FIDELITY
(registered trademark)
NEW JERSEY
TAX-FREE
MONEY MARKET
PORTFOLIO
SEMIANNUAL REPORT
MAY 31, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 14 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 18 Footnotes to the financial
statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
No one wants to pay more taxes than they have to. But a recent survey of
500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed
that few people took steps to reduce their taxes under the new tax laws
that went into effect last year. In fact, many people were not completely
aware of the changes until they filed their 1993 tax returns.
Whether or not you're someone whose tax bill increased as a result of these
changes, it may make sense to consider ways to keep more of what you earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your 1994 tax
bill. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center. We look
forward to talking with you.
Best regards,
Edward C. Johnson 3d, Chairman
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not voluntarily reimbursed the fund for expenses during the
periods shown, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Fidelity New Jersey Tax-Free
Money Market Portfolio 0.95% 1.90% 20.16% 28.83%
Consumer Price Index 1.17% 2.29% 19.14% 26.61%
Average New Jersey Tax-Free
Money Market Fund 0.96% 1.92% 20.94% n/a
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, six months, one year, five years, or since the fund started on
March 17, 1988. For example, if you invested $1,000 in a fund that had a 5%
return over the past year, you would end up with $1,050. Comparing the
fund's performance to the consumer price index (CPI) helps show how your
investment did compared to inflation. To measure how the fund stacked up
against its peers, you can compare its return to the average New Jersey
tax-free money market fund's
total return. This average currently reflects the performance of 11 New
Jersey tax-free money market funds tracked by IBC/Donoghue. (The periods
covered by the CPI and IBC/Donoghue numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity New Jersey Tax-Free
Money Market Portfolio 1.90% 3.74% 4.16%
Consumer Price Index 2.29% 3.57% 3.90%
Average New Jersey Tax-Free
Money Market Fund 1.92% 3.87% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
5/31/93 8/31/93 11/30/93 2/28/94 5/31/94
Fidelity New Jersey Tax-Fr 2.14% 1.92% 1.89% 1.85% 2.27%
ee
Money Market Portfolio
Average New Jersey 2.18% 1.90% 1.86% 1.92% 2.27%
Tax-Free Money Market
Fund
Fidelity New Jersey Tax-Fr 3.58% 3.21% 3.16% 3.10% 3.80%
ee
Money Market Portfolio -
Tax-equivalent
Average All Taxable 2.62% 2.64% 2.69% 2.79% 3.51%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 2.14
Row: 1, Col: 2, Value: 2.18
Row: 2, Col: 1, Value: 1.92
Row: 2, Col: 2, Value: 1.9
Row: 3, Col: 1, Value: 1.89
Row: 3, Col: 2, Value: 1.86
Row: 4, Col: 1, Value: 1.85
Row: 4, Col: 2, Value: 1.92
Row: 5, Col: 1, Value: 2.27
Row: 5, Col: 2, Value: 2.27
Fidelity New Jersey
Tax-Free Money
Market Portfolio
Average New Jersey
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average tax-free money market fund. Or you can
look at the fund's tax-equivalent yield, which is based on a combined
effective 1994 federal and New Jersey state income tax rate of 40.26%. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr,
Portfolio Manager of Fidelity
New Jersey Tax-Free
Money Market Portfolio
Q. SCOTT, THERE'S BEEN SOME TURMOIL
IN THE MONEY MARKETS THESE PAST FEW MONTHS. CAN YOU BRING US UP TO DATE?
A. Well, interest rates were actually pretty stable through January. Then
on February 4, 1994, the Federal Reserve raised the federal funds rate
one-quarter percent, reversing three years of actions designed to stimulate
economic growth. The Fed's move took most market participants by surprise.
At the time the economy was improving and inflation seemed under control.
The Fed, however, was intent on squelching any inflationary trends before
they became a problem. After the initial increase, two more quarter-point
increases followed over the next two months, and finally a half-point
increase in May raised the rate to 4.25%.
Q. HOW DID THAT AFFECT TAX-FREE MONEY MARKET INSTRUMENTS?
A. Initially, very little. Demand typically outpaces supply at the
beginning of the year, and that kept tax-free interest rates from rising as
fast as taxable rates. In April, the gap began to narrow, and by May, the
relationship between taxable and tax-free interest rates more closely
reflected the maximum tax rate.
Q. STRATEGICALLY, HOW DID YOU COPE WITH CHANGING CONDITIONS?
A. Although I, too, was surprised by the timing of the Fed's move, I had
been preparing for rising interest rates for several months. The fund's
average maturity, an aggressive 75 days at the start of the period last
November, had fallen into the mid 60s by February as the fund added
short-term variable-rate instruments. Those performed well as rates rose. I
was helped, too, by all the new money that flowed into the fund during the
first quarter of the calendar year. Most of this money was invested in
shorter-term securities, which further reduced the fund's average maturity.
Q. HOW DID THE FUND PERFORM?
A. On May 31, 1994, the fund's seven-day yield was 2.27%, up from 1.89% six
months ago. The latest yield is the equivalent of a 3.80% yield on a
taxable investment for New Jersey investors in the 36% federal tax bracket.
The fund's total return for the six months ended May 31 was .95% The
average total return during the same period for all New Jersey tax-free
money market funds was .96%, according to IBC/Donoghue.
Q. WHAT'S AHEAD FOR THE FUND?
A. I expect that rates will remain stable for at least the next few months.
That's because I don't believe the Fed has been trying to put the brakes on
economic growth so much as remove the stimulus of artificially low rates.
And with the half-point increase in May, that goal, for now, probably has
been achieved. However, if the economy keeps growing, the Fed could decide
to act again as early as this fall. With that in mind, I'll probably aim
for an average maturity within the 45- to 55-day range.
FUND FACTS
GOAL: tax-free income &
stability by investing in
high-quality, short-term New
Jersey municipal securities
START DATE: March 17, 1988
SIZE: as of May 31, 1994,
more than $406 million
MANAGER: Scott Orr, since
January 1992; manager,
Fidelity New Jersey Tax-Free
Money Market Fund and
Fidelity Michigan Municipal
Money Market Fund, since
January 1992;
Fidelity and Spartan
Connecticut Municipal Money
Market Funds, since October
1993;
joined Fidelity in 1989
(checkmark)
MONEY MARKETS AND
DERIVATIVES:
The word "derivatives" covers
a wide range of financial
agreements, of varying
degrees of complexity, that
have market values based on
security or market indices. All
"derivative" securities in
Fidelity's money market funds
are designed to have the price
characteristics of typical
money market securities.
During the recent Federal
Reserve Board interest rate
increases, all Fidelity money
market holdings performed as
designed and the funds
maintained a stable share
price of $1.00.
The more complex of these
instruments, such as floating
rate notes with unusual and
complex floating rate
formulas, frequently have too
much price volatility to be
appropriate investments for
money market funds. Many of
them do not offer the degree
of price stability Fidelity
believes is required in order
for its funds to maintain a
stable $1.00 share price.
Therefore, despite their
frequent higher yields at the
time they are sold, Fidelity
has not purchased these
volatile securities. While this
may sometimes have caused
Fidelity money market funds
to have lower gross yields
than certain other funds,
Fidelity believes its investors
value prudence as well as
performance.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
5/31/94 11/30/93 5/31/93
0 - 30 62 57 60
31 - 90 14 16 14
91 - 180 15 9 11
181 - 397 9 18 15
WEIGHTED AVERAGE MATURITY
5/31/94 11/30/93 5/31/93
Fidelity New Jersey
Tax-Free Money Market
Portfolio 52 days 75 days 69 days
Average New Jersey
Tax-Free Money
Market Fund* 48 days 65 days 57 days
ASSET ALLOCATION
AS OF MAY 31, 1994 AS OF NOVEMBER 30, 1993
Row: 1, Col: 1, Value: 52.0
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 6.0
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 9.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 3.0
Variable rate
demand notes
(VRDNs) 52%
Commercial
paper 11%
Tender bonds 6%
Municipal
notes 30%
Other 1%
Variable rate
demand notes
(VRDNs) 50%
Commercial
paper 9%
Tender bonds 8%
Municipal
notes 30%
Other 3%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
INVESTMENTS MAY 31, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 86.9%
Atlantic County Impt. Auth. Rev. (Pooled Gov't. Loan Prog.)
2.90%, LOC Marine Midland Bank, Hong Kong &
Shanghai Banking Corp., VRDN $ 8,000,000 $ 8,000,000
Atlantic Highland BAN 2.96% 8/19/94 1,000,000 1,000,081
Berkeley Township BAN 2.84% 11/30/94 2,000,000 2,000,368
Bernards Township Swr. Auth. Swr. Rev. Rfdg.,
Series 1985, 2.875% 12/15/94, OT 4,500,000 4,500,000
Bernardsville BAN 3.58% 8/15/94 2,200,000 2,200,784
Burlington County BAN 2.77% 11/4/94 1,900,000 1,900,119
Camden County BAN 3.25% 2/16/95 5,000,000 5,002,253
Camden County Impt. Auth. Solid Waste Disp. Rev. Rfdg.
Bonds (County Gtd. Landfill Proj.) 2.75% 7/1/94 1,215,000 1,214,750
Cape May County BAN 3.25% 8/11/94 14,500,000 14,512,325
Cape May County Muni. Solid Waste Resource Recovery
Rev. (Daneco Cape May Inc.) Series 1991, 2.80%
11/30/94, MT 4,000,000 4,000,000
Chatham Township BAN 3.15% 8/1/94 3,000,000 3,000,725
Clark Township BAN 2.98% 6/23/94 1,500,000 1,500,204
Cumberland County Gen. Impt. Bonds 4.50% 9/15/94
(FSA Insured) 1,200,000 1,205,970
Essex County Impt. Auth. Rev. (Pooled Gov't Loan Prog.)
VRDN:
Series 1985, 2.95%, LOC Tokai Bank 10,300,000 10,300,000
Series 1986, 2.95%
LOC Banco Santander Puerto Rico 1,800,000 1,800,000
Essex County TAN 3.75% 12/19/94 18,300,000 18,363,939
Gloucester County Poll. Cont. Fin. Auth. Poll. Cont. Rev.
(Mobil Oil Refining) Series 1993 A, 2.55%, VRDN 3,500,000 3,500,000
Hudson County BAN 3.26% 10/12/94 3,700,000 3,703,664
Hudson County Gen. Oblig. Bonds 4.20% 8/1/94 1,025,000 1,027,176
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled
Gov't. Loan Prog.) Series 1986, 3.10%,
LOC Marine Midland Bank, VRDN 29,895,000 29,895,000
Lawrence Township BAN 3.25% 8/24/94 750,000 750,754
Manchester Township BAN 3.06% 7/15/94 1,570,000 1,570,107
Mercer County BAN 3% 10/13/94 10,800,000 10,819,795
Mercer County Impt. Auth. Rev. (Pooled Gov't. Loan Prog.)
Series 1985, 2.80%, LOC Credit Suisse Bank, VRDN 200,000 200,000
Monmouth County BAN 3.25% 9/1/94 3,000,000 3,003,715
Monmouth County Impt. Auth. Rev. (Pooled Gov't.
Loan Prog.) Series 1986, 2.80%, LOC Union
Bank of Switzerland, VRDN 12,300,000 12,300,000
Moorestown Township BAN:
2.82% 9/7/94 1,100,000 1,100,200
3.125% 10/13/94 2,000,000 2,002,673
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.,
(Morris Hall/St. Lawerence) 3.50% 6/1/94
LOC New Jersey Nat.'l Bank, OT 3,000,000 3,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
Rfdg. (Church & Dwight Co.) Series 1991, 2.65%,
LOC Bank of Nova Scotia $ 3,300,000 $ 3,300,000
Rfdg. (Curtiss-Wright Corp.) Series 1992,2.50%,
LOC Bank of Nova Scotia 3,000,000 3,000,000
(AVP Realty Holdings, Inc.) Series 1989 A, 3%,
LOC Barclays Bank 1,350,000 1,350,000
(Arden Group) Series 1989 BB, 3%,
LOC Barclays Bank 1,600,000 1,600,000
(Assoc. for Retarded Citizens) Series 1989 CC, 2.90%
LOC Barclay's Bank 1,200,000 1,200,000
(Composite Issue1987 A-D) Series 1987 D,
3%, LOC Nat'l. Westminster Bank (b) 885,000 885,000
(Composite Issue1988 K-S) Series 1988 P,
2.90%, LOC Barclays Bank 1,350,000 1,350,000
(Composite Issue A-C & E-L) Series 1989 E, 2.90%,
LOC Barclays Bank PLC 600,000 600,000
(E.P. Henry Corp.) Series 1989-K, 3%,
LOC Barclays Bank 600,000 600,000
(Guttenplan's Bakery) Series 1989-G, 3%,
LOC Barclays Bank (b) 700,000 700,000
New Jersey Econ. Dev. Auth. Ind. Dev. Rev. Rfdg.
(Marriott Corp.) Series 1984, 2.90%,
LOC Nat'l. Westminster Bank 1,800,000 1,800,000
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Exxon Proj.1989) 3.05% 10/3/94 CP-mode 3,200,000 3,200,000
(Hoffman-La Roche Inc. Proj.) Series 1985, 3%,
LOC Bankers Trust, VRDN 3,000,000 3,000,000
New Jersey Econ. Dev. Auth. Port Facs. Rev.
(Trailer Marine Proj.) Series 1983, 3.10%,
LOC Chemical Bank, Manufacturer's Hanover
Trust, VRDN 900,000 900,000
New Jersey Econ. Dev. Auth. Rev.:
Rfdg. (Polymeric Res. Corp. Proj.) Series 1998-B,
3.10%, LOC Bank of Toyko, VRDN 1,450,000 1,450,000
(1420 Chestnut Ave.) Series 1989 FF, 3%,
LOC Barclays Bank 1,300,000 1,300,000
(Base 10 Sys.) 2.875%, LOC Bank of New York 3,500,000 3,500,000
(Bel Ray Co., Inc.) Series 1989 I,
3%, LOC Barclays Bank, VRDN 250,000 250,000
(Center For Aging Applewood Proj.) 2.65%,
LOC Banque Paribas 2,600,000 2,600,000
(Chambers Cogeneration1991 Proj.)
CP mode (b):
2.60% 6/8/94, LOC Swiss Bank Corp. 4,300,000 4,300,000
2.25% 6/14/94, LOC Swiss Bank Corp. 5,000,000 5,000,000
2.60% 6/22/94, LOC Swiss Bank Corp. 5,000,000 5,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Rev. - continued
(Chambers Cogeneration Ltd. Partnership 1991 Proj.)
CP mode (b) - continued
2.35% 6/27/94, LOC Swiss Bank Corp. $ 4,700,000 $ 4,700,000
3% 7/13/94, LOC Swiss Bank Corp. 4,900,000 4,900,000
(Danic Urban Renewal Co. Proj.) Series 1985, 2.90%,
LOC Marine Midland Bank, VRDN 1,000,000 1,000,000
(Dial Realty) Series 1988-L, 3%,
LOC Barclays Bank 2,600,000 2,600,000
(Hirsh Enterprises) Series 1989 II, 2.95%,
LOC Barclay Bank 500,000 500,000
(J.W. Holding Group) Series 1989 GG, 3%,
LOC Barclays Bank 650,000 650,000
(Keystone Proj.) Series 1992, LOC Union Bank of
Switzerland, CP-mode (b) :
2.25% 6/14/94 2,500,000 2,500,000
2.25% 6/14/94 2,500,000 2,500,000
2.25% 6/21/94 4,000,000 4,000,000
2.45% 6/22/94 600,000 600,000
2.40% 6/24/94 2,000,000 2,000,000
(M&S Realty) Series 1988-N, 3%,
LOC Barclays Bank 950,000 950,000
(Pictorial Offset Corp.) Series 1989 H, 3%,
LOC Barclays Bank 2,400,000 2,400,000
(Richard L Tauber Issue) Series 93 B-1,
2.70%, LOC Nat'l. Westminster Bank, VRDN 2,700,000 2,700,000
(Russ Berrie & Co. Inc.) 3.20%
LOC Bank of New York, DN 5,200,000 5,200,000
New Jersey Econ. Dev. Auth. Tender Option Bonds
(Liquidity Enhancement Morgan Gauranty) VRDN (c):
Series MGT-49C, 2.70% 2,000,000 2,000,000
Series MGT-49D, 2.70% 4,300,000 4,300,000
Series MGT-49E, 2.70% 3,500,000 3,500,000
New Jersey Gen. Oblig. Participating VRDN,
Series PA-6, 2.90%, BPA Merrill Lynch & Co. (c) 16,020,000
16,020,000
New Jersey Gen. Obig. TRAN 3% 6/15/94 1,000,000 1,000,101
New Jersey Gen. Oblig. Tender Option Bonds,
Rfdg. Series BT-113, 2.80%, (Liquidity Enhancement
Bankers Trust) MT (c) 2,000,000 2,000,000
New Jersey Gen. Oblig. Tender Option Ctfs., VRDN (c)
Series EE-1, 3.40% (Liquidity Enhancement Bank of
Nova Scotia) 14,700,000 14,700,000
Series EE-2, 3.40%,
(Liquidity Enhancement Bank of Nova Scotia) 6,000,000 6,000,000
New Jersey Health Care Facs. Fin. Auth. Rev.
(Cap. Asset Fin. Prog.) Series 1985 B, 2.80%,
LOC Chemical Bank, VRDN 5,000,000 5,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c):
2.97% (MBIA Insured)(Liquidity Enhancement Citibank) $ 6,000,000 $
6,000,000
3.12% (MBIA Insured)(Liquidity Enhancement Citibank) 6,800,000
6,800,000
New Jersey Hsg. & Mtg. Fin. Agcy. Rev.,
Series 1993 1-A, 2.90% 9/29/94, MT 10,635,000 10,635,000
New Jersey Participating VRDN, Series BS-1991A-B,
2.90% (Liquidity Enhancement Sakura Bank) 1,185,000 1,185,000
New Jersey Sports and Exposition Auth. Rev.,
Series 1992 C, 2.60%, (MBIA Insured) VRDN 3,200,000 3,200,000
New Jersey Tpk. Auth. Tpk. Rev., Series 1991 D,
2.60%, (BPA Society Generale) (FGIC Insured), VRDN 1,300,000 1,300,000
Newark Tax Appeal Bonds 3.45% 10/1/94
(AMBAC Insured) 1,500,000 1,503,178
Ocean City BAN 3.69% 1/4/95 1,200,000 1,200,828
Passaic Valley Wtr. Commission Participating VRDN,
Series A 2.95% (Liquidity Enhancement
Merrill Lynch & Co.)(c) 2,480,000 2,480,000
Salem County Ind. Poll. Cont. Fin. Auth. Poll. Cont. Rev.
(Philidelphia Elec. Co.) Series 93 A, 2.35% 6/27/94,
LOC Toronto-Dominion Bank, CP mode 2,000,000 2,000,000
Shrewsbury BAN 2.57% 7/29/94 950,000 950,099
Somerset County Ind. Poll. Cont. Auth.
(Somerset New Jersey Minnesota Mining &
Manufacturing 3M) 3.35%, VRDN 600,000 600,000
Trenton Gen. Oblig. Rev. Bonds 4.875% 1/15/95
(MBIA Insured) 439,000 444,757
Union City BAN 2.96% 10/19/94 1,250,000 1,250,383
Washington Township Bergen County BAN
2.96% 9/22/94 1,404,000 1,404,250
West Orange BAN 3% 9/8/94 3,197,000 3,200,814
Woodbridge Township BAN 3.07% 11/7/94 14,000,000 14,002,820
350,136,832
NEW YORK & NEW JERSEY - 7.2%
New York & New Jersey Port Auth. Participating VRDN,
Series PA-26, 2.85% (Liquidity Enhancement Merrill
Lynch & Co.)(c) 5,820,000 5,820,000
New York & New Jersey Port Auth. Series A, CP (b):
3% 7/13/94 (Liquidity Enhancement Daiwa Bank) 1,665,000 1,665,000
3% 7/14/94 (Liquidity Enhancement
Daiwa Bank, Ltd.) 1,715,000 1,715,000
New York & New Jersey Port Auth. Rev., Series 1991,
3.21%, VRDN (b) 8,800,000 8,800,000
New York & New Jersey Port Auth. Rev., Variable Rate
Master Note Agreement, Series 1992, 2.86%, VRDN 6,800,000 6,800,000
New York & New Jersey Port Auth. Special Oblig. Rev.
Series 1, 3% (SPBA Bank of Tokyo) 4,200,000 4,200,000
29,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - 5.9%
Puerto Rico TRAN, Series A, 3% 7/29/94 $ 23,700,000 $ 23,711,091
TOTAL INVESTMENTS - 100% $ 402,847,923
Total Cost for Income Tax Purposes $ 402,845,998
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Security provides evidence of ownership in an underlying pool of
municipal bonds.
INCOME TAX INFORMATION
At November 30,1993, the fund had a capital loss carryforward of
approximately $16,000 of which $2,600, $200 and $13,200 will expire on
November 30, 1997, 1999 and 2001, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1994 (UNAUDITED)
1.ASSETS 2. 3.
4.Investment in securities, at value (Note 1) - See 5. $ 402,847,923
accompanying schedule
6.Cash 7. 602,420
8.Interest receivable 9. 2,967,038
10. 11.TOTAL ASSETS 12. 406,417,381
13.LIABILITIES 14. 15.
16.Payable to custodian bank $ 119,922 17.
18.Dividends payable 12,216 19.
20.Accrued management fee 138,738 21.
22.Other payables and accrued expenses 98,188 23.
24. 25.TOTAL LIABILITIES 26. 369,064
27.28.NET ASSETS 29. $ 406,048,317
30.Net Assets consist of (Note 1): 31. 32.
33.Paid in capital 34. $ 406,056,161
35.Accumulated net realized gain (loss) on investments 36. (9,769)
37.Unrealized gain from accretion of market discount 38. 1,925
(Note 1)
39.40.NET ASSETS, for 406,056,161 shares outstanding 41. $ 406,048,317
42.43.NET ASSET VALUE, offering price and redemption 44. $1.00
price per share ($406,048,317 (divided by) 406,056,161 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED)
45.46.INTEREST INCOME 47. $ 4,915,749
48.EXPENSES 49. 50.
51.Management fee (Note 2) $ 800,880 52.
53.Transfer agent, accounting and custodian fees and 405,158 54.
expenses (Note 2)
55.Non-interested trustees' compensation 2,477 56.
57.Registration fees 980 58.
59.Audit 10,657 60.
61.Legal 3,000 62.
63.Miscellaneous 4,179 64.
65. 66.TOTAL EXPENSES 67. 1,227,331
68.69.NET INTEREST INCOME 70. 3,688,418
71.REALIZED AND UNREALIZED GAIN (LOSS) ON 73. 6,320
INVESTMENTS
(NOTE 1)
72.Net realized gain (loss) on investment securities
74.Increase (decrease) in net unrealized gain from 75. 1,517
accretion of market discount
76.77.NET GAIN (LOSS) 78. 7,837
79.80.NET INCREASE IN NET ASSETS RESULTING FROM 81. $ 3,696,255
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
MAY 31, 1994 NOVEMBER 30,
(UNAUDITED) 1993
82.INCREASE (DECREASE) IN NET ASSETS
83.Operations $ 3,688,418 $ 6,862,299
Net interest income
84. Net realized gain (loss) on investments 6,320 (13,233)
85. Increase (decrease) in net unrealized gain from 1,517 389
accretion of market discount
86. 87.NET INCREASE (DECREASE) IN NET ASSETS 3,696,255 6,849,455
RESULTING FROM OPERATIONS
88.Dividends to shareholders from net interest income (3,688,418) (6,862,299)
89.Share transactions at net asset value of $1.00 per 460,548,467 725,152,808
share
Proceeds from sales of shares
90. Reinvestment of dividends from net interest income 3,563,275 6,595,536
91. Cost of shares redeemed (417,658,586) (731,240,792)
92. Net increase (decrease) in net assets resulting 46,453,156 507,552
from share transactions
93. 94.TOTAL INCREASE (DECREASE) IN NET ASSETS 46,460,993 494,708
95.NET ASSETS 96. 97.
98. Beginning of period 359,587,324 359,092,616
99. End of period $ 406,048,317 $ 359,587,324
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
100. SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1994
101. (UNAUDITED) 1993 1992 1991 1990 1989
102.SELECTED PER-SHARE DAT
A
103.Net asset va $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
lue,
beginning of
period
104.Income from .009 .019 .028 .042 .056 .063
Investment
Operations
Net interest
income
105.Less Distrib (.009) (.019) (.028) (.042) (.056) (.063)
utions
From net intere
st
income
106.Net asset va $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
lue,
end of period
107.TOTAL RETUR .95% 1.94 2.81 4.29 5.72 6.45
N (dagger) % % % % %
108.RATIOS AND SUPPLEMENTAL DATA
109.Net assets, $ 406,048 $ 359,587 $ 359,093 $ 368,333 $ 443,585 $ 347,485
end of
period (000
omitted)
110.Ratio of exp .63% .63 .64 .65 .27 .15
enses * % % % % %
to average net
assets
111.Ratio of exp .63% .63 .64 .65 .61 .68
enses * % % % % %
to average net
assets before
expense
reductions
112.Ratio of net i 1.90% 1.92 2.78 4.23 5.57 6.24
nterest * % % % % %
income to
average net
assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1994 (Unaudited)
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity New Jersey Tax-Free Money Market Portfolio (the fund) is a fund of
Fidelity Court Street Trust II (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between
the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.15% to .37% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .25%.
For the period, the management fee was equivalent to an annual rate of .41%
of average net assets.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .1325% to .37%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SUB-ADVISER FEE - CONTINUED
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $40,900 for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the fund.
The Bank has entered into a sub-contract with Fidelity Service Co. (FSC),
an affiliate of FMR, under which FSC performs the activities associated
with the fund's transfer and shareholder servicing agent and accounting
functions. The fund pays transfer agent fees based on the type, size,
number of accounts and number of transactions made by shareholders. FSC
pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. The accounting fee is based on the level of
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$347,908 and $39,894, respectively.
Shareholders participating in the Fidelity Ultra Service Account(Registered
trademark) Program (the Program) pay a $5.00 monthly fee to Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, for performing
services associated with the Program. For the period, fees paid to FBSI by
shareholders participating in the Program amounted to $32,179.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
FIDELITY'S TAX-FREE
MONEY MARKET FUNDS
California Tax-Free Money Market
Connecticut Municipal Money Market
Massachusetts Tax-Free Money Market
Michigan Municipal Money Market
New Jersey Tax-Free Money Market
New York Tax-Free Money Market
Ohio Municipal Money Market
Spartan(registered trademark) California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Tax-Exempt Money Market
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
