series affected and no
vote of shareholders of a Series not affected shall be required.
Notwithstanding anything else herein, any amendment to Article 10
hereof shall not limit the rights to indemnification or insurance
provided therein with respect to action or omission of Covered Persons
prior to such amendment.
FISCAL YEAR
Section 11.09. The fiscal year of the Trust shall end on a specified
date as set forth in the Bylaws, provided, however, that the Trustees
may, without Shareholder approval, change the fiscal year of the
Trust.
USE OF THE WORD "FIDELITY"
Section 11.10. Fidelity Management & Research Company ("FMR") has
consented to, and granted a non-exclusive license for, the use by any
Series or by the Trust of the identifying word "Fidelity" or "Spartan"
in the name of any Series or of the Trust. Such consent is subject to
revocation by FMR in its discretion, if FMR or subsidiary or affiliate
thereof is not employed as the investment adviser of each Series of
the Trust. As between the Trust and FMR, FMR controls the use of the
name of the Trust insofar as such name contains the identifying word
"Fidelity" or "Spartan." FMR may, from time to time, use the
identifying word "Fidelity" or "Spartan" in other connections and for
other purposes, including, without limitation, in the names of other
investment companies, corporations or businesses which it may manage,
advise, sponsor or own or in which it may have a financial interest.
FMR may require the Trust or any Series thereof to cease using the
identifying word "Fidelity" or "Spartan" in the name of the Trust or
any Series thereof if the Trust or any Series thereof ceases to employ
FMR or a subsidiary or affiliate thereof as investment adviser.
PROVISIONS IN CONFLICT WITH LAW
Section 11.11. The provisions of this Trust Instrument are severable,
and if the Trustees shall determine, with the advice of counsel, that
any of such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall
be deemed never to have constituted a part of this Trust Instrument;
provided, however, that such determination shall not affect any of the
remaining provisions of this Trust Instrument or render invalid or
improper any action taken or omitted prior to such determination. If
any provision of this Trust Instrument shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not
in any manner affect such provisions in any other jurisdiction or any
other provision of this Trust Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument as of the date set forth above.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d* Peter S. Lynch*
/s/Ralph F. Cox /s/William O. McCoy
Ralph F. Cox William O. McCoy
/s/Phyllis Burke Davis /s/Gerald C. McDonough
Phyllis Burke Davis Gerald C. McDonough
/s/Robert M. Gates /s/Marvin L. Mann
Robert M. Gates Marvin L. Mann
/s/E. Bradley Jones /s/Robert C. Pozen
E. Bradley Jones Robert C. Pozen*
/s/Donald J. Kirk /s/Thomas R. Williams
Donald J. Kirk Thomas R. Williams
*Interested Trustees
The business addresses of the
members of the Board of
Trustees are:
INTERESTED TRUSTEES (*):
82 Devonshire Street
Boston, MA 02109
NON-INTERESTED TRUSTEES:
82 Devonshire Street
Boston, MA 02109
Mailing Address:
P.O. Box 9235
Boston, MA 02205-9235
Exhibit (p)(1)
To: The Ethics Office, Mailzone N8A Exhibit A
ACKNOWLEDGMENT OF RECEIPT - 2000
______________________________ ________________________________
Date Signature
______________________________ ________________________________
Internal Phone Please Print Your Name Here
______________________________ ________________________________
Social Security Number Badge Number
Regular Employee Temporary Employee
I acknowledge receipt of the Policy Package dated January 1, 2000,
containing:
POLICY NAME APPLICABILITY
The Code of Ethics and the All employees
Insider Trading Policy
Statement
Personal Conduct Rules Registered employees (e.g.,
series 6, 7, 63, etc.) and
employees of Fidelity
Brokerage Services, Inc.,
National Financial Services
Corporation, Fidelity
Investments Institutional
Services Company, Inc., and
Fidelity Distributors
Corporation.
I represent that I have read and understand the policies that apply to
me, and acknowledge that my personal and beneficially owned securities
transactions are subject to the terms of the Fidelity Code of Ethics
and the Insider Trading Policy Statement and, if applicable, the
Personal Conduct Rules. I certify to the best of my knowledge that
all my personal and beneficially owned securities transactions, for
the current calendar year or since my date of employment, have been
reported as required and are consistent with the terms of the Fidelity
Code of Ethics and the Insider Trading Policy Statement and that I
have conducted myself in accordance with the Insider Trading Policy
Statement and, if applicable, the Personal Conduct Rules. I certify
that I have shared the provisions of the Code of Ethics and the
Insider Trading Policy Statement with family members sharing my
household. In addition, I certify my understanding that Fidelity's
Professional Conduct Policies apply to me. (HR Web at
http://mgs.fmr.com/hr/polproc)
I authorize access to my Fidelity mutual fund and/or brokerage
accounts by Fidelity as deemed necessary pursuant to Rule 204-2(a)(12)
of the Investment Advisers Act of 1940, and I further authorize
Fidelity to receive duplicate confirmations and statements for any
personal or beneficially owned brokerage account I maintain outside
Fidelity. I acknowledge that any communications with the Ethics
Office including pre-clearances of reportable securities transactions
required pursuant to this Code may be recorded.
I understand that Fidelity may amend any of the attached policies at
any time, and that it is my responsibility to be aware of and adhere
to the most current version of the policies.
TO: ALL FIDELITY EMPLOYEES
FROM: THE ETHICS OFFICE
CORPORATE COMPLIANCE
DATE: December 10, 1999
SUBJECT: The Code of Ethics for Personal Investing and the Personal
Conduct Rules
The attached policy package contains policies and procedures which you
are expected to comply with as a condition of your employment. They
are:
POLICY NAME APPLICABILITY
The Code of Ethics for All employees
Personal Investing and The
Insider Trading Policy
Statement
Personal Conduct Rules Registered employees (e.g.,
series 6, 7, 63, etc.) and
employees of Fidelity
Brokerage Services, Inc.,
National Financial Services
Corporation, Fidelity
Investments Institutional
Services Company, Inc., and
Fidelity Distributors
Corporation.
Please read the policies that apply to you and immediately sign the
Acknowledgment of Receipt. THE ACKNOWLEDGMENT MUST BE RETURNED TO THE
ETHICS OFFICE, MAILZONE N8A, NO LATER THAN JANUARY 31, 2000 (OR WITHIN
SEVEN DAYS OF YOUR DATE OF HIRE).
This year, we would like to report a 100% return of Acknowledgments to
senior management by January 31. Please help us reach this goal by
immediately taking the time to read the policies and to return your
signed Acknowledgment. In addition to improving the timeliness of
returns, you will directly assist in our ongoing effort to decrease
Fidelity's distribution and collection costs.
In addition, there are Professional Conduct Policies that are separate
from this package that also apply to you. These policies include, but
are not limited to:
(solid bullet) Outside Activities and Affiliations
(solid bullet) Gifts and Gratuities
(solid bullet) Electronic Communications.
You may view these policies and others that will apply to you on HR
Web on the Intranet at HTTP://MGS.FMR.COM/HR/POLPROC.
Please use the following contacts to direct your questions to the
appropriate party:
(solid bullet) For questions about the Personal Conduct Rules, contact
your local compliance advisor or Corporate Compliance at
(617)563-3149.
(solid bullet) For questions about the Code of Ethics and the Insider
Trading Policy Statements, you may contact the Ethics Office by
calling (617)563-5566, or emailing "Code of Ethics."
SUMMARY OF CHANGES, EFFECTIVE JANUARY 1, 2000
The Code of Ethics has recently been amended to clarify existing
policy. The substantive changes are as follows:
APPLICABLE TO ACCESS PERSONS, INVESTMENT PROFESSIONALS AND SENIOR
EXECUTIVES.
(solid bullet) HOLDINGS DISCLOSURE (SECTION IV. A.): Access Persons
must provide a list of personal and beneficially owned holdings within
7 days of commencement of employment or designation as an Access
Person. In addition, Access Persons must file an annual holdings
update. This is a new requirement under amended Rule 17j-1 of the
Investment Company Act of 1940.
STEPS TO HELP YOU COMPLY
1. Determine if you are a Non-Access Person, Access Person, Investment
Professional or Senior Executive as defined in the Code of Ethics
(Section III). If you have any questions regarding your access
designation, please contact us by calling (617)563-5566 or by emailing
us at "Code of Ethics."
2. Read the Code of Ethics and, if applicable, the Personal Conduct
Rules and return your signed Acknowledgment (Exhibit A) to the Ethics
Office, mailzone N8A, by January 31. If you were hired after January
1, the signed Acknowledgment, your Personal Brokerage Account
Disclosure Form (Exhibit E), and, if applicable, your Personal
Holdings Disclosure Form (Exhibit F) must be returned within 7 days of
your hire date.
3. Familiarize yourself with the general provisions of the Code of
Ethics that apply to all employees as well as the specific provisions
that will apply to you based upon your access designation.
4. If you have executed transactions in an approved external brokerage
account and find that they have not been reported to the Ethics Office
as required, immediately forward copies of account statements with the
transaction information to us. If an account statement is not
available, complete the Report of Securities Transactions (Exhibit B)
with the requested information, and send it to us at N8A. Once again,
it is your responsibility to ensure that duplicate confirmations and
statements for approved external accounts are forwarded to the Ethics
Office.
5. If you are a new employee:
a) Disclose to the Ethics Office all personal and beneficially owned
brokerage accounts you currently maintain, whether with Fidelity
Brokerage Services, Inc. (FBSI) or another broker-dealer. (Exhibit
E).
b) Immediately initiate a transfer, or close, all personal and
beneficially owned brokerage accounts at brokers other than those
approved for the region unless you receive written permission from the
Ethics Officer, or his designee, to maintain an external account (see
Exhibit G). If you receive written permission from the Ethics
Officer, or his designee, to maintain an account outside of the
approved broker for the region, it is your responsibility to ensure
that duplicate confirmations and statements are being sent to the
Ethics Office.
c) If you are an Access Person, Investment Professional or Senior
Executive, disclose to the Ethics Office all personal and beneficially
owned holdings using Exhibit F. Your disclosure should include
private placements and certificated shares.
6. Notify the Ethics Office if you are a beneficial owner of a
Fidelity Brokerage Services, Inc. (FBSI) account that is not under
your name (Exhibit E).
FIDELITY INVESTMENTS'
CODE OF ETHICS FOR PERSONAL INVESTING
AND
THE STATEMENT OF POLICIES AND
PROCEDURES ON INSIDER TRADING
JANUARY 1, 2000
TABLE OF CONTENTS
CODE OF ETHICS
I. PURPOSE AND SCOPE OF THIS CODE 6
A. Personal Securities Transactions 6
B. Guiding Principles 6
II. PERSONS (AND ACCOUNTS) TO WHOM THIS CODE APPLIES 7
A. Access Persons 7
B. Non-Access Trustees 8
C. Portfolio Managers. 8
D. Fidelity Employees. 8
E. Other Persons. 8
F. Covered Accounts (Beneficial Ownership). 8
III. PROVISIONS APPLICABLE TO FIDELITY EMPLOYEES AND THEIR
ACCOUNTS 138
A. Procedural Requirements 138
B. Prohibited Activities 140
C. Restricted Activities 12
IV. ADDITIONAL REQUIREMENTS APPLICABLE TO ACCESS PERSONS 13
A. Disclosure of Personal Securities Holdings. 13
B. Pre-Clearance. 194
C. Good-Till-Canceled Orders. 195
D. Purchase of Closed-End Funds. 195
V. ADDITIONAL REQUIREMENTS APPLICABLE TO INVESTMENT
PROFESSIONALS AND SENIOR EXECUTIVES 195
A. Private Placements. 195
B. Surrender of Short-Term Trading Profits. 195
C. Purchase of Securities of Certain Broker-Dealers. 195
D. Research Notes. 195
E. Affirmative Duty to Recommend Suitable Securities. 195
F. Affirmative Duty to Disclose. 195
G. Service as a Director or Trustee. 195
VI. PROHIBITION ON CERTAIN TRADES BY PORTFOLIO MANAGERS 196
VII. NON-ACCESS TRUSTEES 196
VIII. WAIVERS AND EXCEPTIONS 196
A. Requests to Waiver a Provision of the Code of Ethics. 196
B. Exceptions. 196
IX. ENFORCEMENT 196
A. Review. 196
B. Board Reporting. 196
C. Violations. 196
D. Sanctions. 197
E. Appeals Procedures. 197
INSIDER TRADING POLICY STATEMENT 200
PERSONAL CONDUCT RULES (only applicable to employees
affiliated with a broker-dealer). 30
EXHIBITS 37
CODE OF ETHICS FOR PERSONAL INVESTING
This document constitutes the Code of Ethics adopted by the Fidelity
Funds (the "Funds"), the subsidiaries of FMR Corp. that serve as
investment advisors or principal underwriters and their affiliated
companies (collectively, the "Fidelity Companies") pursuant to the
provisions of Rule 17j-1 under the Investment Company Act of 1940 and
of Rules 204-2(a)(12) and 204-2(a)(13) under the Investment Advisers
Act of 1940 (collectively, the "Rules").
I.PURPOSE AND SCOPE OF THIS CODE
A. PERSONAL SECURITIES TRANSACTIONS
This Code focuses on personal transactions in securities by persons
associated with the various Fidelity Companies. Accordingly, the Code
does not attempt to address all areas of potential liability under
applicable laws. For example, provisions of the Investment Company
Act of 1940 prohibit various transactions between a fund and
affiliated persons, including the knowing sale or purchase of property
to or from a fund on a principal basis and joint transactions between
a fund and an affiliated person. This Code does not address these
other areas of potential violation. Accordingly, persons covered by
this Code are advised to seek advice from the Ethics Officer, or his
or her designee (collectively, the "Ethics Office"), before engaging
in any transaction other than the normal purchase or sale of fund
shares or the regular performance of their business duties if the
transaction directly or indirectly involves themselves and one or more
of the Funds.
B. GUIDING PRINCIPLES
The Code is based on the principle that the officers, directors,
partners and employees of the Fidelity Companies owe a fiduciary duty
to, among others, the shareholders of the Funds to place the interests
of the Fund shareholders above their own and to conduct their personal
securities transactions in a manner which does not interfere with Fund
transactions, create an actual or potential conflict of interest with
a Fund or otherwise take unfair advantage of their relationship to the
Funds. Persons covered by this Code must adhere to this general
principle as well as comply with the Code's specific provisions. It
bears emphasis that technical compliance with the Code's procedures
will not automatically insulate from scrutiny trades which show a
pattern of abuse of the individual's fiduciary duties to the Fidelity
Funds in general or a specific Fund in particular. For officers and
employees of Fidelity Management & Research Company ("FMR") and its
affiliates, the fiduciary responsibility applies to all of the
investment companies advised by FMR or any of its affiliates as well
as any account holding the assets of third parties for which FMR or
any of its affiliates acts in an investment advisory capacity (both
types of portfolios hereinafter referred to as the "Fidelity Funds" or
"Funds").
Recognizing that certain requirements are imposed on investment
companies and their advisers by virtue of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940, considerable thought
has been given to devising a code of ethics designed to provide legal
protection to accounts for which a fiduciary relationship exists and
at the same time maintain an atmosphere within which conscientious
professionals may develop and maintain investment skills. It is the
combined judgment of the Fidelity Companies and the Boards of the
Funds that as a matter of policy a code of ethics should not inhibit
responsible personal investment by professional investment personnel,
within boundaries reasonably necessary to insure that appropriate
safeguards exist to protect the Funds. This policy is based on the
belief that personal investment experience can over time lead to
better performance of the individual's professional investment
responsibilities. The logical extension of this line of reasoning is
that such personal investment experience may, and conceivably should,
involve securities which are suitable for the Funds in question. This
policy quite obviously increases the possibility of overlapping
transactions. The provisions of this Code, therefore, are designed to
foster personal investments while minimizing conflicts under these
circumstances and establishing safeguards against overreaching.
II. PERSONS (AND ACCOUNTS) TO WHOM THIS CODE APPLIES
Unless otherwise specified, each provision of this Code applies to all
members of the Board of the Funds, and all officers, directors,
partners and employees of every Fidelity Company. In addition, the
provisions apply to any individual designated and so notified in
writing by the Ethics Office. Where the applicability of a particular
provision is more limited, the provision will so state. For example,
particular provisions may state they are limited to:
A. ACCESS PERSONS
This category includes Investment Professionals, Senior Executives and
certain other employees specified in paragraph II. A. 2. below.
1. INVESTMENT PROFESSIONALS are (i) portfolio managers, research
analysts and traders employed by FMR; (ii) employees seconded to FMR
from Fidelity International Limited ("FIL") performing similar
functions; (iii) all employees of the Capital Markets Division of
Fidelity Investment Institutional Brokerage Group ("FIIBG"); (iv)
officers (vice-president and above) and members of the Boards of
Directors of FMR; and (v) such other employees as the Ethics Office
may designate and so notify in writing.
2. SENIOR EXECUTIVES are (i) officers (vice-president and above) and
members of the Boards of Directors of FMR Corp.; (ii) attorneys within
Administrative and Government Affairs' ("AGA") Legal Department; (iii)
employees of the Fund Treasurer's Department, the FMR Investment &
Advisor Compliance Department and the Compliance Systems Technology
Group; and (iv) such other employees as the Ethics Office may
designate and so notify in writing.
3. OTHER ACCESS PERSONS are all other employees who, in connection
with their regular duties, make, participate in, or obtain timely
information regarding the purchase or sale of a security by a Fund or
of any investment recommendation to a Fund. This includes (i)
employees of FMR, Fidelity Management Trust Company ("FMTC"), and
Fidelity Pricing and Cash Management Services ("FPCMS"); (ii) other
employees seconded from FIL to the foregoing companies; (iii) all
employees with access to the BOS E (AS400 trading machine), BOS H
(AS400 development machine), INVIEW, BONDVIEW or OVERVIEW systems or
any other system containing timely information about the Funds'
activities or investment recommendations made to the Funds; (iv) all
employees within AGA's Operations Audit and Analysis Department, and
(v) such other employees as the Ethics Office may designate and so
notify in writing.
Although the Ethics Office seeks to notify Access Persons of their
status as such, you are required to comply with all provisions
applicable to Access Persons if you are within the above definitions
even if the Ethics Office does not notify you of your status. Please
contact the Ethics Office if you believe you are an Access Person or
if you are unsure of your status under the Code.
B. NON-ACCESS TRUSTEES
1. Trustees of the Fidelity Group of Funds will generally be deemed
Access Persons; however, Trustees who fulfill both of the following
conditions will be deemed "Non-Access Trustees" and treated as a
separate category:
a) The Trustee is not an "interested person" (as defined in Section
2(a)(19) of the Investment Company Act of 1940) of any Fidelity Fund;
and
b) The Trustee elects not to receive the Daily Directors' Report and
further elects not to have access to the INVIEW, BONDVIEW, or OVERVIEW
systems; PROVIDED that this condition shall only be considered
fulfilled as of the fifteenth day after the Trustee has notified the
Ethics Office of such election.
C. PORTFOLIO MANAGERS.
This category includes employees whose assigned duties are to manage
any Fund, or portion thereof, and who have the power and authority to
make investment decisions on behalf of such Fund or portion thereof.
D. FIDELITY EMPLOYEES.
This category includes all employees of the Fidelity Companies,
including employees seconded to any Fidelity Company by FIL.
E. OTHER PERSONS.
These are persons as specified in a particular provision of the Code
or as designated by the Ethics Office.
F COVERED ACCOUNTS (BENEFICIAL OWNERSHIP).
It bears emphasis that the provisions of the Code apply to
transactions in reportable securities for any account "beneficially
owned" by any person covered by the Code. The term "beneficial
ownership" is more encompassing than one might expect. For example,
an individual may be deemed to have beneficial ownership of securities
held in the name of a spouse, minor children, or relatives sharing his
or her home, or under other circumstances indicating a sharing of
financial interest. See the Appendix to this Code for a more
comprehensive explanation of beneficial ownership. Please contact the
Ethics Office if you are unsure as to whether you have beneficial
ownership of particular securities or accounts.
III. PROVISIONS APPLICABLE TO FIDELITY EMPLOYEES AND THEIR ACCOUNTS
A. PROCEDURAL REQUIREMENTS
A. REPORTS ON REPORTABLE SECURITIES. Fidelity has established certain
procedures to monitor individual transactions in reportable securities
(as defined below) for compliance with this Code, and to avoid
situations which have the potential for conflicts of interest with the
Funds. You and all persons subject to this Code are required to
comply with the procedures described below. Failure to follow these
procedures or the filing of a false, misleading or materially
incomplete report will itself constitute a violation of this Code.
Reports required under Section III.A.5. are necessary only for
transactions in reportable securities. If an investment is made in an
entity substantially all of whose assets are shares of another entity
or entities, the security purchased should be reported and the
underlying security or securities identified. Furthermore, if an
investment is made in a private placement, this transaction must be
reported. (See Exhibit B.)
"REPORTABLE SECURITIES" are ALL securities except:
a) U.S. Treasury Notes, Bills and Bonds;
b) money market instruments such as certificates of deposit, banker's
acceptances and commercial paper;
c) shares of registered open-end investment companies;
d) securities issued by FMR Corp.;
e) any obligations of agencies and instrumentalities of the U.S.
government if the remaining maturity is one year or less; and
f) commodities and options and futures on commodities provided that
the purchase of these instruments may not be utilized to indirectly
acquire interests or securities which could not be acquired directly
or which could not be acquired without reporting or pre-clearance.
See Section III.B.4.
2. ACKNOWLEDGMENT. Each new Fidelity employee will be given a copy of
this Code of Ethics upon commencement of employment. Within 7 days
thereafter, you must file an acknowledgment (Exhibit A.) stating that
you have read and understand the provisions of the Code of Ethics, and
provide a written list to the Ethics Office of all brokerage accounts
in which you are a beneficial owner of any securities in the account
(Exhibit E.). Additionally, your acknowledgment accords Fidelity the
authority to access at any time records for any beneficially owned
brokerage account for the period of time you were employed by
Fidelity.
3. ANNUAL UPDATE. Each year, on or before January 31, you must file
an annual update stating that you have reviewed the provisions of the
Code of Ethics, understand the provisions of the Code and that the
Code applies to you, and believe that your personal transactions in
reportable securities for the previous calendar year, and those of
your family members which are deemed to be beneficially owned by you,
have been reported as required under the Code and were consistent with
its provisions (Exhibit A.).
4. USE OF BROKERS.
a) ALL FIDELITY EMPLOYEES must conduct all personal and beneficially
owned transactions in reportable securities through a brokerage
account at Fidelity Brokerage Services, Inc. (FBSI), or with an
approved broker outside the U.S. (See Exhibit G.). By opening an
account with FBSI you agree to allow FBSI to forward to the Ethics
Office reports of your account transactions and to allow the Ethics
Office access to all account information. Upon opening such an
account you are required to notify FBSI of your status as an employee.
b) HARDSHIP EXCEPTION: Under circumstances evidencing special
hardship and then only with the express written approval of the Ethics
Office, you may be granted a waiver to establish accounts for trading
reportable securities with brokers other than FBSI or those approved
for the region. (See Section VIII.). If you maintain an account with
an external broker pursuant to permission from the Ethics Office, you
must ensure duplicate reporting as specified in "Transaction
Reporting." (See Section III. A. 5.).
5. TRANSACTION REPORTING. Each employee must report personal
transactions in reportable securities to the Ethics Office. Failure
to file a report will be treated as the equivalent of a report
indicating that there were no transactions in reportable securities.
This reporting obligation may be met as follows:
a) FBSI Accounts: The Ethics Office will assume responsibility for
obtaining trade information from FBSI for accounts in your name and
all other related FBSI accounts that have been disclosed to the Ethics
Office by you.
b) Non-FBSI (External) Accounts: If any transactions in reportable
securities are not being conducted through a FBSI account (including
those conducted through an approved broker outside the U.S. or another
external broker pursuant to permission from the Ethics Office), you
are responsible for ensuring that the institution where the account is
maintained agrees to, and promptly provides, regular copies of
confirmations and statements directly to the Ethics Office. These
confirmations and statements must include the trade date, security
description, number of shares or principal amount of each security,
the nature of the transaction (e.g., purchase or sale), the total
price and the name of the institution that effected the transactions.
If transactions cannot or are not reported by the external institution
in this fashion, permission to open the account will not be granted or
will be revoked by the Ethics Office.
c) Failure to Report by External Brokers. As noted above, employees
are responsible for ensuring their transactions in reportable
securities not conducted through a FBSI account are reported to the
Ethics Office. If you have executed transactions through an external
broker and the broker does not report the transactions as specified in
paragraph b) above, you must promptly forward the necessary
information to the Ethics Office. If account statements with the
necessary information are not available, you must complete the REPORT
OF SECURITIES TRANSACTIONS (Exhibit B) with the information and
forward it to the Ethics Office.
B. PROHIBITED ACTIVITIES
1. ACTIVITIES FOR PERSONAL BENEFIT. Inducing or causing a Fund to
take action, or to fail to take action, for personal benefit rather
than for the benefit of the Fund is prohibited. For example, you
would violate this Code by causing a Fund to purchase a security you
owned for the purpose of supporting or increasing the price of that
security. Causing a Fund to refrain from selling a security in an
attempt to protect a personal investment, such as an option on that
security, also would violate this Code.
2. PROFITING FROM KNOWLEDGE OF FUND TRANSACTIONS. Using your
knowledge of Fund transactions to profit by the market effect of such
transactions is prohibited.
3. VIOLATIONS OF THE ANTIFRAUD LAWS AND REGULATIONS. Violations of
the antifraud provisions of the federal securities laws and the rules
and regulations promulgated thereunder, including the antifraud
provision of Rule 17j-1 under the Investment Company Act of 1940, are
prohibited. In that Rule, the Securities and Exchange Commission
specifically makes it unlawful for any person affiliated with a Fund,
investment adviser or principal underwriter of a Fund in connection
with the purchase or sale, directly or indirectly, by such person of a
"security held or to be acquired" by such Fund:
"(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make any untrue statement of a material fact to the Fund or
omit to state a material fact necessary in order to make the
statements made to the Fund, in light of the circumstances under which
they are made, not misleading;
(3) To engage in any act, practice or course of business that operates
or would operate as a fraud or deceit upon the Fund; or
(4) To engage in any manipulative practice with respect to the Fund."
Rule 17j-1 defines "security held or to be acquired" very broadly to
include any security (other securities that are not reportable
securities) that, "within the most recent 15 days, (i) is or has been
held by such company, or (ii) is being or has been considered by such
company or its investment adviser for purchase by such company, and
(iii) any option to purchase or sell, and any security convertible
into or exchangeable for" a reportable security. Thus the antifraud
provisions of Rule 17j-1 may apply to transactions in securities even
if not recently traded by a Fund. Under Rule 17j-1, a sufficient
nexus exists if a fraud is effected in connection with a security held
for a long period in a portfolio or merely considered for inclusion in
a portfolio. In addition, the receipt of compensation in the form of
an opportunity to purchase a security that is intended to induce a
Fund to purchase other securities must be reported under this Rule,
whether or not the compensation is in the form of an opportunity to
purchase a security "held or to be acquired" by a Fund. Moreover, the
general antifraud provisions of the Securities Exchange Act of 1934
and other federal securities statutes make unlawful fraud in
connection with the purchase or sale of securities, even if such
securities do not fall within the scope of Rule 17j-1.
4. USE OF DERIVATIVES. Derivatives, including futures and options,
and other arrangements may not be used to evade the restrictions of
this Code. Accordingly, you may not use derivatives or other
arrangements with similar effects to take positions in securities that
the Code would prohibit if the positions were taken directly. For
purposes of this section, "futures" are futures on securities or
securities indexes; "options" are options (puts or calls) on
securities or securities indexes, or options on futures on securities
or securities indexes. Options and futures on commodities are not
"reportable securities" except as specified in Section III. A. 1. f).
5. GIFTS AND HOSPITALITIES. The Fidelity Companies generally prohibit
employees from receiving gifts, gratuities, and other from any person
or entity that does business with the Funds or with any Fidelity
Company or from any entity which is a potential portfolio investment
for the Funds. Fidelity's Gifts and Gratuities Policy, which is
separate from this Code, sets forth the specific policies,
restrictions and procedures to be observed by employees with respect
to business-related gifts and related matters.
6. RESTRICTED SECURITIES. From time to time, the Ethics Office may
place a security on a restricted list. Certain employees, as
designated on a case-by-case basis by the Ethics Office, may not
effect transactions in securities on the restricted list.
7. INVESTMENTS IN HEDGE FUNDS AND INVESTMENT CLUBS. You may not
invest in hedge funds or investment clubs because such funds or clubs
cannot normally be expected to comply with the provisions of this
Code.
C. RESTRICTED ACTIVITIES
The following are restricted by this Code of Ethics:
1. SHORT SALE ACTIVITIES. Purchasing puts to open, selling calls to
open or selling a security short where there is no corresponding long
position in the underlying security is prohibited; short sales against
the box are permitted. This prohibition includes purchasing puts and
selling calls on all market indexes with the exception of the
following indexes: S&P 100, S&P Mid Cap 400, S&P 500, Morgan Stanley
Consumer Index, FTSE 100 and Nikkei 225. Short sales of the Fidelity
Select Portfolios are also prohibited.
2. PUBLIC OFFERINGS FOR WHICH NO PUBLIC MARKET PREVIOUSLY EXISTED.
The purchase of an initial public offering of securities for which no
public market in the same or similar securities of that issuer has
previously existed is prohibited except as noted below. This
prohibition includes "secondary" public offerings (where the
securities are offered publicly by a substantial shareholder and not
from the company's treasury) and so-called "free stock offers" through
the Internet, and applies both to equity and debt securities.
EXCEPTIONS. Exceptions from this prohibition may be granted in
special circumstances with the written permission of the Ethics Office
(e.g., receipt of securities or their subsequent sale by an insurance
policyholder or depositor of a company converting from mutual to stock
form).
3. EXCESSIVE TRADING. While active personal trading does not in and
of itself raise issues under Rule 17j-1, the Fidelity Companies and
Boards of the Funds believe that a very high volume of personal
trading can be time consuming and can increase the possibility of
actual or apparent conflicts with portfolio transactions.
Accordingly, an unusually high level of personal trading activity is
strongly discouraged and may be monitored by the Ethics Office to the
extent appropriate for the category of person, and a pattern of
excessive trading may lead to the taking of appropriate action under
the Code.
4. DISCRETIONARY AUTHORIZATION. You may not exercise investment
discretion over accounts in which you have no beneficial interest. If
you wish to do so, you must contact the Ethics Office for approval.
IV. ADDITIONAL REQUIREMENTS APPLICABLE TO ACCESS PERSONS
Because of their access to information about Fund investments and/or
investment recommendations, Access Persons are necessarily subject to
somewhat greater restrictions and closer scrutiny than are other
persons subject to the Code. Accordingly, in addition to complying
with the provisions detailed in Section III of this Code, Access
Persons are required to comply with the provisions of this section.
A. DISCLOSURE OF PERSONAL SECURITIES HOLDINGS.
Access Persons must disclose in writing all personal securities
holdings owned directly or otherwise beneficially owned. (See Exhibit
F.)
1. INITIAL REPORT. Each new Access Person must file a holdings
disclosure within 7 days of the commencement of employment or of being
designation an Access Person.
2. ANNUAL REPORT. Each Access Person must file a holdings report
containing current information as of a date no more than 30 days
before the report is submitted.
B. ALL PERSONAL TRADES IN REPORTABLE SECURITIES MUST BE CLEARED IN
ADVANCE BY THE APPROPRIATE PRE-CLEARANCE DESK.
One of the most important objectives of this Code is to prevent Access
Persons from making personal trades on the basis of information about
portfolio transactions made by the Funds. Trading on such information
for personal benefit not only constitutes a violation of this Code,
but also may influence the market in the security traded and thus
prevent transactions for the Funds from being conducted at the most
favorable price. To further reduce the possibility that Fund
transactions will be affected by such trades, Access Persons must
comply with the following procedures before effecting a personal
transaction in any securities which are "reportable securities":
1. PRE-CLEARANCE PROCEDURES.
a) On any day that you plan to trade a reportable security, you must
first contact the appropriate pre-clearance desk for approval. (See
Exhibit H.) (PLEASE NOTE THAT PRE-CLEARANCE COMMUNICATIONS MAY BE
RECORDED FOR THE PROTECTION OF FIDELITY AND ITS EMPLOYEES.) By
seeking pre-clearance, you will be deemed to be advising the Ethics
Office that you (i) do not possess any material, nonpublic information
relating to the security; (ii) are not using knowledge of any proposed
trade or investment program relating to the Funds for personal
benefit; (iii) believe the proposed trade is available to any market
participant on the same terms; and (iv) will provide any other
relevant information requested by the Ethics Office. The pre-clearance
desk will consider approval of the trade for execution only upon the
day the request is made. Generally, a pre-clearance request will not
be approved if the pre-clearance desk determines that the trade will
have a material influence on the market for that security or will take
advantage of, or hinder, trading by the Funds. Additionally, the
pre-clearance desk will evaluate a pre-clearance request for a
transaction to determine if you are in compliance with the other
provisions of the Code relevant to such transaction. Securities and
transaction types that do not require pre-clearance include the
following: currency warrants; rights subscriptions; gifting of
securities; automatic dividend reinvestments; and options on the
following indexes: S&P 100, S&P Mid Cap 400, S&P 500, Morgan Stanley
Consumer Index, FTSE 100 and Nikkei 225.
b) Transactions in accounts beneficially owned by an employee where
investment discretion has been provided to a third party in a written
document and for which the employee provides no input regarding
investment decision making will not be subject to pre-clearance.
Transactions in reportable securities in such accounts, however, still
must be reported under this Code.
c) In addition to any other sanctions provided for under the Code (see
Section IX. D.), failure to pre-clear a transaction as required above
may result in a requirement to surrender any profits realized in
connection with the transaction.
C. GOOD-TILL-CANCELED ORDERS.
Access Persons may not place good-till-canceled orders.
Good-till-canceled orders may inadvertently cause an employee to
violate the pre-clearance provisions of this Code.
D. PURCHASE OF CLOSED-END FUNDS.
The purchase of closed-end funds for which a Fidelity Company
performs the pricing and bookkeeping services is prohibited without
prior approval by the Ethics Office.
V. ADDITIONAL REQUIREMENTS APPLICABLE TO INVESTMENT PROFESSIONALS AND
SENIOR EXECUTIVES
In addition to complying with the provisions detailed in Sections III
and IV of this Code, Investment Professionals and Senior Executives
are required to comply with the provisions of this section.
A. PRIVATE PLACEMENTS.
Private placements are in many cases not suitable investments for the
Funds. However, in various circumstances, they may be suitable
investments. In order to avoid even the appearance of a conflict of
interest between their personal investment activities and their
fiduciary responsibility to the Funds' shareholders, Investment
Professionals and Senior Executives must follow the procedures
outlined below to participate in a private placement.
1. PRIOR APPROVAL TO PARTICIPATE.
You must receive written approval from your Division or Department
Head and the Ethics Office, utilizing Exhibit C, prior to any purchase
of a privately placed security. If you are a Division or Department
Head, then approval shall be received from the President of FMR. (See
Exhibit C.)
2. TRANSACTION REPORTING.
If approved, you must report the purchase to the Ethics Office within
10 days of the end of the month in which the purchase occurred, using
the REPORT OF SECURITIES TRANSACTIONS form (Exhibit B.).
3. IN THE EVENT OF SUBSEQUENT INVESTMENT BY A FUND OR FUNDS.
After approval is granted, if you have any material role in subsequent
consideration by any Fund of an investment in the same or an
affiliated issuer, you must disclose your interest in the private
placement investment to the person(s) making the investment decision.
Notwithstanding such a disclosure, any decision by any Fund to
purchase the securities of the issuer, or an affiliated issuer, must
be subject to an independent review by your Division or Department
Head.
B. SURRENDER OF SHORT-TERM TRADING PROFITS.
Short-term trading can be both time consuming and can increase the
possibility of actual or apparent conflicts with Fund transactions.
To reduce instances of short-term trading, the Fidelity Companies and
the Boards of the Funds have determined that Investment Professionals
and Senior Executives will be required to surrender short-term trading
profits. )
Short-term trading profits are profits generated from the purchase and
sale of the same (or equivalent) security within 60 calendar days.
Transactions will be matched with any opposite transaction within the
most recent 60 calendar days. Options on the following indexes are
not subject to this provision: S&P 100, S&P Mid Cap 400, S&P 500,
Morgan Stanley Consumer Index, FTSE 100 and Nikkei 225. Exhibit D
contains further information and examples concerning application of
this policy.
C. PURCHASE OF SECURITIES OF CERTAIN BROKER-DEALERS.
Investment Professionals and Senior Executives, unless specifically
excluded by the Ethics Office, may not purchase securities of certain
broker-dealers or parent companies as identified from time to time by
the Ethics Office based upon the level and nature of services provided
to the Funds.
D. RESEARCH NOTES.
Investment Professionals and Senior Executives specifically designated
by the Ethics Office must wait two business days after the day on
which a research note is issued prior to trading for their
beneficially owned accounts in the securities of the issuer(s) that is
the subject of the note.
E. AFFIRMATIVE DUTY TO RECOMMEND SUITABLE SECURITIES.
A portfolio manager or a research analyst may not fail to timely
recommend a suitable security to, or purchase or sell a suitable
security for, a Fund in order to avoid an actual or apparent conflict
with a personal transaction in that security. Before trading any
security, a portfolio manager or research analyst has an affirmative
duty to provide to Fidelity any material, public information that
comes from the company about such security in his or her possession.
As a result, portfolio managers or research analysts should (a)
confirm that a Research Note regarding such information on such
security is on file prior to trading in the security, or (b) if not,
should either contact the Director of Research or publish such
information in their possession and wait two business days prior to
trading in the security.
F. AFFIRMATIVE DUTY TO DISCLOSE.
Investment Professionals and Senior Executives who own a security, or
who have decided to effect a personal transaction in a security, have
an affirmative duty to disclose this information in the course of any
communication about that security when the purpose or reasonable
consequence of such communication is to influence a portfolio to buy,
hold or sell that security. The disclosure of ownership should be
part of the initial communication but need not be repeated in the case
of continuing communications directed to a specific person.
G. SERVICE AS A DIRECTOR OR TRUSTEE.
Service on a board of directors or Trustees poses several forms of
potential conflicts for employees. These include potentially
conflicting fiduciary duties to the company and a Fund, receipt of
possibly material, nonpublic information and conflicting demands on
the time of the employee. Accordingly, service by any Investment
Professional or Senior Executive on a board of directors of a
non-Fidelity publicly-traded or privately-held company likely to issue
shares is prohibited absent prior authorization. Approval will be
based upon a determination that the board service would be in the best
interests of the Funds and their shareholders. Requests for approval
of board service should be submitted in writing to the Ethics Office.
VI. PROHIBITION ON CERTAIN TRADES BY PORTFOLIO MANAGERS
Portfolio managers are the people most familiar with the investment
decisions they are making for the Funds they manage. Even the
appearance of a portfolio manager trading the same securities for his
or her personal account on or about the same time as he or she is
trading for the Fund is not in the best interest of the Funds.
Accordingly, as a portfolio manager, you may not buy or sell a
security your Fund has traded within 7 calendar days on either side of
the Fund's trade date (i.e., date of execution, not the settlement
date). For example, assuming the day your Fund trades a security is
day 0, day 8 is the first day you may trade that security for your own
account. This prohibition is in addition to the restrictions that
apply generally to all persons subject to this Code and those
applicable to Access Persons. If application of this rule would work
to the disadvantage of a Fund (e.g., you sold a security on day 0 and
on day 3, after new events had occurred, determined that the Fund
should buy the same security) you must apply to the Ethics Officer for
an exception (see Section VIII. below).
In addition to any other sanction provided for under the Code of
Ethics (see Section IX. D.), any profit realized from a transaction
within the prescribed period may be required to be surrender to FMR.
Transactions in accounts beneficially owned by you where investment
discretion has been provided to a third party in a written document
and for which you provide no input regarding investment decision
making will not be subject to this 7 day provision.
VII NON-ACCESS TRUSTEES
Pursuant to Rule 17j-1, a Non-Access Trustee need not file reports of
his or her transactions in reportable securities unless at the time of
the transaction the Board member knew, or in the ordinary course of
fulfilling his or her duties as a Fidelity Fund Board member should
have known: (a) that one or more of the Funds had purchased or sold or
was actively considering the purchase or sale of that security within
the 15-day period preceding the Board member's transaction, or (b)
that one or more Funds would be purchasing, selling or actively
considering the purchase or sale of that security within the 15 days
following the Board member's transaction. The knowledge in question
is the Board member's knowledge at the time of the Board member's
transaction, not knowledge subsequently acquired. Although a
Non-Access Trustee is not required to report transactions unless the
above conditions are met, the Boards of Trustees of the Funds have
adopted a policy that requires a Non-Access Trustee to report personal
securities transactions on at least a quarterly basis.
VIII. WAIVERS AND EXCEPTIONS
A. REQUESTS TO WAIVER A PROVISION OF THE CODE OF ETHICS.
An employee may request in writing to the Ethics Office a waiver of
any Code of Ethics provision. If appropriate, the Ethics Office will
consult with the Ethics Oversight Committee (a committee which
consists of representatives from senior management) in considering
such request. The Ethics Office will inform you in writing whether or
not the waiver has been granted. If you are granted a waiver to any
Code of Ethics provision, you will be expected to comply with all
other provisions of the Code. You may contact the Ethics Office for
specific requirements.
B EXCEPTIONS.
Special approval to make any trade prohibited by this Code may be
sought from the Ethics Office. Special approvals will be considered
on a case-by-case basis. The decision to grant special approval will
be based on whether the trade is consistent with the general
principles of this Code and whether the trade is consistent with the
interest of the relevant Fund(s). The Ethics Office will maintain a
written record of exceptions, if any, that are permitted.
IX. ENFORCEMENT
The Rules adopted by the SEC require that a code of ethics must not
only be adopted but must also be enforced with reasonable diligence.
Records of any violation of the Code and of the actions taken as a
result of such violations will be kept.
A. REVIEW.
The Ethics Office will review on a regular basis the reports filed
pursuant to this Code. In this regard, the Ethics Office will give
special attention to evidence, if any, of potential violations of the
antifraud provisions of the federal securities laws or the procedural
requirements or ethical standards set forth in this Code and the
Statement of Policies and Procedures with Respect to the Flow and Use
of Material Nonpublic (Inside) Information ("Insider Trading Policy
Statement" to follow).
The policies and procedures described in this Code do not create any
obligations to any person or entity other than the Fidelity Companies
and the Funds. This Code is not a promise or contract, and it may be
modified at any time. The Fidelity Companies and the Funds retain the
discretion to decide whether this Code applies to a specific
situation, and how it should be interpreted.
B. BOARD REPORTING.
The Ethics Office will provide to the Boards of Trustees of the Funds
no less frequently than annually a summary of significant sanctions
imposed for material violations of this Code or the Insider Trading
Policy Statement.
C. VIOLATIONS.
When potential violations of the Code of Ethics or the Insider Trading
Policy Statement come to the attention of the Ethics Office, the
Ethics Office may investigate the matter. This investigation may
include a meeting with the employee. Upon completion of the
investigation, if necessary, the matter will be reviewed with senior
management or other appropriate parties, and a determination will be
made as to whether any sanction should be imposed as detailed below.
The employee will be informed of any sanction determined to be
appropriate.
D. SANCTIONS.
Since violations of the Code or the Insider Trading Policy Statement
will not necessarily constitute violations of federal securities laws,
the sanctions for violations of the Code or the Insider Trading Policy
Statement will vary. Sanctions may be issued by (i) the appropriate
Board(s) of Trustees of the Fund(s) or Fidelity Company, (ii) senior
management, (iii) the Ethics Office, or (iv) other appropriate entity.
Sanctions may include, but are not limited to, (i) warning, (ii) fine
or other monetary penalty, (iii) personal trading ban, (iv) dismissal,
and (v) referral to civil or criminal authorities. Additionally,
other legal remedies may be pursued.
E.APPEALS PROCEDURES.
If you feel that you are aggrieved by any action rendered with respect
to a violation of the Code of Ethics or a waiver request, you may
appeal the determination by providing the Ethics Office with a written
explanation within 30 days of being informed of such determination.
The Ethics Office will arrange for a review by senior management or
other appropriate party and will advise you whether the action will be
imposed, modified or withdrawn. During the review process, you will
have an opportunity to submit a written statement. In addition, you
may elect to be represented by counsel of your own choosing.
APPENDIX -- BENEFICIAL OWNERSHIP
As used in the Code of Ethics, beneficial ownership will be
interpreted using Section 16 of the Securities Exchange Act of 1934
("1934 Act") as a general guideline, except that the determination of
such ownership will apply to all securities, including debt and equity
securities. For purposes of Section 16, a beneficial owner means:
Any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has or shares
a direct or indirect pecuniary interest in the securities.
In general, "pecuniary interest" means the opportunity, directly or
indirectly, to profit or share in any profit derived from a
transaction in the subject securities.
Using the above-described definition as a broad outline, the ultimate
determination of beneficial ownership will be made in light of the
facts of the particular case. Key factors to be considered are the
ability of the person to benefit from the proceeds of the security,
and the degree of the person's ability to exercise control over the
security.
1. SECURITIES HELD BY FAMILY MEMBERS. As a general rule, a person is
regarded as having an indirect pecuniary interest in, and therefore is
the beneficial owner of, securities held by any child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law (collectively, "immediate family")
sharing the same household. Adoptive relationships are included for
purposes of determining whether securities are held by a member of a
person's immediate family.
2. SECURITIES HELD BY A CORPORATION OR SIMILAR ENTITY. A person shall
not be regarded as having a direct or indirect pecuniary interest in,
and therefore shall not be the beneficial owner of, portfolio
securities held by a corporation or similar entity in which the person
owns securities provided that (i) the person is not a controlling
shareholder of the entity or (ii) the person does not have or share
investment control over the entity's portfolio securities. "Portfolio
securities" means all securities owned by an entity other than
securities issued by the entity. Business trusts are treated as
corporations for these purposes. In addition, the 1934 Act makes no
distinction between public and private corporations for purposes of
determining beneficial ownership.
3. SECURITIES HELD IN TRUST. In general, a person's interest in a
trust will amount to an indirect pecuniary interest in the securities
held by that trust. However, the following persons shall generally
not be deemed beneficial owners of the securities held by a trust:
a) Beneficiaries, unless (i) the beneficiary has or shares investment
control with the trustees with respect to transactions in the trust's
securities, (ii) the beneficiary has investment control without
consultation with the trustee, or (iii) if the trustee does not
exercise exclusive investment control, the beneficiary will be the
beneficial owner to the extent of his or her pro rata interest in the
trust.
b) Trustees, unless the trustee has a pecuniary interest in any
holding or transaction in the securities held by the trust. A trustee
will be deemed to have a pecuniary interest in the trust's holdings if
at least one beneficiary of the trust is a member of the trustee's
immediate family.
c) Settlors, unless a settlor reserves the right to revoke the trust
without the consent of another person; provided, however, that if the
settlor does not exercise or share investment control over the
issuer's securities held by the trust the settlor will not be deemed
to be the beneficial owner of those securities.
Indirect pecuniary interest for purposes of Section 16 also includes a
general partner's proportionate interest in the portfolio securities
held by a general or limited partnership.
Finally, beneficial ownership is not deemed to be conferred by virtue
of an interest in:
a) portfolio securities held by any holding company registered under
the Public Utility Holding Company Act of 1935;
b) portfolio securities held by any investment company registered
under the Investment Company Act of 1940; or
c) securities comprising part of a broad-based publicly-traded market
basket or index of stocks approved for trading by the appropriate
federal governmental authority.
EXAMPLES OF BENEFICIAL OWNERSHIP
1. Securities Held by Family Members
(a) Example 1-A:
X and Y are married. Although Y has an independent source of income
from a family inheritance and segregates her funds from those of her
husband, Y contributes to the maintenance of the family home. X and Y
have engaged in joint estate planning and have the same financial
adviser. Since X and Y's resources are clearly significantly directed
towards their common property, they will be deemed to be beneficial
owners of each other's securities.
(b) Example 1-B:
X and Y are separated and have filed for divorce. Neither party
contributes to the support of the other. X has no control over the
financial affairs of his wife and his wife has no control over his
financial affairs. Neither X nor Y is a beneficial owner of the
other's securities.
(c) Example 1-C:
X's adult son Z lives in X's home. Z is self-supporting and
contributes to household expenses. X is a beneficial owner of Z's
securities.
(d) Example 1-D:
X's mother A lives alone and is financially independent. X has power
of attorney over his mother's estate, pays all her bills and manages
her investment affairs. X borrows freely from A without being
required to pay back funds with interest, if at all. X takes out
personal loans from A's bank in A's name, the interest from such loans
being paid from A's account. X is a significant heir of A's estate.
X is a beneficial owner of A's securities.
2. Securities Held by a Company
(a) Example 2-A:
O is a holding company with 5 shareholders. X owns 30% of the shares
in the company. X will be presumed to have beneficial ownership of
the securities owned by O.
3. Securities Held in Trust
(a) Example 3-A:
X is trustee of a trust created for his two minor children. When both
of X's children reach 21, each will receive an equal share of the
corpus of the trust. X is a beneficial owner of the securities in the
trust.
(b) Example 3-B:
X is trustee of an irrevocable trust for his daughter. X is a
director of the issuer of the equity securities held by the trust.
The daughter is entitled to the income of the trust until she is 25
years old, and is then entitled to the corpus. If the daughter dies
before reaching 25, X is entitled to the corpus. X should report the
holdings and transactions of the trust as his own.
FIDELITY INVESTMENTS'
INSIDER TRADING POLICY STATEMENT
FORMALLY KNOWN AS
THE STATEMENT OF POLICIES AND
PROCEDURES ON INSIDER TRADING
JANUARY 1, 2000
STATEMENT OF POLICIES AND PROCEDURES
WITH RESPECT TO THE FLOW AND USE OF MATERIAL
NONPUBLIC (INSIDE) INFORMATION
INTRODUCTION
The Fidelity Companies' reputation for integrity and high ethical
standards in the conduct of their affairs is of paramount importance
to all of us. To preserve this reputation, it is essential that all
transactions in securities be effected in conformity with applicable
securities laws. In particular, it has been the Fidelity Companies'
long-standing policy that no employee should knowingly trade in
securities on the basis of material, nonpublic information. This is
sometimes referred to as "insider trading".
For many years, the Fidelity Companies have operated under a written
Code of Ethics. The Code prohibits trading by employees and their
family members which is in conflict with trading by the Funds. It
establishes a broad range of restrictions and trading procedures for
employees who have access to information relating to fund or account
investment activity. This Statement of Policies and Procedures (the
"Statement") is issued in response to legislative and regulatory
initiatives and activities, and constitutes a written supplement to
the principles of the Code of Ethics.
In November, 1988, the Insider Trading and Securities Fraud
Enforcement Act of 1988 ("the Act") was enacted into law. The Act is
designed to add to the enforcement of securities laws, particularly in
the area of insider trading, by imposing severe penalties on persons
who violate the laws by trading on material, nonpublic information.
The Act also imposes on broker-dealers and investment advisers the
explicit obligation to establish, maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of
inside information. In addition, in recent years insider trading has
become a top enforcement priority of the SEC and the United States
Attorneys. As a result of insider trading violations, both the firm
and the employee(s) involved could be subject to disciplinary action
or fines by the SEC, damage actions brought by private parties and
criminal prosecutions.
PURPOSE OF STATEMENT
The purpose of this statement is to explain: (1) the general legal
prohibitions regarding insider trading; (2) the meaning of the key
concepts underlying the prohibition; (3) the sanctions for insider
trading and expanded liability for controlling persons; (4) your
obligations in the event you learn of material, nonpublic information;
and (5) Fidelity's educational program regarding insider trading.
APPLICABILITY
This Statement applies to all officers, directors and employees of all
Fidelity Companies, and any that may be formed in the future. In
addition, this statement applies to employees seconded to Fidelity
Management & Research Company (FMR) or Fidelity Management Trust
Company (FMTC) from Fidelity International Limited (FIL).
I THE BASIC INSIDER TRADING PROHIBITION
The Act does not define insider trading. However, in general, the
"insider trading" doctrine under federal securities laws prohibits any
person (including investment advisers) from knowingly or recklessly
breaching a duty owed by that person:
(solid bullet) trading while in possession of material, nonpublic
information;
(solid bullet) communicating ("tipping") such information to others;
(solid bullet) recommending the purchase or sale of securities on the
basis of such information; or
(solid bullet) providing substantial assistance to someone who is
engaged in any of the above activities.
In addition, an SEC rule prohibits an individual from trading while in
possession of material, nonpublic information relating to a tender
offer, whether or not trading involves a breach of duty, except for a
firm acting in compliance with Chinese Wall procedures. See Section
IV. B. below.
NO FIDUCIARY DUTY TO USE INSIDE INFORMATION. Although various
Fidelity Companies, including FMR and FMTC, have a fiduciary
relationship with their clients, they have no legal obligation to
trade or recommend trading on the basis of information their employees
know to be "inside" information. In fact, such conduct could violate
the federal securities laws.
NO BROKERAGE ALLOCATION FOR INSIDE INFORMATION. Although the Fidelity
Companies have adopted policies which permit consideration of the
receipt of research and brokerage services in selecting brokers to
execute client portfolio transactions, it is the policy of the firm
not to allocate brokerage in consideration of receipt of "inside"
information.
II. BASIC CONCEPTS
As noted the Act did not specifically define insider trading.
However, federal law prohibits knowingly or recklessly purchasing or
selling directly or indirectly a security while in possession of
material, nonpublic information or communicating ("tipping") such
information in connection with a purchase or sale. Under current case
law, the Securities and Exchange Commission ("SEC") must establish
that the person misusing the information has breached either a
fiduciary duty to the shareholders or some other duty not to
misappropriate insider information.
Thus, the key aspects of insider trading are: (A) materiality, (B)
nonpublic information, (C) knowing or reckless action and (D) breach
of fiduciary duty or misappropriation. Each aspect is briefly
discussed below.
A. MATERIALITY. Insider trading restrictions arise only when
information that is used for trading, recommending or tipping is
"material." Information is considered "material" if there is a
substantial likelihood that a reasonable investor would consider it
important in making his or her investment decisions, or if it could
reasonably be expected to affect the price of a company's securities.
It need not be so important that it would have changed the investor's
decision to buy or sell. On the other hand, not every tidbit of
information about a security is material. The courts have held that
information that merely tests "the meaning of public information" or
that fills in the mosaic of various pieces of research analysis is not
material.
B. NONPUBLIC INFORMATION. Information is considered public if it has
been disseminated in a manner making it available to investors
generally (e.g., national business and financial news wire services,
such as Dow Jones and Reuters; national news services, such as
Associated Press, New York Times or Wall Street Journal; broad tapes;
SEC reports; brokerage firm reports). Just as an investor is
permitted to trade on the basis of nonpublic information that is not
material, he or she may also trade on the basis of information that is
public. However, information given by a company director to an
acquaintance of an impending takeover prior to that information being
made public would be considered both "material" and "nonpublic."
Trading by either the director or the acquaintance prior to the
information being made public would violate the federal securities
laws.
C. KNOWING. Under the federal securities laws, a violation of the
insider trading limitations requires that the individual act with
"scienter" -- with knowledge that his or her conduct may violate these
limitations or in a reckless manner. Recklessness involves acting in
a manner which ignores circumstances which a reasonable person would
conclude would result in a violation of insider trading limitations.
D. FIDUCIARY DUTY. The general tenor of recent court decisions is
that insider trading does not violate the federal securities laws if
the trading, recommending or tipping of the insider information does
not result in a breach of duty. Over the last decade, the SEC has
brought cases against accountants, lawyers and stockbrokers because of
their participation in a breach of an insider's fiduciary duty to the
corporation and its shareholders. The SEC has also brought cases
against noncorporate employees who misappropriated information about a
corporation and thereby allegedly violated their duties to their
employers. Consequently, the situations in which a person can trade
on the basis of material, nonpublic information without raising a
question whether a duty has been breached are so rare, complex and
uncertain that the only prudent course is not to trade, tip or
recommend based on inside information. In addition, trading by an
individual while in possession of material, nonpublic information
relating to a tender offer is illegal irrespective of whether such
conduct breaches a fiduciary duty of such individual. Set forth below
are several situations where courts have held that such trading
involves a breach of fiduciary duty or is otherwise illegal.
CORPORATE INSIDER. In the context of interviews or other contact with
corporate management, the Supreme Court held that an investment
analyst who obtained material, nonpublic information about a
corporation from a corporate insider does not violate insider trading
restrictions in the use of such information unless the insider
disclosed the information for "personal gain." However, personal gain
may be defined broadly to include not only a pecuniary benefit, but
also a reputational benefit or a gift. Moreover, selective disclosure
of material, nonpublic information to an analyst might be viewed as a
gift.
TIPPING INFORMATION. The Act includes a technical amendment
clarifying that tippers can be sued as primary violators of insider
trading prohibitions, and not merely as aidors and abettors of a
tippee's violation. In enacting this amendment, Congress intended to
make clear that tippers cannot avoid liability by misleading their
tippees about whether the information conveyed was nonpublic or
whether its disclosure breached a duty. However, Congress recognized
the crucial role of securities analysts in the smooth functioning of
the markets, and emphasized that the new direct liability of tippers
was not intended to inhibit "honest communications between corporate
officials and securities analysts."
CORPORATE OUTSIDER. Additionally, liability could be established when
trading occurs based on material, nonpublic information that was
stolen or misappropriated from any other person, whether a corporate
insider or not. An example of an area where trading on information
may give rise to liability, even though from outside the company whose
securities are traded, is material, nonpublic information secured from
an attorney or investment banker employed by the company.
TENDER OFFERS. The SEC has adopted a rule specifically prohibiting
trading while in possession of material information about a
prospective tender offer before it is publicly announced. This rule
also prohibits trading while in possession of material information
during a tender offer which a person knows or has reason to know is
not yet public. Under the rule, there is no need for the SEC to prove
a breach of duty. Furthermore, in the SEC's view, there is no need to
prove that the nonpublic, material information was actively used in
connection with trading before or during a tender offer. However,
this rule has an exception that allows trading by one part of a
securities firm where another part of that firm has material,
nonpublic information about a tender offer if certain strict (Chinese
Wall) procedures are followed. See Section IV. B. below.
III. SANCTIONS AND LIABILITIES
A. SANCTIONS. Insider trading violations may result in severe
sanctions being imposed on the individual(s) involved and on Fidelity
Companies. These could involve SEC administrative sanctions, such as
being barred from employment in the securities industry, SEC suits for
disgorgement and civil penalties of, in the aggregate, up to three
times profits gained or losses avoided by the trading, private damage
suits brought by persons who traded in the market at about the same
time as the person who traded on inside information, and criminal
prosecution which could result in substantial fines and jail
sentences. Even in the absence of legal action, violation of insider
trading prohibitions or failure to comply with this Statement and the
Code may result in termination of your employment and referral to the
appropriate authorities.
B. CONTROLLING PERSONS. The Act increases the liability of
"controlling persons" -- defined to include both an employer and any
person with the power to influence or control the activities of
another. For purposes of the Act, any individual or firm that is a
director or officer exercising policy making responsibility is
presumed to be a controlling person. Thus, a controlling person may
be liable for another's actions as well as his or her own.
A controlling person of an insider trader or tipper may be liable if
such person failed to take appropriate steps once such person knew of,
or recklessly disregarded the fact that the controlled person was
likely to engage in, a violation of the insider trading limitations.
The Act does not define the terms, but "reckless" is discussed in the
legislative history as a "heedless indifference as to whether
circumstances suggesting employee violations actually exist."
A controlling person of an insider trader or tipper may also be liable
if such person failed to adopt and implement measures reasonably
designed to prevent insider trading. This Statement and the Code are
designed for this purpose, among others.
IV. PROCEDURES TO BE FOLLOWED WHEN RECEIVING INSIDE INFORMATION
A. GENERAL. Whenever an employee receives what he or she believes may
be material, nonpublic information, he or she
(solid bullet) should not trade on his or her own behalf or on behalf
of a Fund, private proprietary accounts or other accounts in the
securities to which the information relates, tip the information to
others or recommend purchase or sale of securities while that
information remains nonpublic.
(solid bullet) should promptly contact the Legal Department and
refrain from disclosing the information to anyone else, including
persons within the Fidelity organization, unless specifically advised
to do so by the Legal Department.
B. CHINESE WALLS. Employees of the Fidelity Companies may from time
to time receive inside information in the normal course of their job
related responsibilities. For example, employees of FMR and FMTC in
the high yield bond area may be provided with material, nonpublic
information on a confidential basis in connection with their potential
purchase of high yield bonds to be issued in an acquisition or
corporate restructuring. Of course, such employees will be precluded
from trading or recommending action with respect to the securities of
the target or bidding company. However, it is possible to limit these
constraints to such employees by constructing a "Chinese Wall" between
them and other Fidelity investment personnel.
The following policies and procedures are designed to prevent the flow
of material, nonpublic information about a public company from
employees with knowledge of such information ("Confidential
Employees") to others involved in the Fidelity Companies' investment
and investment management activities. In most instances, following
these policies and procedures will permit these other investment
personnel to continue trading and recommending the company's
securities.
1. ACKNOWLEDGMENT LETTERS. Before receiving material, nonpublic
information about a company in connection with a prospective tender
offer or other event, every Confidential Employee will be required to
submit to the General Counsel of FMR Corp. or FMR a letter
acknowledging their responsibilities and the limitations on their
activities regarding the subject company(ies).
2. ORAL AND WRITTEN COMMUNICATIONS. Confidential Employees receiving
material, nonpublic information about a company or Confidential
Employees receiving nonpublic information about a company in
connection with an analytical assignment should not discuss or
exchange ANY such information with any Fidelity employees unless they
are also Confidential Employees. For example, this would specifically
preclude a high yield bond analyst who is a Confidential Employee from
discussing any such information with, or signaling that a company was
under review to, any other Fidelity employee (including another member
of the high yield bond group) who was not a Confidential Employee.
3. ATTENDANCE AT MEETINGS. Attendance at any meetings at which such
material, nonpublic information is to be discussed, and dissemination
of the notes from such meetings, shall be limited to Confidential
Employees.
4. ACCESS TO FILES. Access to files containing any material,
nonpublic information provided to Confidential Employees shall be
prohibited to any investment management personnel and any other
employee except another Confidential Employee.
C. COMPLIANCE
1. TRADE REPORTING. All Fidelity employees are required to report all
personal and beneficially owned securities transactions to the Ethics
Office. The Ethics Office regularly reviews these personal
transactions relative to the securities trades of the Funds, and may
undertake a special review if deemed necessary or appropriate, if the
Ethics Office has reason to believe that any Fidelity employee has
engaged, is engaged or is about to engage in insider trading. The
Ethics Office will consult with FMR Corp. Compliance where
appropriate.
2. TRADING. As required by the Code of Ethics, all securities
transactions by employees and accounts of which they are beneficial
owner (as defined within the Code of Ethics) must be effected through
Fidelity Brokerage Services, Inc. unless special permission is granted
in writing by the Ethics Office to utilize another broker-dealer. If
another broker-dealer is used, duplicate confirmations and account
statements must be provided to the Ethics Office. In addition, trades
effected by Access Persons, Investment Professionals and Senior
Executives must be effected in accordance with the procedures for
clearance of personal securities transactions as outlined in the Code
of Ethics.
3. REPORTING TO THE LEGAL DEPARTMENT. Whenever an employee receives
what he or she believes to be material, nonpublic information about a
security or becomes aware that such information has been utilized by
another employee in the purchase or sale of a security, he or she
shall immediately notify the General Counsel of FMR Corp. or FMR.
"Immediately" means as soon as humanly practical. Employees are
expected to bring this information immediately to the attention of the
General Counsel of FMR Corp. or FMR and refrain from disclosing the
information to ANYONE else, including persons within the Fidelity
organization, unless specifically advised to do so by such General
Counsel.
4. CONTACTS. All Fidelity employees must consult with the Legal
Department before communicating (orally or in writing) with the SEC or
any other regulatory agency about insider trading or related matters.
Similarly, all Fidelity employees must consult with the Public
Relations Department before communicating (orally or in writing) with
any representative of the newspapers or other mass media on insider
trading or related matters.
V. EMPLOYEE EDUCATION
To ensure that every employee of FMR and FMTC understands the firm's
policies and procedures with respect to insider trading, the following
will occur:
A. INITIAL REVIEW FOR NEW EMPLOYEES. All new employees will be given
a copy of this Statement along with the Code of Ethics at the time of
their employment and will be required to read and sign each. A
representative of Fidelity will review the Statement with each new
research analyst, portfolio manager and trader at the time of his or
her employment.
B. ANNUAL REVIEW WITH INVESTMENT PROFESSIONALS. A representative of
the Ethics Office will review this Statement and the Code of Ethics at
least annually with all research analysts, portfolio managers, traders
and other investment personnel.
C. ANNUAL CERTIFICATION. Fidelity employees may be required by
Fidelity management to certify compliance with this statement in
writing on at least an annual basis.
FIDELITY INVESTMENTS'
PERSONAL CONDUCT RULES
JANUARY 1, 2000
PERSONAL CONDUCT RULES
FOR BROKER-DEALER EMPLOYEES
AND REGISTERED PERSONS ONLY
CORPORATE COMPLIANCE OVERSEES Fidelity is committed to
COMPLIANCE FOR FIDELITY'S delivering products and
BROKER-DEALERS, TRANSFER services to its customers in
AGENTS AND RETAIL INVESTMENT accordance with the highest
ADVISORS, AND ISSUES THE standards of integrity. In
PERSONAL CONDUCT RULES. furtherance of that goal,
Corporate Compliance has
implemented the Personal
Conduct Rules. The contents
of the Personal Conduct
Rules are driven by
regulatory rules (of the
Securities and Exchange
Commission, New York Stock
Exchange, and National
Association of Securities
Dealers, Inc.) pertaining to
the personal conduct of
broker-dealer employees, and
by Fidelity policies
designed to create a work
environment that avoids
violations of rules, and the
APPEARANCE of violations of
rules, conflicts of interest
and impropriety. For
broker-dealer employees and
registered persons only
(hereinafter referred to as
"employees"), acknowledgment
of this distribution will
constitute acknowledgment of
receipt and review of these
Personal Conduct Rules.
Violation by an employee of
any of these rules may
result in disciplinary
action up to and including
termination of employment
with Fidelity.
THE ETHICS OFFICE OVERSEES Although Corporate Compliance
COMPLIANCE FOR THE FUND will monitor for compliance
COMPANIES AND ISSUES THE with the Personal Conduct
CODE OF ETHICS FOR PERSONAL Rules, as with any
INVESTING AND THE INSIDER initiative relating to
TRADING POLICY STATEMENT. personal conduct, successful
compliance depends on
self-implementation by
conscientious employees
dedicated to maintaining the
highest standards of
personal responsibility and
professional conduct.
Employees with questions
regarding the Personal
Conduct Rules should contact
their manager or Corporate
Compliance Advisor.
1. EMPLOYEE AND FAMILY
BROKERAGE ACCOUNTS MUST BE
DISCLOSED
EXTERNAL BROKERAGE ACCOUNT In accordance with the
STATEMENTS MUST BE FORWARDED Fidelity Code of Ethics, the
TO: brokerage accounts of
CORPORATE COMPLIANCE DEPT. employees and "immediate
ATTN: SURVEILLANCE, 82 family" (as defined in the
DEVONSHIRE STREET, G12A, appendix to the Code of
BOSTON, MA 02109-3614 Ethics) members must be
disclosed to the Fidelity
Ethics Office and generally
must be maintained by FBSI.
Employee and immediate
family member brokerage
accounts will be reviewed by
Corporate Compliance and the
employee's manager or a
person designated by the
employee's company.
Employee and immediate
family member commodities
accounts must also be
disclosed and reviewed, but
cannot be maintained at FBSI
(FBSI does not carry
commodities accounts).
Employees are responsible
for furnishing Corporate
Compliance with their
external account statements
IMMEDIATELY after they begin
employment with Fidelity.
Employees are prohibited from:
(solid bullet) Sharing in the
profits or losses of any
brokerage account not
disclosed to the Fidelity
Ethics Office and in which
the employee is not an
accountholder (such as the
account of a customer,
relative or friend), or
mutual fund or commodities
account in which the
employee is not an
accountholder.
(solid bullet) Using
fictitious or nominee
accounts.
THE EMPLOYEE TRADING GATE 2. TRADING ACTIVITY MUST BE
NUMBER IS: CONDUCTED THROUGH FIDELITY
800-343-2428 AUTOMATED BROKERAGE SERVICES
OR THE EMPLOYEE TRADING GATE
Employees must use Fidelity's
automated services, or, if
necessary, the Employee
Trading Gate, for all FBSI
brokerage transactions.
Employees must use the
Employee Trading Gate for
all trade-related
adjustments to their
brokerage or mutual fund
accounts.
Employees are prohibited from:
(solid bullet) Having
commissions adjusted on
personal or immediate family
member trades without
authorization from the
employee's manager and
Corporate Compliance
(solid bullet) Entering
trades or adjustments, or
performing maintenance (such
as address changes and
dividend instructions), on
their accounts or the
accounts of their immediate
family members
(solid bullet) Transferring
or journaling securities
and/or funds between their
accounts and other accounts
(solid bullet) Violating any
of the provisions of the
customer agreement that they
sign to open their accounts
General inquiries and
maintenance requests do not
have to go through
Fidelity's automated
services or the Employee
Trading Gate.
ADDITIONAL TRADING 3. EMPLOYEES MUST NOT MAKE
RESTRICTIONS SUCH AS INSIDER TRADES THAT VIOLATE
TRADING, EXCESSIVE TRADING, REGULATIONS OR FIDELITY POLICY
SHORT SALES AND PURCHASING
PUTS AND SELLING CALLS ARE Employees are prohibited from
LISTED IN THE CODE OF ETHICS. the following trading
activities:
(solid bullet) Trading ahead
of (frontrunning),
immediately after
(tailgating), or in tandem
with, orders of customers or
other Fidelity employees
(solid bullet) Purchasing an
initial public offering
(IPO) for themselves or an
THE CODE OF ETHICS LISTS immediate family member
ADDITIONAL TRADING
RESTRICTIONS FOR INVESTMENT (solid bullet) Placing orders
PROFESSIONALS, SENIOR for opening positions of 51
FIDELITY OFFICIALS AND or more option contracts on
ACCESS PERSONS. one side of the market for
one security without the
prior approval of the
employee's manager
(solid bullet) Placing orders
for opening positions in the
employee's brokerage account
for $75,000 or more without
the prior approval of the
employee's manager
(solid bullet) Contacting
other broker-dealers to
prearrange trades for their
accounts
(solid bullet) Entering into
cross transactions between
the employee's account and
any other account without
obtaining prior approval
from the employee's manager
and Corporate Compliance;
for example, if a customer
is selling a bond, the
employee may not buy it for
his/her own account, without
the appropriate approvals
(solid bullet) Entering into
any purchase or sale of any
security, option or
commodity which would be in
violation of federal and/or
state securities laws or the
rules and regulations of the
various exchanges, markets
or other regulatory agencies
Additional trading
prohibitions are listed in
the Code of Ethics and
Fidelity Insider Trading
Policy, which are attached
to this distribution.
4. EMPLOYEES MUST PAY IN FULL
FOR SECURITIES AND MAY NOT
USE LOANS TO MAKE THEIR
PURCHASE
(solid bullet) Employees must
pay for all their securities
purchases, and deliver
securities for securities
sales, on a timely basis -
employees will not be
granted payment extensions
in their accounts
(solid bullet) Employees may
not buy and then sell the
same security without paying
for the purchase in full by
the settlement date of the
purchase (otherwise known as
"freeriding")
(solid bullet) Employees may
not purchase a security, and
instead of paying for it in
full, sell another security
(other than a money market
account) after the trade
date of the purchase and
apply the proceeds to the
purchase, unless both trades
settle on the same day
(solid bullet) Employees are
prohibited from obtaining
loans or credit (other than
through a margin account)
from banks or other lenders
for the purpose of buying
securities
APPROVAL IS NOT NECESSARY 5. OBTAINING DISCRETIONARY
FROM CORPORATE COMPLIANCE OR AUTHORITY OVER A CUSTOMER
THE EMPLOYEE'S MANAGER FOR ACCOUNT IS PROHIBITED
AN EMPLOYEE TO ACT AS
CUSTODIAN FOR UTMA/UGMA Fidelity policy states that,
ACCOUNTS FOR A RELATED CHILD. generally, no employee may
exercise discretionary
authorization over a
brokerage or mutual fund
account in which he or she
has no beneficial interest.
Under limited circumstances,
employees may, however, be
granted trading
authorization over brokerage
accounts - but not mutual
fund accounts - of an
incapacitated immediate
family member or relative.
Employees seeking trading
authorization over a
brokerage account must
complete and submit the
Request for Approval of
Trading Authorization form
(Exhibit I) and receive
PRIOR WRITTEN APPROVAL from
their manager and Corporate
Compliance. Additional
documentation may be
required. If permission to
exercise trading
authorization is granted,
all trades entered pursuant
to such authorization must
be conducted in accordance
with all provisions of the
Personal Conduct Rules and
the Code of Ethics. In
addition, such trades must
be conducted through the
Employee Trading Gate - NOT
THROUGH FIDELITY'S AUTOMATED
SERVICES - and will be
reviewed by the employee's
manager.
Acting as custodian for
UTMA/UGMA accounts for a
related child, or as trustee
for a personal, immediate
family, or parent's trust
account does NOT require
approval.
WRITTEN APPROVAL IS REQUIRED 6. PRIOR WRITTEN APPROVAL IS
PRIOR TO ENGAGING IN A REQUIRED FOR PRIVATE
PRIVATE SECURITIES TRANSACTION SECURITIES TRANSACTIONS
Employees must request in
writing and receive written
approval from their manager
and Corporate Compliance
before they offer, buy,
sell, create, transfer,
exchange or in any way
participate (E.G., as an
agent) in a private
securities transaction. A
"private securities
transaction" is a securities
transaction made outside the
regular course or scope of
employment and/or not made
through a Fidelity or
authorized external account.
Examples are transactions in:
(solid bullet) Securities of
privately held companies
(except in FMR shares or
other FMR instruments)
(solid bullet) Private
placements
(solid bullet) Non-publicly
traded limited partnerships
(solid bullet) Securities
between two parties without
the use of a broker-dealer
intermediary
(solid bullet) Certain
securities not registered
with the SEC
Employees requesting approval
must complete and submit the
Request for Approval of
Private Securities
Transaction form (Exhibit
J). Approval will generally
be denied to employees
requesting to act as a
securities solicitor or
broker for a person or
entity not affiliated with
Fidelity.
Transactions between an
employee and an immediate
family member do not require
approval unless the employee
receives compensation.
MANAGERS AND CORPORATE 7. CERTAIN OUTSIDE ACTIVITIES
COMPLIANCE WILL DETERMINE MAY PRESENT CONFLICTS OF
WHETHER EMPLOYMENT OUTSIDE INTEREST
OF FIDELITY PRESENTS A
POSSIBLE CONFLICT OF Engaging in certain
INTEREST OR APPEARANCE OF activities which are outside
IMPROPRIETY. the scope or regular course
of employment at Fidelity
may require pre-approval or
be prohibited. For example,
the following activities
require prior approval:
(solid bullet) Employment
outside of Fidelity
(solid bullet) Running for
political office
(solid bullet) Raising money
for a business venture
(solid bullet) Certain
speaking engagements and
writing activities
(solid bullet) Acting as a
trustee for compensation
Other activities are
prohibited, such as lending
or loaning money to a
customer, and giving any
gift or remuneration to
anyone for referring
securities business.
Employees should consult
with their manager prior to
engaging in ANY activity or
affiliation that could
present a conflict of
interest or which could
interfere with an employee's
ability to effectively
perform his/her job.
Fidelity's "Outside
Activities and Affiliations"
policy and "Publications,
Speeches and Endorsements"
policy specify activities
that require prior approval.
Employees may obtain an
approval request form from
the HR Web at
http://mgs.fmr.com/hr/polproc.
FIDELITY'S "OUTSIDE 8. CERTAIN GIFTS RECEIVED OR
ACTIVITIES AND GIVEN BY EMPLOYEES MUST BE
AFFILIATIONS", REPORTED
"PUBLICATIONS, SPEECHES AND
ENDORSEMENTS", AND "GIFTS Certain gifts given to or
AND GRATUITIES" POLICIES ARE received by employees from
AVAILABLE ON THE HR WEB. prospective or current
customers, suppliers or
vendors, must be reported to
Corporate Compliance. In
addition, there are
restrictions as to the type
and value of gifts that
employees may give and
receive. For example,
Fidelity generally prohibits
employees from giving or
receiving gifts with a value
of more than $100 per
calendar year, although
certain Fidelity business
units have a lower
threshold. Fidelity's
"Gifts and Gratuities"
policy specifies what is
considered a reportable
gift, as well as the type
and value of gifts that may
be received. Employees
should contact their
managers to determine their
companies' thresholds.
EMPLOYEES MUST NOTIFY 9. EMPLOYEES MUST REPORT
CORPORATE COMPLIANCE IF THEY CERTAIN EVENTS TO CORPORATE
ARE THE SUBJECT OF CERTAIN COMPLIANCE
LITIGATION, AN ARREST, A
BANKRUPTCY, AN UNSATISFIED The NASD and NYSE require
JUDGMENT OR A DENIED BONDING. that firms report certain
events involving the member
firm or its registered
persons and employees. In
addition, registered persons
are required to keep their
Forms U-4 current. An
employee must contact
Corporate Compliance if the
employee, or an organization
with whom the employee is
affiliated, is:
(solid bullet) The subject of
litigation, arbitration,
investigation or a
proceeding involving
investment-related activity
or conduct alleged to be
dishonest, unfair or unethical
(solid bullet) Arrested,
arraigned, convicted,
indicted, or pleads guilty
or no contest, in connection
with any criminal offense
(other than a minor traffic
violation)
(solid bullet) The subject of
a bankruptcy
(solid bullet) The subject of
an unsatisfied judgment
(solid bullet) Denied
bonding, or has bonding paid
out or revoked
(solid bullet) Engaged in
employment outside Fidelity
Corporate Compliance, in
consultation with the
employee, will make a
determination whether the
event should be reported to
the NASD or NYSE.
FIDELITY'S ELECTRONIC 10. EMPLOYEES SHOULD BE
COMMUNICATIONS USAGE POLICY FAMILIAR WITH OTHER RULES
CONTAINS POLICIES REGARDING AND RESOURCES PERTAINING TO
THE USE OF ELECTRONIC MAIL, PERSONAL CONDUCT
THE INTERNET AND THE
FIDELITY INTRANET. Other resources which specify
Fidelity policy concerning
activities and/or events
within the purview of
"personal conduct" include
the Fidelity broker-dealer
Compliance Manuals. For
QUESTIONS REGARDING THE example, the Compliance
PERSONAL CONDUCT RULES MAY Manuals may address Fidelity
BE DIRECTED TO THE CORPORATE policy pertaining to:
COMPLIANCE DEPARTMENT AT:
617-563-3149 (solid bullet) The
circulation of rumors
(solid bullet) Personal
investment advice and
recommendations
(solid bullet) Personal
correspondence
(solid bullet) Contact with
regulators and/or the media
(solid bullet) Political
contributions
Another critical resource is
Fidelity's Electronic
Communications Usage Policy,
which is available on the HR
Web..
In addition, other employee
personal conduct
responsibilities are
addressed in Fidelity's
Professional Conduct
Policies (which can be
accessed on the HR Web),
Code of Ethics and Employee
Handbook.
These Personal Conduct Rules
are not intended to be
all-inclusive. Whenever an
employee thinks that an
activity which occurs
outside the scope or regular
course of employment may
create an environment or
appearance of impropriety or
conflict of interest, the
employee should discuss the
activity with his/her
manager and/or Corporate
Compliance. Working
together for excellence,
Fidelity employees and their
supervisors and compliance
advisors will continue to be
the cornerstone of
Fidelity's reputation for
integrity.
EXHIBITS
JANUARY 1, 2000
Exhibit B
REPORT OF SECURITIES TRANSACTIONS
To:
The Ethics Office
82 Devonshire Street, N8A
Boston, MA 02109
_____________________________ _____________________________
Date Signature
______________________________ _____________________________
Your Social Security Number Please Print Your Name
For the Month of ____________, 19____
The following is a record of every transaction which I had, or by
reason of which I acquired, any direct or indirect beneficial
ownership during the month of _________, 2000 (excluding (1)
transactions effected in any account over which I had no direct or
indirect influence or control; (2) transactions in mutual fund shares,
money market securities, or direct obligations of the United States,
or instrumentalities thereof; and (3) transactions previously reported
automatically by Fidelity Brokerage Services, Inc., or via duplicate
confirmations and statements from an approved external brokerage
account):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TRADE DATE BUY OR SELL # OF UNITS SECURITY NAME PRICE PER UNIT BROKERAGE ACCOUNT # BROKER/ PRIVATE PLACEMENT
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
__________ ___________ ___________ _____________ ______________ ___________________ _________________________
</TABLE>
PLEASE FILL IN ALL NECESSARY INFORMATION IN EVERY COLUMN
Note 1: For the transactions which have been marked by me with an
asterisk (*), this report shall not be construed as an admission by me
that I have acquired any direct or indirect beneficial ownership in
the securities involved in the reported transactions. Such
transactions are reported solely to meet the standards imposed by the
Investment Company Act Release No. 4516.
Exhibit C
PRIVATE PLACEMENT APPROVAL REQUEST
INVESTMENT PROFESSIONALS AND SENIOR EXECUTIVES ONLY
DATE SUBMITTED: ___________________
______________________________________ _______________________
Employee Name (please print) Social Security Number
Employee Group (check one):
High Yield Equity Fixed Income Money Market
Trading FCM FMTC CORP Other: ________________
1. Company Name
2. Business Operations Summary
3. Who contacted you regarding this investment?
4. Which firm employs this individual? ______
5. Does the above individual or firm have a relationship with the
Fidelity Funds? If yes, please explain.
6. What is the individual's relationship to the company?
7. What is your relationship to the contact person?
8. What is the total amount of the private placement?
9. What is the value of your proposed investment?
10. Does this company have publicly traded securities?
11. Is this investment suitable for the funds? Yes No
If no, please explain.
_____________________________________________________________________
_____________________________________________________________________
______________________________________________________________________
___________________________________ Approved Disapproved
Employee Signature
______________________________
Division Head Signature and Date
______________________________
Ethics Office Signature and Date
Exhibit D
SHORT-TERM PROFIT RECOVERY
INVESTMENT PROFESSIONALS AND SENIOR EXECUTIVES ONLY
Section VI. C. of the Code of Ethics provides for the surrender of
any profit realized by an Investment Professional or Senior Executive
on transactions in the same or equivalent security within 60 days.
This applies to the purchase and sale (or sale and purchase) of a
security within a 60-day period in any beneficially owned account.
The following are various questions and answers to help you
understand this provision. If you have any further questions
regarding this provision, you should contact the Ethics Office, at
8-563-5566, internally, or (617)563-5566, externally.
Q. How is the 60-day period measured?
A. A purchase or sale is ordinarily deemed to occur on trade date. If
a purchase is considered to be made on day 0, day 61 is the first day
a sale of those securities may be made without regard to the profit
recovery rule.
Q. How are profits measured when there is a series of purchases and
sales within a 60 calendar day period?
A. A series of purchases and sales will be measured on a first-in,
first-out basis until all purchase and sale transactions within a
60-day period are matched. The sum of the profits realized on these
paired purchases and sales will be subject to surrender. No reduction
will be made for losses.
Q. Is a short sale of a security considered a sale?
A. Yes, a short sale is considered a sale for all purposes (reporting,
pre-clearance and the 60-day profit recovery rule). It is important
to keep in mind that when profits are computed under the 60-day rule,
the order of the transactions is not relevant in calculating profit;
for example, a sale (or short sale) can be matched against a
subsequent purchase. Please note that naked short sales are
prohibited under the Code of Ethics.
DERIVATIVE TRANSACTIONS
For the purposes of reporting, pre-clearance and the 60-day profit
recovery rule, a transaction in any put or call option (except an
option on an exempt security or index) or any future on a security
(except a future on an exempt security or index), will be treated as a
derivative transaction. For the purposes of this Code, derivative
transactions will be divided into two categories: "call equivalent
positions" and "put equivalent positions." A "call equivalent
position" is treated as a purchase of the underlying security.
Conversely, a "put equivalent position" is treated as a sale of the
underlying security. Please note that writing or acquiring naked
options are prohibited under the Code of Ethics.
Q. Does this mean that if I purchase a security and later hedge it
with a put, the two transactions will be matched if they occur within
60 days of each other?
A. Yes, the purchase of the put on the security would be considered a
sale and matched with the prior purchase.
Q. If a call option is exercised, does that constitute a purchase?
A. No. Generally, it is the acquisition of the call that constitutes
the purchase transaction for the purpose of the 60-day profit recovery
rule. Exercise of the call will not result in a recoverable profit;
the purchase will be treated as having occurred as of the date the
call option was acquired. For example, the sale of any shares
received due to exercise of an option will be analyzed for profit
recovery purposes if there are purchase transactions in such
securities within the most recent 60 calendar day period, including
the purchase of the call option for such shares.
Q. If a put option is exercised, does that constitute a sale?
A. No. Generally, it is the acquisition of the put that constitutes
the sale transaction. Exercising the put will not result in a
recoverable profit; the sale will be treated as having occurred on the
date that the put option was acquired.
Q. Am I effectively foreclosed from acquiring an option with a term of
60 days or less?
A. Not necessarily. For example, exercising a call option and
receiving the underlying securities will not constitute a sale. Of
course, a sale of the securities received or of the option itself will
constitute a sale which would be matched against any purchase within
60 days.
Exhibit E
PERSONAL BROKERAGE ACCOUNT DISCLOSURE
ALL NEW EMPLOYEES MUST COMPLETE WITHIN 7 DAYS OF HIRE
_____________________________________ ________________________________
Social Security Number) Name (Please Print
_____________________________________
Your Manager's Name
(solid bullet) SEND THE COMPLETED FORM TO THE ETHICS OFFICE, N8A
WITHIN 7 DAYS OF YOUR DATE OF HIRE.
(solid bullet) DISCLOSE IN THE SPACE PROVIDED BELOW ALL PERSONAL
BROKERAGE ACCOUNTS AND BROKERAGE ACCOUNTS IN WHICH YOU HAVE BENEFICIAL
OWNERSHIP.
INCLUDE ANY BROKERAGE ACCOUNTS CURRENTLY MAINTAINED WITH FIDELITY
BROKERAGE SERVICES, INC. (FBSI) AS WELL AS ANY EXTERNALLY HELD
BROKERAGE ACCOUNTS.
(solid bullet) COMPLETION OF THIS FORM WILL NOT INITIATE A TRANSFER OF
ACCOUNT. PLEASE SEE BELOW FOR INSTRUCTIONS.
I hereby acknowledge that Fidelity requires that I maintain my
personal brokerage accounts and any brokerage accounts beneficially
owned by me at Fidelity Brokerage Services, Inc. ("FBSI").
I maintain the following personal and beneficially owned brokerage
account(s) at this time (including FBSI accounts):
(Attach additional sheets if necessary.)
ACCOUNT # NAME(S) ON ACCOUNT NAME OF BROKERAGE FIRM
_________ __________________ ______________________
_________ __________________ ______________________
_________ __________________ ______________________
_________ __________________ ______________________
_________ __________________ ______________________
ATTACH A COPY OF THE MONTHLY STATEMENT FOR ANY EXTERNAL BROKERAGE
ACCOUNT. IF YOUR ACCOUNTS ARE MAINTAINED BY FBSI, YOU DO NOT NEED TO
ATTACH MONTHLY STATEMENTS.
______ PLACE AN "X" HERE IF YOU DO NOT MAINTAIN ANY BROKERAGE
ACCOUNTS.
I understand the requirement to transfer accounts to FBSI or to
request a waiver<F2> in order to continue to maintain an account with
a firm other than FBSI. I certify that I will comply with this
policy.
____________________________________ _______________________
Signature Date
To request an EMPLOYEE TRANSFER KIT to transfer brokerage accounts to
FBSI, call the Employee Trading Gate at 1-800-343-2428.
2 For information about requesting a waiver, contact the Ethics Office
at 8-563-5566, or via email, "Code of Ethics" mailbox.
1 Beneficial ownership may exist when you have a direct or indirect
ability to (1) benefit economically or (2) exercise investment
control. See the Appendix to the Code of Ethics for more specific
details.
Exhibit F
PERSONAL HOLDINGS DISCLOSURE
REQUIRED FROM ALL ACCESS PERSONS, INVESTMENT PROFESSIONALS AND SENIOR
EXECUTIVES
Social Security Number: _______________ Employee Name: ____________
Badge Number: ______________________ Manager's Name: ___________
Internal Phone: ______________________ Mailzone: _________________
I certify to the best of my knowledge that the information on this
disclosure includes all information required to be reported pursuant
to Section V of the Code of Ethics. Furthermore, I certify that I
have provided copies of the most recent statements for all personal
and beneficially owned brokerage accounts.
Employee Signature: _____________________ Date: ___________________
FORMS WILL NOT BE ACCEPTED WITHOUT ALL REQUIRED INFORMATION.
Submission of this form is required of all Access Persons under Rule
17j-1 of the Investment Company Act of 1940. Failure to return this
required disclosure within 7 days after your hire date or the date on
which you became an "Access Person" will be considered a violation of
this Code of Ethics and could result in sanctions as outlined in
Section IX of the Code of Ethics.
Section A. Private Placement Disclosure (Check one.)
1. I have no private placement investment at this time.
2. I am listing below all private placements I am currently involved
in:
Date of Investment $ Amount Company Name Is Company Publicly Traded?
__________________ ________ ____________ ___________________________
__________________ ________ ____________ ___________________________
__________________ ________ ____________ ___________________________
__________________ ________ ____________ ___________________________
Section B. Reportable Securities (Check one.)
1. I do not have any personal or beneficially owned holdings in
reportable securities. (You may skip Section C. Make sure this form
is signed and dated above, then return it to the Ethics Office, N8A.)
2. I have personal or beneficially owned reportable securities to
disclose. (You must complete Section C.)
Section C. Disclosure of Reportable Securities
1. I have attached the most recent statement for each account in
which I hold reportable securities.
These include, but are not limited to, securities accounts with:
(solid bullet) Fidelity (solid bullet) Other
Brokerage Services, Inc Broker-Dealers
(solid bullet) Dividend (solid bullet) Bank Accounts
Re-Investment Programs
(solid bullet) Employee Stock
Purchase Plans
If you have had any reportable securities transactions since the
statement date, you must also include a copy of each trade
confirmation. Statements need to be current (within 30 days of the
date this report is completed). If you do not have a current
statement, you will need to list the individual holdings in the table
below.
2. For the accounts in which I hold reportable securities and have
not attached a statement or for securities that are not held in an
account (i.e., stock certificates) I am listing my current holdings
below.
PERSONAL HOLDINGS DISCLOSURE
TO BE COMPLETED BY ALL ACCESS PERSONS, INVESTMENT PROFESSIONALS AND
SENIOR EXECUTIVES
SECURITY NAME TICKER # OF SHARES $ VALUE
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
_____________ ______ ___________ _______
Attach additional sheets if necessary.
Exhibit G
APPROVED BROKER FOR THE REGION
Employees of any U.S.-based FIDELITY BROKERAGE SERVICES,
Fidelity Company INC. (FBSI)
Employees of any Canada-based TD WATERHOUSE (DISCOUNT)
Fidelity Company TD EVERGREEN (FULL SERVICE)
FIL Employees UK and Europe - NATWEST
STOCKBROKERS, LTD., REDMAYNE
BENTLEY STOCKBROKERS, BANQUE
DE LUXEMBOURG, FIDELITY
BROKERAGE SERVICES, INC.
Japan - NOMURA SECURITIES,
FIDELITY BROKERAGE SERVICES,
INC.
Southeast Asia/Pacific - WI
CARR, FIDELITY BROKERAGE
SERVICES, INC.
Bermuda - FIRST BERMUDA
LIMITED, FIDELITY BROKERAGE
SERVICES, INC.
FISC Ireland Employees FEXCO
Exhibit H
PRE-CLEARANCE GUIDELINES
ACCESS PERSONS, INVESTMENT PROFESSIONALS AND SENIOR EXECUTIVES ONLY
1. Receive the appropriate approval**<F1>
A. All employees of any U.S. or Canada-based Fidelity Company
regardless of location and FIL employees located in the U.S. need to
pre-clear using Online Pre-Clearance:
(right arrow) HTTP://W3IIS.FMRCO.COM/PRECLEAR
(right arrow) HOURS: 10:15AM - 4PM, EST
(right arrow) ALTERNATIVELY, CALL THE PRE-CLEARANCE DESK:
(solid diamond) EQUITY/FIXED INCOME: 617-563-6109
(solid diamond) HIGH YIELD : 617-563-7882
B. FIL employees based in FIL regional offices should contact the
Pre-Clearance Desk in the nearest FIL office:
(right arrow) HOURS: 10:00AM - 4PM, LOCAL TIME
(solid diamond) UK AND EUROPE: 44-1737-837041, 8-723-7041 INTERNAL
(solid diamond) TOKYO: (813) 5470-4871
(solid diamond) HONG KONG: (852) 2848-1752
2. Keep a record of your pre-clearance confirmation number.
3. If the transaction is approved, contact the approved broker to
place your order.
4. Keep in mind that pre-clearance is good for the day of execution
only.
* Pre-clearance is not required for non-reportable securities,
currency warrants, rights subscriptions, gifting of securities,
automatic dividend reinvestments and options on the following market
indexes: S&P 100, S&P Mid Cap 400, S&P 500, Morgan Stanley Consumer,
FTSE 100, and Nikkei 225.
Exhibit I
REQUEST FOR APPROVAL OF TRADING AUTHORIZATION
CORPORATE COMPLIANCE
This requirement refers to a Fidelity employee's family member
granting trading power to the employee. Authorization is not
permitted prior to specific approval by Corporate Compliance. You
will be notified by Compliance if your request is approved. Please
note that Compliance will not consider the request until all forms are
received and are in proper order. Call Corporate Compliance if you
require assistance completing the form or have any questions.
EMPLOYEE INSTRUCTIONS
1. Complete this form and give it to your manager for review and
signature.
2. If your manager approves the request, she/he will forward the
request to Corporate Compliance for further review.
3. A copy of the request form will be returned to you and your
manager, whether approved or denied.
4. If the request is denied, an explanation will be provided.
MANAGER INSTRUCTIONS
1. Review the form for completeness. If any information is missing,
return to the employee to obtain the necessary information.
2. Determined if the activity is limited to immediate family members
or relatives, e.g., spouse, children or other relative who is legally
incompetentor mentally incapacitated.
3. Ensure that the authorization is limited to trading in the cash
account in which margin and options transactions will not be effected.
4. If you sign the request, you understand that a supervisor will:
(solid bullet) Approve and document the approval for each
discretionary order on the day it is entered.
(solid bullet) Ensure the order meets the customer's investment
objective as noted on the account, and
(solid bullet) Ensure that the employee does not effect transactions
which are excessive in size or frequency in view of the financial
resources and character of the customer.
5. If you feel that proper supervision will not be performed, do not
approve the request. Return it to the employee explaining why the
request is being denied.
6. If the form is complete and you determine that the request is
valid, sign and return it to Corporate Compliance for approval.
REQUEST FOR APPROVAL OF TRADING AUTHORIZATION
Please Print
EMPLOYEE NAME: ______________ INTERNAL PHONE #: _____________
SOCIAL SECURITY #: ______________ EXTERNAL PHONE #: _____________
FIDELITY COMPANY: ______________ MAIL ZONE: _____________
ACCOUNT NUMBER FOR WHICH AUTHORIZATION IS REQUESTED:
______________________________________________________________________
NAME OF INDIVIDUAL(S) ON THE ACCOUNT:_________________________________
RELATIONSHIP:
______________________________________________________________________
REASON OR BASIS FOR REQUEST, E.G., LEGALLY INCOMPETENT OR MENTAL
HANDICAP, ETC. PLEASE ATTACH SUPPORTING DOCUMENTATION OR PROOF.
PROOF MAY BE REQUESTED. ATTACH ANY ADDITIONAL INFORMATION.
_________________________________________________________________
IF THIS REQUEST IS APPROVED, I UNDERSTAND I MUST DO THE FOLLOWING:
(solid bullet) PLACE ALL TRADES THROUGH THE EMPLOYEE TRADING GATE.
(solid bullet) INFORM THE TRADING GATE THAT THE ORDER IS BEING ENTERED
PURSUANT TO LIMITED TRADING AUTHORIZATION
(solid bullet) EFFECT TRANSACTIONS IN THE CASH ACCOUNT ONLY AND NOT
PLACE OPTION ORDERS OR TRADE ON MARGIN.
(solid bullet) ENTER TRANSACTIONS WHICH ARE SUITABLE AND NOT EXCESSIVE
IN SIZE, FREQUENCY OR NATURE RELATIVE TO THE CUSTOMER'S OBJECTIVES AND
MEANS.
EMPLOYEE SIGNATURE:___________________________ DATE ________________
MANAGER APPROVAL
BY APPROVING THIS REQUEST, I UNDERSTAND THAT A SUPERVISOR WILL:
(solid bullet) APPROVE AND DOCUMENT THE APPROVAL FOR EACH
DISCRETIONARY ORDER ON THE DAY IT IS ENTERED.
(solid bullet) ENSURE THE ORDER MEETS THE CUSTOMER'S INVESTMENT
OBJECTIVE.
(solid bullet) ENSURE THAT THE EMPLOYEE DOES NOT ENTER INTO
TRANSACTIONS THAT ARE EXCESSIVE IN SIZE OR FREQUENCY IN VIEW OF THE
FINANCIAL RESOURCES AND CHARACTER OF THE CUSTOMER.
MANAGER NAME:
____________ ____________ _________ _____________
PLEASE PRINT SIGNATURE MAIL ZONE DATE
MANAGER PHONE:
_________________ _________________
INTERNAL EXTERNAL
________________________________ ______________
COMPLIANCE APPROVAL DATE
Exhibit J
REQUEST FOR APPROVAL OF PRIVATE SECURITIES TRANSACTION
CORPORATE COMPLIANCE
This requirement refers to transactions outside the regular course, or
scope, of employment with Fidelity Investments, including but not
limited to new offerings of securities not registered with the SEC,
limited partnerships, private placements and transactions in privately
held securities, with or without compensation. It does not apply to
transactions involving immediate family members, nor does it apply to
personal transactions in investment company and variable annuity
securities, FMR shares and subordinated debentures, or to transactions
in brokerage accounts that you have previously disclosed to Corporate
Compliance.
EMPLOYEE INSTRUCTIONS
1. Complete this form and give it to your manager for review and
signature.
2. If your manager approves the request, she/he will forward the
request to Corporate Compliance for further review.
3. A copy of the requested form will be returned to you and your
manager, whether approved or denied.
4. If the request is denied, an explanation will be provided.
MANAGER INSTRUCTIONS
1. Review the form for completeness. If any information is missing,
return to the employee to obtain the necessary information.
2. As the employee's manager you are in the best position to know how
this proposed transaction could affect the employee's obligation to
Fidelity and its customers. If you believe this transaction could
adversely affect that relationship, do not sign the form. Return it
to the employee.
3. If the form is complete, sign and date the request and send it to
Corporate Compliance for approval.
REQUEST FOR APPROVAL OF PRIVATE SECURITIES TRANSACTION
Please Print
EMPLOYEE NAME: _________________ INTERNAL PHONE #:_______
SOCIAL SECURITY #: ________________ EXTERNAL PHONE #: ______
FIDELITY COMPANY: ________________ MAIL ZONE: ______________
Please describe in detail (please list buyer/seller) the nature of the
proposed private securities transaction and your involvement in the
events: (attach any supporting documents describing the transaction)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
WILL YOU BE COMPENSATED? YES______ NO______
IF YES, PROVIDE DETAILS (INCLUDE SPECIFIC AMOUNT):
______________________________________________________________________
ANY POSSIBLE CONFLICT OF INTEREST WITH FIDELITY AND ITS RELATED
BUSINESSES? YES______ NO______
IF YES, PLEASE DESCRIBE:
______________________________________________________________________
______________________________________________________________________
COULD THIS PRIVATE SECURITIES TRANSACTION INVOLVE ANY CUSTOMERS OR
VENDORS OF FIDELITY INVESTMENTS?
YES______ NO_____
IF YES, PLEASE DESCRIBE:
______________________________________________________________________
______________________________________________________________________
EMPLOYEE SIGNATURE:_____________________ ________________
DATE
MANAGER APPROVAL:
_________________ __________ __________ ____________
PLEASE PRINT NAME SIGNATURE MAILZONE DATE:
FOR COMPLIANCE USE ONLY
______________________ _________________________
COMPLIANCE APPROVAL DATE
