SPARTAN(registered trademark)
(registered trademark)
CONNECTICUT
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 19 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE 23 How the fund has done over time.
FUND TALK 25 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 27 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 28 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 33 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 37 Notes to the financial statements.
REPORT OF INDEPENDENT 40 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 41
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To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income to measure performance. If Fidelity had not reimbursed certain fund
expenses during the periods shown, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
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PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 5.64% 42.98% 104.57%
Income Fund
Lehman Brothers Connecticut 4 Plus 5.82% n/a n/a
Year Enhanced Municipal Bond Index
Connecticut Municipal 4.97% 42.17% n/a
Debt Funds Average
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CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on October 29, 1987. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index,
which includes Connecticut investment-grade municipal bonds with maturities
of four years or greater. To measure how the fund's performance stacked up
against its peers, you can compare it to the Connecticut municipal debt
funds average, which reflects the performance of 24 Connecticut municipal
bond funds with similar objectives tracked by Lipper Analytical Services
over the past 12 months. Both benchmarks include reinvested dividends and
capital gains, if any.
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AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 5.64% 7.41% 8.18%
Income Fund
Lehman Brothers Connecticut 4 Plus 5.82% n/a n/a
Year Enhanced Municipal Bond Index
Connecticut Municipal 4.97% 7.29% n/a
Debt Funds Average
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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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
Spartan CT Muni Bond LB Municipal Bond Index
00407 LB015
1987/10/31 10000.00 10000.00
1987/11/30 10121.14 10261.10
1987/12/31 10253.38 10409.99
1988/01/31 10621.33 10780.79
1988/02/29 10727.51 10894.75
1988/03/31 10415.77 10768.37
1988/04/30 10463.24 10850.21
1988/05/31 10515.58 10818.85
1988/06/30 10713.46 10977.13
1988/07/31 10766.94 11048.70
1988/08/31 10821.12 11058.42
1988/09/30 11033.66 11258.58
1988/10/31 11228.48 11456.73
1988/11/30 11123.75 11351.79
1988/12/31 11289.82 11467.92
1989/01/31 11442.62 11705.07
1989/02/28 11333.30 11571.52
1989/03/31 11345.51 11543.86
1989/04/30 11654.63 11817.91
1989/05/31 11899.33 12063.37
1989/06/30 12098.25 12227.19
1989/07/31 12229.60 12393.60
1989/08/31 12100.68 12272.27
1989/09/30 12064.54 12235.70
1989/10/31 12207.62 12385.34
1989/11/30 12387.76 12602.08
1989/12/31 12467.78 12705.17
1990/01/31 12357.27 12645.07
1990/02/28 12469.60 12757.62
1990/03/31 12491.34 12761.44
1990/04/30 12296.35 12669.05
1990/05/31 12602.20 12945.62
1990/06/30 12730.24 13059.41
1990/07/31 12919.64 13251.38
1990/08/31 12687.34 13058.97
1990/09/30 12769.37 13066.41
1990/10/31 12962.06 13303.44
1990/11/30 13241.66 13570.97
1990/12/31 13302.08 13630.00
1991/01/31 13449.71 13812.92
1991/02/28 13534.39 13933.09
1991/03/31 13556.04 13938.11
1991/04/30 13728.33 14123.48
1991/05/31 13850.06 14249.04
1991/06/30 13743.00 14234.94
1991/07/31 13906.13 14408.32
1991/08/31 14057.22 14598.07
1991/09/30 14183.28 14788.14
1991/10/31 14323.10 14921.24
1991/11/30 14357.59 14962.87
1991/12/31 14709.45 15283.97
1992/01/31 14731.80 15318.82
1992/02/29 14739.08 15323.72
1992/03/31 14671.72 15329.39
1992/04/30 14749.26 15465.82
1992/05/31 14951.25 15647.85
1992/06/30 15245.81 15910.42
1992/07/31 15720.88 16387.42
1992/08/31 15498.38 16227.64
1992/09/30 15604.48 16333.77
1992/10/31 15338.54 16173.21
1992/11/30 15752.71 16462.87
1992/12/31 15918.26 16630.96
1993/01/31 16155.63 16824.37
1993/02/28 16812.50 17432.91
1993/03/31 16583.73 17248.65
1993/04/30 16736.58 17422.68
1993/05/31 16834.46 17520.60
1993/06/30 17132.68 17813.02
1993/07/31 17158.04 17836.35
1993/08/31 17547.22 18207.71
1993/09/30 17760.01 18415.09
1993/10/31 17769.52 18450.63
1993/11/30 17613.41 18288.08
1993/12/31 17984.08 18674.15
1994/01/31 18192.21 18887.40
1994/02/28 17691.72 18398.22
1994/03/31 16886.79 17649.04
1994/04/30 17031.87 17798.71
1994/05/31 17133.36 17953.02
1994/06/30 17026.95 17843.33
1994/07/31 17368.71 18170.40
1994/08/31 17407.79 18233.27
1994/09/30 17121.76 17965.60
1994/10/31 16740.39 17646.53
1994/11/30 16273.39 17327.49
1994/12/31 16722.36 17708.86
1995/01/31 17257.49 18214.98
1995/02/28 17785.12 18744.67
1995/03/31 17975.02 18960.05
1995/04/30 17995.56 18982.42
1995/05/31 18555.39 19588.15
1995/06/30 18388.43 19417.74
1995/07/31 18493.83 19601.82
1995/08/31 18751.20 19850.37
1995/09/30 18902.35 19976.02
1995/10/31 19142.51 20266.47
1995/11/30 19431.77 20602.69
1995/12/31 19585.33 20800.68
1996/01/31 19756.12 20957.73
1996/02/29 19659.57 20816.26
1996/03/31 19393.70 20550.23
1996/04/30 19353.03 20492.07
1996/05/31 19315.79 20483.88
1996/06/30 19559.55 20706.95
1996/07/31 19716.11 20895.38
1996/08/31 19694.05 20890.37
1996/09/30 19940.60 21182.83
1996/10/31 20171.62 21422.41
1996/11/30 20528.73 21814.44
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Connecticut Municipal Income Fund on October 31, 1987, shortly after the
fund started. As the chart shows, by November 30, 1996, the value of your
investment would have grown to $20,529 a 105.29% increase on your initial
investment. This assumes you still own the fund on November 30, 1996, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond Index - which
reflects the performance of the investment-grade municipal bond market -
did over the same period. With dividends reinvested, the same $10,000 would
have grown to $21,814 a 118.14% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1996 1995 1994 1993 1992
Dividend return 5.29% 6.62% 5.27% 6.29% 6.59%
Capital appreciation returns 0.35% 12.78% -12.89% 5.52% 3.12%
Total return 5.64% 19.40% -7.62% 11.81% 9.71%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD
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PERIODS ENDED NOVEMBER 30, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.63(cents) 28.28(cents) 56.88(cents)
Annualized dividend rate 5.06% 5.13% 5.15%
30-day annualized yield 4.61% - -
30-day annualized tax-equivalent yield 7.54% - -
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DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.15 over
the past month, $10.99 over the past six months and $11.04 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 38.88% 1996 combined federal and state tax bracket but does not
reflect payment of the alternative minimum tax, if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Municipal bonds benefited from
steady demand and relatively low
supply during much of the year that
ended November 30, 1996. For
the past 12 months, the Lehman
Brothers Municipal Bond Index -
a broad measure of the municipal
bond market - had a total return of
5.88%. In comparison, the Lehman
Brothers Aggregate Bond Index -
a proxy for investment-grade
taxable bonds - had a total return
of 6.07%. Munis outperformed their
counterparts in the taxable bond
market for the first nine months of
the period. Factors that helped
munis included a lack of supply of
new issues, strong demand for
municipal bonds from both
insurance companies and individual
investors, and the diminishing
likelihood of significant tax reform in
the near future. Like most domestic
bonds, munis were hurt by
stronger-than-expected signs of
strength in the economy earlier in
1996. Nevertheless, the market
conditions that supported the muni
market prevailed to the point that
munis entered the last two months
of the period trading at expensive
levels relative to their taxable
counterparts. At that point and
through October, the performance
of the municipal market stalled
somewhat, as investor demand
declined and institutional investors
sold off some of their municipal
bond holdings to take profits. That
sell-off subsided somewhat in
November, when munis
outperformed comparable
Treasury securities.
An interview with George Fischer, Portfolio Manager of Spartan Connecticut
Municipal Income Fund.
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the year ending November 30, 1996, the fund had a total return of
5.64%. For the same period, the Connecticut municipal debt funds average,
as tracked by Lipper Analytical Services, returned 4.97%, while the Lehman
Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index returned
5.82%.
Q. THERE HAVE BEEN SOME IMPORTANT CHANGES IN THE FUND'S STRUCTURE SINCE YOU
TOOK OVER IN MAY. CAN YOU TELL US ABOUT THEM?
A. Yes. One of the more obvious changes is the fund has fewer
longer-maturity bonds (those with maturities of 20 years or more) and more
intermediate-maturity bonds (those with maturities of between 10 and 15
years). My emphasis on intermediate-maturity bonds had to do with the shape
of the yield curve, which measures the difference in yields among bonds
with various maturities, and which was quite flat in the longer end of the
curve. That meant that the difference in yield between bonds with
intermediate maturities and those with longer-term maturities was quite
small, or narrow. In my view, the incremental yield longer-term bonds
offered didn't adequately compensate investors for the added risk they
carried, and I felt that the intermediate bonds looked better on a
risk/reward basis.
Q. THE FUND'S STAKE IN HOUSING BONDS ALSO DROPPED OVER THE PAST SIX MONTHS.
WHAT WAS YOUR RATIONALE FOR THAT MOVE?
A. These bonds are backed by home mortgages, which have a lot of prepayment
provisions that work against bond holders. These provisions allow the
issuing authority to pay off the bonds it issues earlier than when they are
due (before maturity), if interest rates fall. I didn't feel that housing
bonds adequately compensated investors with enough yield to offset that
risk of early payment. Therefore, I reduced the holdings in housing bonds
to less than 4% of investments, compared to 9% six months ago.
Q. THERE'S ALSO BEEN A NOTICEABLE IMPROVEMENT IN THE FUND'S OVERALL CREDIT
QUALITY . . .
A. Yes, that's true because I pruned out some lower-quality bonds - namely
those rated Baa - and replaced them with higher-quality securities. Some
examples of securities I bought included general obligation bonds (GOs)
issued by the cities of Bridgeport, Stamford, West Hartford and Newtown. A
GO bond is repaid with general tax revenues, in contrast to the revenue
from a specific facility built with borrowed funds, such as a toll road.
General revenues are sensitive to both the economy and the cities' fiscal
health, both of which were in relatively good shape during the period for
those issuers I mentioned.
Q. HAVE YOU FOUND ANY INTERESTING OPPORTUNITIES IN HOSPITAL BONDS RECENTLY?
A. Not really, since unlike other areas of the country, there hasn't really
been a lot of activity in the way of mergers and acquisitions in
Connecticut. In addition, the hospital bonds issued during the past six
months haven't been that appealing from a yield, price and credit
perspective. So at the end of the period, the fund's holdings in hospitals
look much the same as they did six months ago. That said, I'll continue to
pay attention to national trends in health care as they relate to the
fund's holdings in hospitals.
Q. WHAT'S YOUR OUTLOOK?
A. I think that municipals continue to represent a good long-term value for
investors seeking tax-free income. A declining stock market could mean that
investors start looking to the bond markets to provide a new home for their
investments. Even though bond yields are low on a historical basis, they
may look attractive compared to falling stock prices. More investor money
coming into the municipal market would likely be a positive for municipal
prices. But given the municipal market's recent strong gains, I don't see a
huge amount of across-the-board price appreciation from here without
interest rate declines. As a result, income will be a more important part
of a bond's total return. Still, there are always opportunities to make
money. So I'll concentrate on doing careful research - with the help of
Fidelity's credit and quantitative research group - to uncover those
opportunities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high
current tax-free income
for Connecticut residents
TRADING SYMBOL: FICNX
FUND NUMBER: 407
START DATE: October 29,
1987
SIZE: as November 30,
1996, more than $334 million
MANAGER: George Fischer,
since May 1996; manager,
Spartan Bond Strategist,
since 1993; Fidelity
Insured Municipal
Income, since 1995; Fidelity
Municipal Bond Fund, since
1995; joined Fidelity in 1989
(checkmark)
GEORGE FISCHER ON CONNECTICUT'S
ECONOMY AND FISCAL SITUATION:
"From an economic
standpoint, Connecticut is
doing all right. On the positive
side, casino gambling - a
relatively recent contributor to
the Connecticut economy -
has been strong. On the
negative side, the insurance
and defense industries - two
of the more established and
larger of the state's industries
- - have remained troubled. The
state is slogging along, not
performing as well as the
national economy, which has
been pretty strong this year.
From a fiscal standpoint,
things have also been OK.
While the state faces some
potential problems down the
road - such as covering its
unfunded pensions - I
believe that its credit rating is
fairly safe for the time being."
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 32.7 32.3
Health Care 13.2 11.9
Escrowed/Pre-Refunded 10.5 2.9
Special Tax 8.8 9.7
Education 8.7 11.6
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1996
6 MONTHS AGO
Years 13.1 14.8
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1996
6 MONTHS AGO
Years 7.2 7.4
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
CAN ALSO INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THE ABOVE EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Aaa 51.7%
Aa, A 33.8%
Baa 12.9%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 1.6%
Aaa 41.9%
Aa, A 40.3%
Baa 13.4%
Ba, B 0.0%
Non-rated 0.5%
Short-term
investments 3.9%
Row: 1, Col: 1, Value: 51.7
Row: 1, Col: 2, Value: 32.8
Row: 1, Col: 3, Value: 12.9
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 2.6
Row: 1, Col: 1, Value: 41.9
Row: 1, Col: 2, Value: 40.3
Row: 1, Col: 3, Value: 13.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 5.0
Row: 1, Col: 6, Value: 3.9
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 98.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - 95.5%
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 588,750
7% 6/15/09 (FGIC Insured) Aaa 500,000 589,375
Bridgeport Gen. Oblig.:
Series A:
5.40% 9/1/08 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 583,000
5.50% 9/1/09 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 587,125
5.60% 9/1/10 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 590,563
5.70% 9/1/11 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 594,688
5.70% 9/1/15 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 2,000,000 2,155,000
Unltd. Tax:
Rfdg. 6.50% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,590,563
7.20% 3/1/98 (Escrowed to Maturity) (d) Baa 930,000 967,200
7.40% 3/1/00
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,080,000 1,175,850
7.625% 1/15/09
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,500,000 1,640,625
Series B, 7.75% 11/15/10
(Pre-Refunded to 11/15/00 @ 102) (d) Baa 3,235,000 3,695,988
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,838,594
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 852,575
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,360,000
Canterbury Unltd. Tax:
7.20% 5/1/05 A 350,000 400,313
7.20% 5/1/06 A 195,000 224,738
Cheshire Unltd. Tax:
6.90% 2/15/06 Aa 100,000 116,500
6.90% 2/15/07 Aa 100,000 117,000
6.90% 2/15/08 Aa 100,000 117,625
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aaa 2,500,000 2,790,625
5.875% 11/1/03 Aaa 1,000,000 1,086,250
5.875% 5/1/04 Aaa 1,000,000 1,085,000
6.80% 7/1/05 Aaa 1,000,000 1,108,750
5.875% 4/1/08 Aaa 1,000,000 1,082,500
6% 10/1/12 Aaa 6,000,000 6,525,000
Ltd. Tax 5.125% 5/1/18 Aaa 2,000,000 1,907,500
Connecticut Dev. Auth. Health Care Rfdg.
(Duncaster, Inc. Proj.) 6.75% 9/1/15 A2 3,000,000 3,187,500
Connecticut Dev. Auth. Poll. Cont. Rev.
(New England Pwr. Co. Proj.)
7.25% 10/15/15 A1 3,000,000 3,228,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Dev. Auth. Rev.:
(Hartford Civic Ctr.) Series A:
6% 11/15/07 A1 $ 1,525,000 $ 1,660,344
6% 11/15/08 A1 1,525,000 1,656,531
6% 11/15/09 A1 1,525,000 1,648,906
4.75% 11/15/13 A1 1,525,000 1,414,438
Connecticut Economic Recovery Notes
Unltd. Tax 4.25% 12/15/96 Aa 1,000,000 1,000,310
Connecticut Gen. Oblig.:
Series A:
6.10% 3/15/02 Aa 3,000,000 3,240,000
7% 3/15/03 Aa 3,000,000 3,408,750
0% 5/15/07 Aa 2,250,000 1,338,750
6.90% 3/15/09 Aa 3,000,000 3,292,500
Series B, 6% 10/1/05 Aa 5,000,000 5,475,000
(Cap. Appreciation College Savings Plan):
Series A, 0% 12/1/07 Aa 4,000,000 2,315,000
Unltd. Tax Series B, 0% 11/1/09 Aa 7,390,000 3,815,088
(College Savings Plan) Series A, 0% 11/1/06 Aa 2,800,000 1,725,500
(Greenwich Hospital) Series A,
5.80% 7/1/26 (MBIA Insured) Aaa 5,400,000 5,487,750
6% 3/15/01 Aa 2,405,000 2,564,331
Connecticut Health & Ed. Facs. Auth. Rev.:
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,903,125
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,530,075
(Connecticut College Issue) Series B,
6.625% 7/1/11 (MBIA Insured) Aaa 1,200,000 1,305,000
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa1 850,000 839,375
(Kent School):
Series B:
3.90% 7/1/97 (MBIA Insured) Aaa 250,000 250,218
4.125% 7/1/99 (MBIA Insured) Aaa 325,000 324,594
4.40% 7/1/01 (MBIA Insured)
(Pre-Refunded to 7/1/00 @ 102) (d) Aaa 250,000 250,313
4.50% 7/1/02 (MBIA Insured) Aaa 305,000 305,381
4.60% 7/1/03 (MBIA Insured) Aaa 150,000 150,375
4.70% 7/1/04 (MBIA Insured) Aaa 500,000 501,250
4.875% 7/1/05 (MBIA Insured) Aaa 400,000 403,500
5.10% 7/1/07 (MBIA Insured) Aaa 265,000 268,313
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 309,956
5.375% 7/1/09 (MBIA Insured) Aaa 845,000 857,675
5.40% 7/1/10 (MBIA Insured) Aaa 685,000 691,850
(Lutheran Gen. Health Care Sys.)
7.375% 7/1/19 Aaa 3,195,000 3,782,081
(New Britain Mem. Hosp.) Series A,
7.75% 7/1/22 BBB- 6,500,000 7,028,125
(Quinnipiac College):
Series C, 7.75% 7/1/20 BBB- 1,970,000 2,231,025
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. Rev.: - continued
(Quinnipiac College): - continued
Series D:
Rfdg. 6% 7/1/13 BBB- $ 3,500,000 $ 3,434,375
Rfdg. 6% 7/1/23 BBB- 1,975,000 1,915,750
(St. Mary's Hosp.) Issue B:
7.60% 7/1/03 Baa 900,000 945,000
7.80% 7/1/09 (AMBAC Insured) Baa 4,525,000 4,717,313
(St. Raphael Hosp.) Series H:
6.50% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,585,938
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,433,000
6.50% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,169,200
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22,
LOC Fleet Nat'l. Bank Baa 1,000,000 1,130,000
(Pre-Refunded to 7/1/02 @ 102) (d)
6% 7/1/06 Baa3 250,000 256,250
6.50% 7/1/16 Baa3 4,000,000 4,140,000
(Sharon Healthcare, Inc.):
Series A:
8.75% 7/1/06
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 450,000 542,250
9% 7/1/13
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 1,300,000 1,579,500
9.20% 7/1/21
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 1,500,000 1,835,625
(Veterans Memorial Medical Ctr.) 6.25% 7/1/05
(MBIA Insured) Aaa 2,265,000 2,502,825
(Yale-New Haven Hosp.)
Series F, 7.10% 7/1/25
(MBIA Insured) Aaa 5,000,000 5,562,500
6% 7/1/03 (MBIA Insured) Aaa 1,000,000 1,077,500
(Yale Univ.) 5.929% 6/10/30 Aaa 10,000,000 10,150,000
Connecticut Higher Ed. Supplemental Loan
Auth. Rev. (b):
(Family Ed. Loan Prog.) Series A,
7.20% 11/15/10 A 870,000 926,550
Series A:
7.375% 11/15/05 A1 515,000 540,106
7.50% 11/15/10 A1 1,775,000 1,863,750
Connecticut Hsg. Fin. Auth.:
(Mtg. Fin. Prog.):
Series A, Subseries A-2, 6.45% 5/15/22 Aa 5,500,000 5,658,125
Series B, 6.20% 5/15/12 Aa 3,000,000 3,086,250
Series E, 6.20% 5/15/14 Aa 1,000,000 1,030,000
Series E, Subseries E-1, 6.30% 5/15/17 Aa 1,950,000 1,998,750
Connecticut Muni. Elec. Energy Coop.
Pwr. Supply Sys. Rev:
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,437,225
6% 1/1/05 (MBIA Insured) Aaa 3,380,000 3,650,400
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Muni. Elec. Energy Coop.
Pwr. Supply Sys. Rev.: - continued
6% 1/1/06 (MBIA Insured) Aaa $ 2,000,000 $ 2,160,000
Connecticut Resource Recovery Auth. Rev.:
Rfdg. Series A, 5.5% 11/15/11 (MBIA Insured) Aaa 2,500,000 2,525,000
(American Refuse Fuel Co.) 8.10% 11/15/15 Aaa 4,500,000 4,882,500
5.25% 11/15/08 (MBIA Insured) Aaa 8,000,000 8,070,000
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 1,003,750
Connecticut Spl. Assignment Unemployment
Compensation Advisor Fund Rev. Rfdg
(Connecticut Unemployment) Ltd. Tax Series A,
5.50% 11/15/00 (AMBAC Insured) Aaa 2,000,000 2,090,000
Connecticut Spl. Tax. Oblig. Rev.:
(Trans. Infrastructure):
Series 1991 A, 6.75% 6/1/11
(Pre-Refunded to 6/1/03 @ 100) (d) A1 2,395,000 2,694,375
Series A:
Rfdg. 4.75% 9/1/01 A1 1,000,000 1,015,000
6.50% 6/1/03 A1 2,800,000 3,115,000
7.125% 6/1/10 A1 3,550,000 4,277,750
Series B:
6.50% 10/1/07 A1 2,250,000 2,556,563
0% 6/1/08 A1 3,500,000 1,960,000
6.15% 9/1/09 A1 1,500,000 1,665,000
6.50% 10/1/10 A1 3,250,000 3,721,250
6.125% 9/1/12 A1 5,000,000 5,475,000
6.50% 10/1/12 A1 3,500,000 3,972,500
Eastern Resource Recovery Auth. Solid Waste Rev.
(Wheelabrator Lisbon Proj.) (b):
Series A :
5.50% 1/1/15 A- 8,000,000 7,610,000
5.50% 1/1/20 A- 3,000,000 2,805,000
5% 1/1/04 A- 1,000,000 992,500
Hartford County Metropolitan Dist.
6.20% 11/15/09 Aa1 250,000 278,125
Hartford County Metropolitan Dist. School Board
Unltd. Tax 9.50% 6/1/03 Aa1 100,000 126,875
Meriden Gen. Oblig. Unltd. Tax:
6.25% 8/1/05 (FGIC Insured) Aaa 2,000,000 2,215,000
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,217,500
7% 10/1/07 (MBIA Insured) Aaa 500,000 589,375
Milford Gen. Oblig.:
5.20% 1/15/11 Aa 550,000 543,813
Unltd. Tax:
6.70% 2/1/05 Aa 400,000 456,000
6.70% 2/1/08 Aa 315,000 363,431
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Monteville Gen. Oblig.:
6.30% 3/1/10 Aa $ 405,000 $ 450,563
7% 3/15/13 Aa 220,000 261,800
7% 3/15/14 Aa 220,000 263,450
7% 3/15/15 Aa 210,000 251,475
Naugatuck Gen. Oblig. Unltd. Tax:
6.90% 6/15/07 (FGIC Insured) Aaa 485,000 563,813
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 252,356
7.40% 9/1/07 (MBIA Insured) Aaa 370,000 446,313
7.40% 9/1/08 (MBIA Insured) Aaa 370,000 447,700
New Britain Gen. Oblig.:
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,180,000
5% 2/1/12 (MBIA Insured) Aaa 885,000 867,300
5% 2/1/13 (MBIA Insured) Aaa 885,000 866,194
Unltd. Tax:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 436,000
7% 4/1/07 (MBIA Insured) Aaa 580,000 674,975
7% 4/1/08 (MBIA Insured) Aaa 580,000 679,325
New Haven Gen. Oblig.:
Rfdg. Series A, 5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,755,031
Series A, 7.40% 3/1/12 Baa 1,000,000 1,078,750
8.25% 8/15/01 Baa 3,280,000 3,743,300
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,137,500
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,322,500
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,450,000
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,699,850
North Thompsonville Fire Dist.:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 207,450
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 219,213
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 234,000
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 252,356
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 270,825
Norwalk Hsg. Auth. Mtg. Rev. (Monterey Village)
Series 1985 B, Section 8, 9% 11/1/99 BBB 145,000 142,100
Plainville Gen. Oblig.:
6.60% 8/15/08 A1 250,000 284,063
Unltd. Tax:
6.60% 8/15/09 A1 250,000 286,250
6.60% 8/15/10 A1 250,000 285,938
6.60% 8/15/11 A1 250,000 287,813
South Central Connecticut Wtr. Sys. Auth. Rev.:
11th Series:
5.625% 8/1/05 (FGIC Insured) Aaa 5,000,000 5,281,250
5.75% 8/1/12 (FGIC Insured) Aaa 3,000,000 3,090,000
Stamford Gen. Oblig. Unltd. Tax:
6.25% 2/15/03 Aaa 1,725,000 1,895,344
6.25% 2/15/04 Aaa 1,725,000 1,908,281
6.25% 2/15/05 Aaa 1,725,000 1,916,906
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Stamford Gen. Oblig. Unltd. Tax: - continued
6.60% 1/15/07 Aaa $ 295,000 $ 339,988
6.60% 1/15/08 Aaa 1,480,000 1,709,400
6.60% 1/15/09 Aaa 1,000,000 1,155,000
Stratford Gen. Oblig. Unltd. Tax 7% 6/15/08
(FGIC Insured) Aaa 500,000 588,125
Univ. of Connecticut 5.5% 2/1/06
(FGIC Insured) Aaa 3,070,000 3,204,313
Vernon Unltd. Tax:
7.10% 10/15/07 A1 250,000 299,688
7.10% 10/15/08 A1 250,000 300,625
Voluntown Gen. Oblig. Unltd. Tax:
6.75% 10/1/03 A 210,000 231,525
6.75% 10/1/04 A 210,000 233,363
6.80% 10/1/06 A 210,000 239,400
6.80% 10/1/07 A 210,000 239,663
6.80% 10/1/08 A 210,000 244,650
6.80% 10/1/09 A 185,000 215,294
West Hartford Gen. Oblig. Unltd. Tax:
6.50% 7/15/05 Aaa 2,000,000 2,265,000
6.50% 7/15/06 Aaa 2,000,000 2,275,000
Tax 5% 7/15/11 Aaa 2,000,000 1,957,500
West Haven Impt. Unltd. Tax 6.70% 2/15/04
(MBIA Insured) Aaa 710,000 804,075
Winchester Gen. Oblig. Unltd. Tax:
7.10% 11/15/06 A1 125,000 145,469
7.10% 11/15/08 A1 110,000 130,213
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09 (FGIC Insured) Aaa 445,000 522,875
7% 6/15/10 (FGIC Insured) Aaa 440,000 516,450
Woodstock Spl. Oblig. Rev. (Woodstock Academy)
7% 3/1/08 (AMBAC Insured) Aaa 725,000 795,675
315,116,140
PUERTO RICO - 2.9 %
Puerto Rico Commonwealth Gen. Oblig. Unltd. Tax
6.40% 7/1/11 Baa1 1,500,000 1,612,500
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Rev. Rfdg. Series V, 6.625% 7/1/12 Baa1 1,750,000 1,874,688
Puerto Rico Elec. Pwr. Auth. Rev.:
Rfdg. Series W, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,367,500
7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,357,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Indl. Med. & Envir. Poll. Cont.
Facs. Fing. Auth. Rev. (Motorola,Inc.)
Series A, 6.75% 1/1/14 (e) Aa3 $ 1,285,000 $ 1,387,800
9,599,988
TOTAL MUNICIPAL BONDS
(Cost $306,629,392) 324,716,128
MUNICIPAL NOTES (A) - 1.6%
CONNECTICUT - 1.6%
Connecticut Dev. Auth. (Light & Pwr. Co. Proj. 1993)
Series A, 3.50%,
LOC Deutsche Bank, VRDN VMIG 1 2,000,000 2,000,000
Connecticut Dev. Auth Poll. Cont. Rev.
(Connecticut Lt. & Pwr. Co. Proj.) Ltd. Tax
Series A, 3.60%,
LOC Canadian Imperial Bank,
VRDN (b) VMIG 1 2,000,000 2,000,000
Connecticut Spl. Tax Oblig. Rev. (2nd Lien)
(Trans. Infrastructure) Series 1, 3.55%,
LOC Industrial Bank of Japan, VRDN VMIG 1 1,400,000 1,400,000
TOTAL MUNICIPAL NOTES
(Cost $5,400,000) 5,400,000
TOTAL INVESTMENTS - 100%
(Cost $312,029,392) $ 330,116,128
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
VRDN - Variable Rate Demand Note
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
LEGEND - CONTINUED
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. Security exempt from registration under
Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At the period end, the value of these securities amounted to
$1,387,800 or 0.4% of net assets.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 80.8% AAA, AA, A 83.6%
Baa 8.4% BBB 9.5%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 0.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 32.7%
Health Care 13.2
Escrowed/Pre-Refunded 10.5
Special Tax 8.8
Education 8.7
Water & Sewer 6.6
Electric Revenue 6.4
Industrial Development 5.4
Others (individually less than 5%) 7.7
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $312,029,392. Net unrealized appre- ciation
aggregated $18,086,736, of which $18,600,984 related to appreciated
investment securities and $514,248 related to depreciated investment
securities.
At November 30, 1996, the fund was required to defer $1,854,185 of losses
on futures contracts.
The fund hereby designates approximately $261,400 as a capital gain
dividend for the purpose of the dividend paid deduction.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 8.79% of the fund's income dividends was
subject to the federal alternative minimum tax.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (cost $312,029,392) - $ 330,116,128
See accompanying schedule
Interest receivable 5,222,354
TOTAL ASSETS 335,338,482
LIABILITIES
Payable to custodian bank $ 27,518
Payable for fund shares redeemed 212,441
Distributions payable 328,892
Accrued management fee 149,626
TOTAL LIABILITIES 718,477
NET ASSETS $ 334,620,005
Net Assets consist of:
Paid in capital $ 317,905,888
Accumulated undistributed net realized gain (loss) (1,372,619)
on investments
Net unrealized appreciation (depreciation) on 18,086,736
investments
NET ASSETS, for 29,764,091 shares outstanding $ 334,620,005
NET ASSET VALUE, offering price and redemption price per $11.24
share ($334,620,005 (divided by) 29,764,091 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1996
INTEREST INCOME $ 19,218,766
EXPENSES
Management fee $ 1,861,384
Non-interested trustees' compensation 1,422
Total expenses before reductions 1,862,806
Expense reductions (99,479) 1,763,327
NET INTEREST INCOME 17,455,439
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,862,465
Futures contracts 397,803 3,260,268
Change in net unrealized appreciation (depreciation) on:
Investment securities (2,874,842)
Futures contracts 561,056 (2,313,786)
NET GAIN (LOSS) 946,482
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 18,401,921
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 17,455,439 $ 19,553,566
Net interest income
Net realized gain (loss) 3,260,268 (1,590,927)
Change in net unrealized appreciation (depreciation) (2,313,786) 41,663,100
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 18,401,921 59,625,739
FROM OPERATIONS
Distributions to shareholders (17,455,439) (19,553,566)
From net interest income
From net realized gain - (699,611)
In excess of net realized gain - (243,807)
TOTAL DISTRIBUTIONS (17,455,439) (20,496,984)
Share transactions 29,600,748 49,373,918
Net proceeds from sales of shares
Reinvestment of distributions 13,513,939 16,090,044
Cost of shares redeemed (68,305,755) (61,340,934)
Redemption fees 15,649 14,848
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (25,175,419) 4,137,876
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (24,228,937) 43,266,631
NET ASSETS
Beginning of period 358,848,942 315,582,311
End of period $ 334,620,005 $ 358,848,942
OTHER INFORMATION
Shares
Sold 2,674,315 4,630,644
Issued in reinvestment of distributions 1,222,501 1,496,456
Redeemed (6,175,401) (5,779,595)
Net increase (decrease) (2,278,585) 347,505
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1996 1995 1994 C 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.200 $ 9.960 $ 11.840 $ 11.220 $ 10.880
period
Income from Investment .569 .617 .640 .680 .689
Operations
Net interest income
Net realized and unrealized .039 1.270 (1.472) .619 .338
gain (loss)
Total from investment .608 1.887 (.832) 1.299 1.027
operations
Less Distributions
From net interest income (.569) (.617) (.640) (.680) (.689)
From net realized gain - (.020) (.410) - -
In excess of net realized - (.010) - - -
gain
Total distributions (.569) (.647) (1.050) (.680) (.689)
Redemption fees added to .001 - .002 .001 .002
paid in capital
Net asset value, end of $ 11.240 $ 11.200 $ 9.960 $ 11.840 $ 11.220
period
TOTAL RETURN A 5.65% 19.41% (7.61)% 11.81% 9.72%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 334,620 $ 358,849 $ 315,582 $ 450,113 $ 413,748
(000 omitted)
Ratio of expenses to average .55% .55% .55% .55% .55%
net assets
Ratio of expenses to average .52% .55% .55% .55% .55%
net assets after expense B
reductions
Ratio of net interest income to 5.15% 5.73% 5.83% 5.81% 6.21%
average net assets
Portfolio turnover rate 30% 39% 11% 45% 11%
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
C EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
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, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee on an average sized account.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses during the periods
shown, the total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 3.07% 14.86% 18.27%
Money Market Fund
Connecticut Tax-Free 2.85% 13.57% 16.11%
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on March 4, 1991. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the Connecticut tax-free money market funds
average, which reflects the performance of 10 Connecticut tax-free money
market funds with similar objectives tracked by IBC Financial Data, Inc.
over the past 12 months. (The periods covered by IBC Financial Data Inc.
numbers are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 3.07% 2.81% 2.96%
Money Market Fund
Connecticut Tax-Free 2.85% 2.58% 2.67%
Money Market Funds Average
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/27/95 2/26/96 5/27/96 9/2/96 12/2/96
Spartan Connecticut 3.32% 2.94% 3.19% 3.02% 3.06%
Municipal
Money Market Fund
Connecticut Tax-Free 3.09% 2.67% 2.91% 2.70% 2.84%
Money Market Funds
Average
Spartan Connecticut 5.38% 4.77% 5.19% 4.90% 4.97%
Municipal
Money Market Fund -
Tax-equivalent
Portion of fund's income 19.03% 18.12% 13.63% 18.51% 17.51%
subject to state taxes
</TABLE>
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 Connecticut tax-free money market funds average
as tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 38.88% and reflects that a portion of the
fund's income was subject to state taxes. A portion of the fund's income
may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free
investments are usually lower
than yields on taxable
investments. However, a
straight comparison between
the two may be misleading
because it ignores the way
taxes reduce taxable returns.
Tax-equivalent yield - the
yield you'd have to earn on a
similar taxable investment to
match the tax-free yield -
makes the comparison more
meaningful. Keep in mind that
the U.S. Government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money market fund will
maintain a $1 share price.
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS:
Deborah Watson became Portfolio Manager of Spartan Connecticut Municipal
Money Market Fund on August 1, 1996
Q. DEB, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST 12 MONTHS?
A. At the beginning of the period, most market participants expected the
Federal Reserve Board to continue lowering the rate banks charge each other
for overnight loans - known as the federal funds rate - due to a moderate
rate of growth in the economy and mild inflationary pressures. These
conditions helped to persuade the Fed to continue pursuing monetary policy
designed to stimulate economic growth. The Fed lowered the federal funds
rate one-quarter percentage point in December 1995 and again in January
1996, bringing the rate down to 5.25%. In mid-February, Fed Chairman Alan
Greenspan, testifying before Congress, surprised many by suggesting that
the economy was in no need of further stimulus. Greenspan's opinion was
reinforced dramatically in early March with the release of the February
employment report, which came in much higher than expected. Market
sentiment shifted and a sharp sell-off in the bond market ensued. Over the
past few months, however, signs of weakness in employment and a lack of
inflationary pressures in price indices have kept the Fed on the sidelines,
while the market has responded with lower rates.
Q. WHAT SORT OF STRATEGY DID THE FUND PURSUE THROUGH THIS CHANGING
ENVIRONMENT?
A. When the period began, the fund was well-positioned for a declining rate
environment with an average maturity of 62 days. Through the spring,
however, the maturity was allowed to roll down due to the expectation of
higher rates and thin supply. By July, the supply picture changed
dramatically and prices on money market instruments began to reflect
anticipated rate increases by the Fed. I added longer-term securities,
extending the fund's average maturity to 60 days. Since then, supply has
been constrained, but I've been able to keep the maturity in the mid 50-day
range, waiting for more concrete signals on the direction of the economy
and Fed policy.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield at the end of the period was 3.05%, compared
to 3.31% 12 months earlier. The latest yield was the equivalent of a
taxable yield of 4.95% for Connecticut investors in the 38.88% combined
federal and state tax bracket. The fund's total return during the 12-month
period was 3.07%. That beat the total return of 2.85% for the Connecticut
tax-free money market funds average, according to IBC Financial Data, Inc.
Q. WHAT DO YOU SEE HAPPENING OVER THE NEXT SIX MONTHS?
A. I anticipate the Fed will keep the fed funds rate stable at 5.25%
probably through the first quarter of 1997. Until then, the market will be
anxiously awaiting further signals on the economy as new data is released.
However, I believe it is more probable that the next move will be for the
Fed to raise the fed funds rate due to tightness in the labor market and
the possibility for wages to increase, among other factors. That said, I
expect to keep the average maturity fairly stable, in the 50-60 day range.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high
current tax-free income
for Connecticut residents
TRADING SYMBOL: FICNX
FUND NUMBER: 407
START DATE: October 29,
1987
SIZE: as November 30,
1996, more than $334 million
MANAGER: George Fischer,
since May 1996; manager,
Spartan Bond Strategist,
since 1993; Fidelity
Insured Municipal
Income, since 1995; Fidelity
Municipal Bond Fund, since
1995; joined Fidelity in 1989
(checkmark)
GEORGE FISCHER ON CONNECTICUT'S
ECONOMY AND FISCAL SITUATION:
"From an economic
standpoint, Connecticut is
doing all right. On the positive
side, casino gambling - a
relatively recent contributor to
the Connecticut economy -
has been strong. On the
negative side, the insurance
and defense industries - two
of the more established and
larger of the state's industries
- - have remained troubled. The
state is slogging along, not
performing as well as the
national economy, which has
been pretty strong this year.
From a fiscal standpoint,
things have also been OK.
While the state faces some
potential problems down the
road - such as covering its
unfunded pensions - I
believe that its credit rating is
fairly safe for the time being."
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/96 5/31/96 11/30/95
0 - 30 73 59 65
31 - 90 3 28 11
91 - 180 12 8 3
181 - 397 12 5 21
WEIGHTED AVERAGE MATURITY
11/30/96 5/31/96 11/30/95
Spartan Connecticut
Municipal Money Market
Fund 52 days 47 days 62 days
Connecticut Tax-Free
Money Market Funds
Average * 57days 27 days 58 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Row: 1, Col: 1, Value: 60.0
Row: 1, Col: 2, Value: 17.0
Row: 1, Col: 3, Value: 11.0
Row: 1, Col: 4, Value: 6.0
Row: 1, Col: 5, Value: 6.0
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 7.0
Row: 1, Col: 5, Value: 10.0
Variable rate
demand notes
(VRDNs) 60%
Commercial
paper 17%
Tender bonds 11%
Municipal
notes 6%
Other 6%
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 14%
Tender bonds 15%
Municipal
notes 7%
Other 10%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - 71.3 %
Connecticut Dev. Auth. Health. Care Rev. (Corp.
for Independent Living Proj.) Series 1990,
3.35%, LOC Chemical Bank, VRDN $ 8,500,000 $ 8,500,000
Connecticut Dev. Auth. Ind. Dev. Rev.
(W.E. Bassett Co. Proj.) Series 1986, 4.10%,
LOC Bank of Boston, VRDN (b) 1,000,000 1,000,000
Connecticut Dev. Auth. Poll. Cont. Rev. Bond VRDN:
(Light & Pwr. Co. Proj.):
Series 1993 A, 3.50%, LOC Deutsche Bank 900,000 900,000
Series 1996 A:
3.60%, LOC Canadian Bank Imperial
Bank, (b) 6,700,000 6,700,000
3.50%, LOC Canadian Imperial Bank of
Commerce 1,300,000 1,300,000
Series B, 3.60%, LOC Union Bank of
Switzerland (b) 11,000,000 11,000,000
Connecticut Dev. Auth. Solid Waste Disp. Fac.
Rev. VRDN (b):
(Exeter Energy Proj.):
Series 1989 A, 3.55%, LOC Sanwa Bank 500,000 500,000
Series 1989 C, 3.55%, LOC Sanwa Bank 400,000 400,000
(Rand-Whitney Containerboard) 3.30%,
LOC Chase Manhattan Bank 3,300,000 3,300,000
Connecticut Dev. Auth. Wtr. Facs. Rev. (Bridgeport
Hydraulic Co.) Series 1995, 3.25%,
LOC Society Generale, VRDN 4,600,000 4,600,000
Connecticut Econ. Recovery Notes
4.25% 12/15/96 4,335,000 4,335,879
4.75% 6/15/97 700,000 703,838
Connecticut Gen. Oblig.:
Bonds:
Series 1996 A, 4% 5/15/97 2,000,000 2,003,508
4.75% 8/15/97 880,000 885,712
Participating VRDN, Series MGT-27, 3.45%,
(Liquidity Facility Morgan Guaranty Trust Co.) (c) 775,000 775,000
Connecticut Health. & Ed. Facs. Auth. Rev.:
(Charlotte Hungerford Hosp.) Series B,
3.30%, LOC Bank of Boston, VRDN 2,900,000 2,900,000
(Yale University):
Bonds:
Series L, 3.45%, tender 12/5/96 1,800,000 1,800,000
Series M, 3.45%, tender 4/7/97 6,000,000 6,000,000
Series N, 3.35%, tender 12/6/96 2,100,000 2,100,000
Series N, 3.45%, tender 4/7/97 1,000,000 1,000,000
Series O, 3.45%, tender 12/5/96 3,200,000 3,200,000
Participating VRDN, Series BT-203,
3.65% (Liquidity Facility Bankers Trust) (c) 3,000,000 3,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth.:
Bonds:
(Hsg. Mtg. Fin. Prog.):
Series 1989 D:
3.55%, tender 12/6/96 (b) $ 800,000 $ 800,000
3.60%, tender 3/11/97 (b) 1,800,000 1,800,000
Series 1990 C, 3.60%, tender 4/7/97 (b) 1,600,000 1,600,000
Series 1996 A-3, 3.60%,tender 4/10/97 2,000,000 2,000,000
Series 1996 A-4, 3.65%, tender 4/10/97 (b) 3,500,000 3,500,000
Series 1995G, 3.40% (AMBAC Insured)
(BPA Morgan Guaranty Trust) VRDN 3,700,000 3,700,000
Participating VRDN, Series PT-81, 3.65%
(Liquidity Facility Rabobank Nederland,
N.V.) (b)(c) 1,500,000 1,500,000
Connecticut Participating VRDN,
Series 94-1, 3.55% (Liquidity Facility State
Street Bank & Trust Co.) (c) 4,898,126 4,898,126
Connecticut Second Lien Spl. Tax Oblig.
(Transport Infrastructure Purpose) Series 1,
3.55%, LOC Commerzbank, VRDN 13,580,000 13,580,000
Connecticut Spl. Assessment Unemployment
Compensation Rev. Bonds:
Series A:
4.10% 5/15/97 (AMBAC Insured) 1,300,000 1,302,387
4.20% 5/15/97 700,000 701,220
Series 1993 C, 3.90%, tender 7/1/97 (FGIC Insured) 15,600,000
15,602,254
East Haven Gen. Oblig. BAN:
4.00% 9/3/97 1,200,000 1,201,310
4.25% 9/3/97 3,000,000 3,009,167
Guilford Gen. Oblig. BAN 4.25% 10/15/97 725,000 728,357
Hartford Redev. Auth. (Underwood Towers Proj.)
3.35% (FSA Insured) (BPA Barclays Bank) VRDN 1,100,000 1,100,000
Monroe BAN 4.10% 4/15/97 1,600,000 1,603,009
New Britain BAN 3.65% 4/15/97 500,000 500,000
Stamford Hsg. Auth. Multimodal Rev.
(Morgan Street Proj.) Series 1994, 3.60%,
LOC Deutsche Bank, VRDN (b) 2,500,000 2,500,000
Windham BAN 3.50% 12/17/96 4,200,000 4,200,203
132,729,970
DELAWARE - 0.4 %
Delaware Economic Dev. Auth. (Delmarva Pwr. &
Lt. Proj.) Series 1994, 4.00%, VRDN (b) 700,000 700,000
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
LOUISIANA - 3.0 %
Plaquemines Parish Envir. Rev. VRDN (b):
(BP Exploration & Oil, Inc.):
Rfdg. Series 1995, 4.30% $ 500,000 $ 500,000
Series 1994, 4.30% 1,100,000 1,100,000
St. Charles Parish Poll. Cont. Rev. (Shell Oil Co. -
Norco Proj.) Series 1991, 4.25%, VRDN (b) 700,000 700,000
West Baton Rouge Parish Ind. Dist. #3 Rev. VRDN (b):
(Dow Chemical Co. Proj.):
Series 1993, 4.30% 2,800,000 2,800,000
Series 1995, 4.30% 500,000 500,000
5,600,000
MARYLAND - 0.4 %
Montgomery County Md. Hsg., Series 1993 I,
3.70% (Commonwealth Life Insured)
(BPA Sumitomo), VRDN 700,000 700,000
MICHIGAN - 1.3 %
Michigan Strategic Fund (Dow Chemical Co. Proj.)
Series 1986, 3.65%, tender 12/9/96 (a) 2,400,000 2,400,000
NEW JERSEY - 2.1 %
New Jersey Tax & Rev. Anticipation Notes,
Series 1997 A, 3.65%, tender 12/11/96, CP 4,000,000 4,000,000
PENNSYLVANIA - 1.0 %
Pennsylvania Higher Ed. Assistance Agcy.
Student Loan Rev., Series 1994 A, 3.60%,
LOC Student Loan Marketing Association,
VRDN (b) 1,100,000 1,100,000
Venango Ind. Dev. Auth. Resource Recovery
Rev. Bonds (Scrubgrass proj.) Series 1990 B,
3.65%, tender 12/6/96, LOC National
Westminster Bank, PLC (b) 800,000 800,000
1,900,000
PUERTO RICO - 11.0 %
Puerto Rico Commonwealth Highway & Trans.
Auth. Highway Participating VRDN,
Series PA-114, 3.40% (Liquidity Facility
Merrill Lynch & Co., Inc.) (c) 4,235,000 4,235,000
Puerto Rico Commonwealth Pub. Impt. Participating VRDN (c):
Series BT-165, 3.55% (Liquidity Facility Bankers
Trust Co.) 2,142,000 2,142,000
Series PA-97, 3.40% (MBIA Insured)
(Liquidity Facility Merrill Lynch & Co.) 2,145,000 2,145,000
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Pub. Impt. Participating VRDN (c): - continued
Series PT-63, 3.40% (Liquidity Facility
Bayerische Hypotheken) $ 3,655,000 $ 3,655,000
Puerto Rico Elec. Pwr. Auth. Rev. Participating
VRDN, Series BT-105, 3.425% (Liquidity Facility
Bankers Trust Co.) (c) 3,978,000 3,978,000
Puerto Rico Gov't. Dev. Bank Rev., 3.20%,
LOC Credit Suisse & Sumitomo Bank, VRDN 3,000,000 3,000,000
Puerto Rico Ind. Med. Higher Ed. & Environmental
Ctrl. Fac. Fin. Auth Bonds (Inter American Univ.)
Series 1988, 3.50%, tender 2/6/97,
LOC Bank of Tokyo 1,000,000 1,000,000
Puerto Rico Pub. Impt. Rfdg. Bonds Series 1987,
7.25% 7/1/97 400,000 416,528
20,571,528
TEXAS - 7.0 %
Brazos River Auth. Poll. Cont. Rev. Rfdg.
(Texas Util. Elec. Co.) Series 1995 C,
4.30% LOC Swiss Bank Corp., VRDN (b) 1,200,000 1,200,000
Brazos River Harbor Navigation Dist. of
Brazoria County Rev. (Dow Chemical Proj.)
Series 1993, 4.30%, VRDN (b) 2,000,000 2,000,000
Gulf Coast Ind. Dev. Auth. Solid Waste Disp.
Rev. (Citgo Petroleum) 4.30%, LOC Wachovia
Bank, VRDN (b) 1,800,000 1,800,000
Gulf Coast Waste Disp. Auth. Poll. Cont. Rev. VRDN (b):
(Amoco Oil Co. Proj.):
Series 1993, 4.25% 300,000 300,000
Series 1995, 4.25% 800,000 800,000
4.25% 500,000 500,000
Port of Corpus Christi Ind. Dev. Corp. (Citgo
Petroleum Proj.) Series 1996, 4.30%,
LOC Banque Nationale De Paris, VRDN (b) 1,300,000 1,300,000
Trinity River Auth. Poll. Cont. Rev. (Texas Utils.
Elec. Co. Proj.) Series 1996 A, 4.25%
(AMBAC Insured) (BPA Bank of
New York, NY) VRDN (b) 700,000 700,000
University of Texas Sys. Rev. Fin. Sys., Series A,
3.60% 2/19/97, CP 4,436,000 4,436,000
13,036,000
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
WASHINGTON - 0.8 %
Washington Pub. Pwr. Supply Sys. Rfdg.
(Nuclear Proj. #1) Series 1993-1A1, 3.65%,
LOC Bank of America Nat'l. Trust &
Savings, VRDN $ 1,400,000 $ 1,400,000
WEST VIRGINIA - 0.9 %
Marion County Solid Waste Disp. Rev. (Grant
Town Cogeneration Proj.) Series 1990 B, 3.60%,
LOC Nat'l. Westminster Bank, VRDN (b) 1,600,000 1,600,000
MULTIPLE STATES - 0.8 %
California Student Loan Mktg. Corp. Student
Loan Rev. Rfdg. Series 1993 A, 3.60%,
LOC Dresdner Bank AG, VRDN 1,400,000 1,400,000
TOTAL INVESTMENTS - 100% $186,037,498
Total Cost for Income Tax Purposes $ 186,037,282
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
1.The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2.Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3.Provides evidence of ownership in one or more underlying municipal bonds.
INCOME TAX INFORMATION
At November 30, 1996, the fund had a capital loss carryforward of
approximately $4,000 which will expire on November 30, 2002.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value - $ 186,037,498
See accompanying schedule
Interest receivable 1,311,490
TOTAL ASSETS 187,348,988
LIABILITIES
Payable to custodian bank $ 287,975
Distributions payable 10,870
Accrued management fee 75,840
TOTAL LIABILITIES 374,685
NET ASSETS $ 186,974,303
Net Assets consist of:
Paid in capital $ 186,977,901
Accumulated net realized gain (loss) on investments (3,951)
Unrealized gain from accretion of market discount 353
NET ASSETS, for 186,977,901 shares outstanding $ 186,974,303
NET ASSET VALUE, offering price and redemption price per $1.00
share ($186,974,303 (divided by) 186,977,901 shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
INTEREST INCOME $ 6,388,692
EXPENSES
Management fee $ 903,635
Non-interested trustees' compensation 749
Total expenses before reductions 904,384
Expense reductions (8,109) 896,275
NET INTEREST INCOME 5,492,417
REALIZED AND UNREALIZED GAIN (LOSS) 9,482
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from 353
accretion
of market discount
NET GAIN (LOSS) 9,835
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,502,252
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,492,417 $ 5,464,560
Net interest income
Net realized gain (loss) 9,482 4,063
Increase (decrease) in net unrealized gain from 353 (416)
accretion
of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,502,252 5,468,207
FROM OPERATIONS
Distributions to shareholders from net interest income (5,492,417) (5,464,560)
Share transactions at net asset value of $1.00 per share 204,280,325 190,588,598
Proceeds from sales of shares
Reinvestment of distributions from net interest income 5,308,500 5,248,200
Cost of shares redeemed (198,246,723) (187,273,625)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,342,102 8,563,173
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 11,351,937 8,566,820
NET ASSETS
Beginning of period 175,622,366 167,055,546
End of period $ 186,974,303 $ 175,622,366
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .030 .034 .023 .022 .030
Operations
Net interest income
Less Distributions
From net interest income (.030) (.034) (.023) (.022) (.030)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 3.08% 3.41% 2.28% 2.21% 3.08%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 186,974 $ 175,622 $ 167,056 $ 163,102 $ 86,672
(000 omitted)
Ratio of expenses to average .50% .50% .50% .24% .02%
net assets B B
Ratio of net interest income to 3.04% 3.36% 2.25% 2.17% 2.90%
average net assets
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Connecticut Municipal Income Fund (the income fund) (formerly
Spartan Connecticut Municipal High Yield Portfolio) is a fund of Fidelity
Court Street Trust. Spartan Connecticut Municipal Money Market Fund (the
money market fund) (formerly Spartan Connecticut Municipal Money Market
Portfolio) is a fund of Fidelity Court Street Trust II. Each trust is
registered under the Investment Company Act of 1940, as amended (the 1940
Act), as an open-end management investment company. Fidelity Court Street
Trust and Fidelity Court Street Trust II (the trusts) are organized as a
Massachusetts business trust and a Delaware business trust, respectively.
Each fund is authorized to issue an unlimited number of shares. The
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the money
market fund and the high yield fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. 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, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each 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. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, market discount, capital loss carryforwards and
losses deferred due to wash sales and futures and options. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. Losses
may arise due to changes in the market value of the underlying securities
or if the counterparty does not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The income fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $97,649,105 and $119,176,945, respectively. The
market value of futures contracts opened and closed during the period
amounted to $62,245,254 and $82,174,677, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% and .50% of average net assets
for the income and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$3,490 and $2,753 for the income and money market funds, respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use its resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of each Board of Trustees, the Plans also authorize payments
to third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $257 for the
income fund. No payments were made for the money market fund for the
period.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $99,479 and $8,109 for the
income and money market funds, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court Street
Trust II and the Shareholders of Spartan Connecticut Municipal Income Fund
and Spartan Connecticut Municipal Money Market Fund:
We have audited the accompanying statements of assets and liabilities of
Fidelity Court Street Trust: Spartan Connecticut Municipal Income Fund
(formerly Spartan Connecticut Municipal High Yield Portfolio), and Fidelity
Court Street Trust II: Spartan Connecticut Municipal Money Market Fund
(formerly Spartan Connecticut Municipal Money Market Portfolio), including
the schedules of portfolio investments, as of November 30, 1996, the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Court Street Trust: Spartan Connecticut Municipal Income Fund
and Fidelity Court Street Trust II: Spartan Connecticut Municipal Money
Market Fund as of November 30, 1996, the results of their operations for
the year then ended, the changes in their net assets for each of the two
years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
DISTRIBUTIONS
The Board of Trustees of Spartan Connecticut Municipal Income Fund voted to
pay to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from sales
of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
1/6/97 1/3/97 $0.01
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Sarah H. Zenoble, Vice President
Deborah F. Watson, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President, MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant
Treasurer, MONEY MARKET FUND
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*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(registered trademark)
FLORIDA
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 20 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE 24 How the fund has done over time.
FUND TALK 26 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 28 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 29 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 34 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 38 Notes to the financial statements.
REPORT OF INDEPENDENT 41 The auditors' opinion.
ACCOUNTANTS
</TABLE>
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD,OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
SPARTAN FLORIDA MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value), and the effect of the $5 account
closeout fee on an average sized account. You can also look at the fund's
income. If Fidelity had not reimbursed certain fund expenses, the life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Fund 5.59% 48.08%
Lehman Brothers Florida 5.57% n/a
Municipal Bond Index
Florida Municipal Debt Funds Average 4.69% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, one year or since the fund started on March 16, 1992. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Lehman Brothers Florida
Municipal Bond Index, which includes Florida investment-grade municipal
bonds. To measure how the fund's performance stacked up against its peers,
you can compare it to the Florida municipal debt funds average, which
reflects the performance of 81 Florida tax-exempt municipal bond funds with
similar objectives tracked by Lipper Analytical Services over the past 12
months. Both benchmarks include reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Fund 5.59% 8.68%
Lehman Brothers Florida 5.57% n/a
Municipal Bond Index
Florida Municipal Debt Funds Average 4.69% 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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
SP Florida Muni Inc. LB Muni Bond Index
00427 LB015
1992/03/31 10000.00 10000.00
1992/04/30 10172.61 10089.00
1992/05/31 10350.03 10207.75
1992/06/30 10575.20 10379.03
1992/07/31 11028.26 10690.20
1992/08/31 10779.40 10585.97
1992/09/30 10823.45 10655.20
1992/10/31 10580.52 10550.46
1992/11/30 10944.39 10739.42
1992/12/31 11095.24 10849.07
1993/01/31 11245.75 10975.24
1993/02/28 11812.46 11372.22
1993/03/31 11626.24 11252.01
1993/04/30 11765.70 11365.54
1993/05/31 11841.80 11429.42
1993/06/30 12066.54 11620.18
1993/07/31 12101.29 11635.40
1993/08/31 12393.62 11877.65
1993/09/30 12566.59 12012.93
1993/10/31 12600.06 12036.12
1993/11/30 12423.65 11930.08
1993/12/31 12745.45 12181.92
1994/01/31 12914.00 12321.04
1994/02/28 12524.91 12001.93
1994/03/31 11935.22 11513.21
1994/04/30 12024.45 11610.84
1994/05/31 12139.04 11711.51
1994/06/30 12056.43 11639.95
1994/07/31 12310.26 11853.31
1994/08/31 12320.58 11894.32
1994/09/30 12130.96 11719.71
1994/10/31 11814.13 11511.57
1994/11/30 11530.36 11303.44
1994/12/31 11886.42 11552.23
1995/01/31 12279.67 11882.39
1995/02/28 12704.70 12227.93
1995/03/31 12848.58 12368.43
1995/04/30 12858.11 12383.03
1995/05/31 13293.09 12778.17
1995/06/30 13130.49 12667.00
1995/07/31 13237.10 12787.08
1995/08/31 13405.68 12949.22
1995/09/30 13499.13 13031.19
1995/10/31 13706.26 13220.67
1995/11/30 13961.59 13440.00
1995/12/31 14100.58 13569.15
1996/01/31 14182.96 13671.60
1996/02/29 14061.09 13579.32
1996/03/31 13892.16 13405.77
1996/04/30 13847.66 13367.84
1996/05/31 13843.25 13362.49
1996/06/30 14002.86 13508.01
1996/07/31 14127.09 13630.93
1996/08/31 14122.39 13627.66
1996/09/30 14310.34 13818.45
1996/10/31 14461.71 13974.73
1996/11/30 14742.11 14230.47
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Florida Municipal Income Fund on March 31, 1992,
shortly after the fund started. As the chart shows, by November 30, 1996,
the value of the investment would have grown to $14,742 - a 47.42% increase
on the initial investment. This assumes the fund was still owned on
November 30, 1996, and therefore does not include the effect of the $5
account closeout fee. For comparison, look at how the Lehman Brothers
Municipal Bond Index, a total return performance benchmark for
investment-grade municipal bonds with maturities of at least one year, did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $14,230 a 42.30% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally move
in the opposite direction of
interest rates. In turn, the
share price, return, and yield
of a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30, MARCH 16, 199
2
(COMMENCEM
ENT
OF OPERATIONS)
TO
NOVEMBER 30,
1996 1995 1994 1993 1992
Dividend returns 5.10% 6.30% 5.01% 6.10% 4.74%
Capital appreciation
returns 0.49% 14.78% -12.21% 7.41% 5.19%
Total returns 5.59% 21.08% -7.20% 13.51% 9.93%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.44(cents) 27.32(cents) 54.63(cents)
Annualized dividend rate 4.85% 4.97% 4.97%
30-day annualized yield 4.66% - -
30-day annualized tax-equivalent yield 7.28% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.13 over
the past month, $10.96 over the past six months and $11.00 over the past
year, you can compare the fund's income over these three periods. The
30-day annualized YIELD is a standard formula for all funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield if you're
in the 36% 1996 federal tax bracket, but does not reflect payment of the
federal alternative minimum tax, if applicable.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Municipal bonds benefited from
steady demand and relatively low
supply during much of the year
that ended November 30, 1996.
For the past 12 months, the
Lehman Brothers Municipal Bond
Index - a broad measure of the
municipal bond market - had a
total return of 5.88%. In
comparison, the Lehman
Brothers Aggregate Bond Index -
a proxy for investment-grade
taxable bonds - had a total return
of 6.07%. Munis outperformed
their counterparts in the taxable
bond market for the first nine
months of the period. Factors that
helped munis included a lack of
supply of new issues, strong
demand for municipal bonds from
both insurance companies and
individual investors, and the
diminishing likelihood of significant
tax reform in the near future. Like
most domestic bonds, munis were
hurt by stronger-than-expected
signs of strength in the economy
earlier in 1996. Nevertheless, the
market conditions that supported
the muni market prevailed to the
point that munis entered the last
two months of the period trading at
expensive levels relative to their
taxable counterparts. At that point
and through October, the
performance of the municipal
market stalled somewhat, as
investor demand declined and
institutional investors sold off
some of their municipal bond
holdings to take profits. That sell-off
subsided somewhat in
November, when munis
outperformed comparable
Treasury securities.
An interview with Jonathan Short, Portfolio Manager of Spartan Florida
Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, JON?
A. For the 12-month period that ended November 30, 1996, the fund had a
total return of 5.59%. The Florida municipal debt funds average returned
4.69% for the same 12-month period, as tracked by Lipper Analytical
Services. Also for the same one year period, the Lehman Brothers Florida
Municipal Bond Index returned 5.57%.
Q. CHARGES OF CORRUPTION AND FISCAL MISMANAGEMENT CAUSED STANDARD & POOR'S
TO DOWNGRADE ITS CREDIT RATING OF BONDS ISSUED BY THE CITY OF MIAMI TO B
FROM A. WAS THE FUND ADVERSELY AFFECTED BY THIS DEVELOPMENT?
A. No, because the fund had no insured or uninsured direct obligations of
the City of Miami. So far, the damage this development caused appeared to
have been confined to Miami alone, and it had not spilled over to the rest
of the Florida municipal market by the end of the period.
Q. WHAT TYPES OF BONDS DID YOU EMPHASIZE?
A. When the market experienced a sell-off in the early months of the year,
investors pushed discount bond prices quite low. I emphasized these bonds
because I thought their prices were attractive, relative to what I believed
to be their true value. Over the past six months, interest rates have
fallen dramatically, and discount bonds actually performed quite well,
helping the fund's performance.
Q. THE FUND HAD LESS INVESTED IN BAA-RATED BONDS ON NOVEMBER 30, 1996, THAN
IT DID SIX MONTHS EARLIER. WHY WAS THAT?
A. Credit quality spreads - which measure the difference between yields on
bonds of the same maturity but different quality - narrowed over the year.
This meant that lower-rated, investment-grade Baa bonds offered less in the
way of additional yield over higher-rated bonds. Because spreads were
narrower than they had been in the previous six months, I was able to sell
some Baa-rated bonds and buy higher-quality bonds without sacrificing much
yield and, at the same time, improve the fund's overall credit quality.
Q. WHY DID THE FUND HAVE A LARGE WEIGHTING IN INTERMEDIATE BONDS - THOSE
MATURING IN 10 TO 20 YEARS?
A. The shape of the yield curve dictated my focus on intermediate-maturity
bonds. The yield curve - which measures the difference in yields among
bonds with various maturities - was quite flat in the longer end of the
curve, in my opinion. I didn't think that the incremental yield offered by
the longest maturity bonds was enough to warrant taking on their added
interest rate risk.
Q. ACROSS THE NATION, ELECTRIC UTILITIES - WHICH MADE UP 16.6% OF THE
FUND'S INVESTMENTS AT THE END OF THE PERIOD - HAVE COME UNDER PRESSURE
BECAUSE OF THE POTENTIAL FOR OUT-OF-STATE COMPETITION. ARE YOU CONCERNED
ABOUT HOW INCREASED COMPETITION MIGHT AFFECT FLORIDA ELECTRICS?
A. Let me start by pointing out that the fund's stake in electric utilities
is small relative to the proportion of the overall Florida market they
represent. That said, Florida currently is not under the same kind of
deregulation pressure that some states - such as California, Massachusetts,
New York and Pennsylvania - are facing. While competition may be an issue
for Florida electrics some time down the road, I don't see any imminent
threat of it over the near term. Even so, federal or state regulation
sometime in the future could have an effect on Florida electric utilities.
So, I emphasized those utilities that I think have the potential to do well
in a more competitive environment.
Q. THE PERIOD FROM THE END OF MAY THROUGH THE END OF NOVEMBER WAS A GOOD
ONE FOR MUNICIPAL BONDS. DO YOU EXPECT MORE OF THE SAME OVER THE NEXT SIX
MONTHS?
A. I believe that the fund's total return will derive more from the income
generated by municipal bonds and less from the across-the-board price
appreciation caused by falling interest rates that occurred over the past
six months.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current
tax-free income and exemption
from the Florida intangible tax
by normally investing in
investment-grade municipal
securities
TRADING SYMBOL: FFLIX
FUND NUMBER: 427
START DATE: March 16, 1992
SIZE: as of November 30,
1996, more than $391 million
MANAGER: Jonathan Short,
since May 1996; manager,
Fidelity California Municipal
Income Fund; Fidelity
California Insured Municipal
Income, Fidelity Minnesota
Municipal Income, Spartan
Arizona Municipal Income,
Spartan California Municipal
Income and Spartan
California Intermediate
Municipal Income funds,
since 1995; Fidelity Advisor
California Municipal Income
Fund, since February 1996;
joined Fidelity in 1990
(checkmark)
JON SHORT ON THE FLORIDA
ECONOMY:
"Florida's economy
continues to expand at a
healthy pace, a
continuation of a trend we've
seen since the early 1990s.
The state's economic growth
has been fueled by gains in
the service sector and strong
population growth. Looking
ahead, a national economic
slowdown could translate
into a much slower Florida
economy. But, I expect
Florida's rate of growth to
outpace that of the nation.
Since Florida levies no
personal income tax, the
state's revenues are more
dependent than other states
on its sales tax, which makes
tourism very important to the
state's economy. However,
tourism currently is quite
strong and vibrant."
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Electric Revenue 16.6 14.4
Health Care 14.6 14.0
Transportation 14.3 14.8
Water & Sewer 11.8 11.3
Special Tax 10.7 10.2
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1996
6 MONTHS AGO
Years 14.1 14.2
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF NOVEMBER 30, 1996
6 MONTHS AGO
Years 7.8 7.8
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THE ABOVE EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Aaa 61.4%
Aa, A 22.0%
Baa 11.7%
Ba, B 0.0%
Non-rated 3.1%
Short-term
investments 1.8%
Aaa 59.7%
Aa, A 18.2%
Baa 15.2%
Ba, B 0.0%
Non-rated 3.5%
Short-term
investments 3.4%
Row: 1, Col: 1, Value: 60.4
Row: 1, Col: 2, Value: 22.0
Row: 1, Col: 3, Value: 11.7
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.1
Row: 1, Col: 6, Value: 2.8
Row: 1, Col: 1, Value: 59.7
Row: 1, Col: 2, Value: 18.2
Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.5
Row: 1, Col: 6, Value: 3.4
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 98.2%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - 95.7%
Alachua County Health Facs. Auth. Health Facs.
Rev. (Santa Fe Health Care Facs. Proj.):
Rfdg. 6% 11/15/09
(Escrowed to Maturity) (d) Baa1 $ 2,950,000 $ 3,082,750
Rfdg. 6.05% 11/15/16
(Escrowed to Maturity) (d) Baa1 6,230,000 6,611,587
7.60% 11/15/13
(Pre-Refunded to 11/15/00 @ 102) (d) Baa1 1,000,000 1,140,000
Brevard County School Board 5.10% 7/1/07
(AMBAC Insured) Aaa 2,500,000 2,518,750
Broward County Hsg. & Fin. Auth. Single-Family
Mtg. Rev. 6.65% 8/1/21
(GNMA/FNMA Coll.) Aaa 2,000,000 2,092,500
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A 10,725,000 11,851,125
Broward County Spl. Oblig.:
5.50% 1/1/02 (AMBAC Insured) Aaa 1,865,000 1,948,925
5.50% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,441,800
5.50% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,720,712
5% 1/1/10 (AMBAC Insured) Aaa 1,500,000 1,464,375
Cocoa Wtr. & Swr. Rev. Impt. Series B,
5.125% 10/1/13 (AMBAC Insured) Aaa 1,245,000 1,206,094
Dade County Aviation Rev. Rfdg.:
Series E, 6% 10/1/09 (AMBAC Insured) Aaa 3,000,000 3,281,250
Series Y, 5.30% 10/1/05 Aa 3,460,000 3,594,075
Dade County Ed. Facs. Rev. (Univ. of Miami)
5.125% 4/1/09 (MBIA Insured) Aaa 1,475,000 1,471,312
Dade County Gtd. Entitlement Rev. Rfdg.:
Series B, 0% 2/1/02 (MBIA Insured) Aaa 1,810,000 1,429,900
0% 8/1/18 (AMBAC Insured)
(Pre-Refunded to 2/1/06 @ 40.446) (d) Aaa 14,835,000 3,820,012
Dade County Pub. Facs. Rev. Rfdg.
(Jackson Mem. Hosp.)
Series A, 4.75% 6/1/10, (MBIA Insured) Aaa 3,540,000 3,323,175
Dade County Resource Recovery Fac. Rev. Rfdg.
5.50% 10/1/09 (AMBAC Insured) (b) Aaa 4,000,000 4,075,000
Dade County Seaport Rev.:
Rfdg. Series 95:
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,339,425
6.50% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,706,250
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,233,875
6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,758,094
6.20% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,050,256
6.20% 10/1/10 (MBIA Insured) Aaa 2,205,000 2,439,281
Dade County Spl. Oblig. Rev. Rfdg. Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,026,400
0% 10/1/04 (AMBAC Insured) Aaa 5,045,000 3,481,050
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev.:
6.25% 10/1/06 (FGIC Insured) Aaa $ 1,500,000 $ 1,680,000
6.25% 10/1/08 (FGIC Insured) Aaa 1,100,000 1,236,125
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,120,000
Dunedin Hosp. Rev. Rfdg. (Mease Health Care)
5.25% 11/15/06 (MBIA Insured) Aaa 1,400,000 1,443,750
Dunedin Util Sys. Rev. Rfdg. 6.25% 10/1/11
(FGIC Insured) Aaa 1,360,000 1,516,400
Duval County Hsg. Fin. Auth. Single Family Mtg.
Rev. Series C, 7.70% 9/1/24 (FGIC Insured)
(GNMA Coll.) Aaa 710,000 757,037
Duval County School Dist. Rev. Rfdg.
6.30% 8/1/06 (AMBAC Insured) Aaa 5,000,000 5,450,000
Escambia County Health Facs. Auth. Rev. Rfdg.:
(Baptist Hosp. Inc.) Series B,
6% 10/1/14 BBB+ 2,825,000 2,839,125
(Baptist Hosp. & Baptist Manor)
6.75% 10/1/14 BBB+ 3,250,000 3,432,812
Escambia County Poll. Cont. Rev.:
Rfdg. (Gulf Pwr. Co. Proj.) 6.75% 3/1/22 A1 2,000,000 2,045,120
(Champion Int'l. Corp. Proj.) (b):
6.90% 8/1/22 Baa1 5,000,000 5,306,250
6.40% 9/1/30 Baa1 1,000,000 1,020,000
Escambia County Util. Auth. Util. Sys. Rev.
Series B, 6.25% 1/1/15 (FGIC Insured) Aaa 1,500,000 1,666,875
Florida Board of Ed. Admin. Cap. Outlay (Pub. Ed.):
Rfdg.:
Series A:
5% 6/1/09 Aa 1,000,000 1,001,250
5% 6/1/24 Aa 5,000,000 4,637,500
Series D:
5% 6/1/15 Aa 5,750,000 5,498,437
4.75% 6/1/16 Aa 2,000,000 1,805,000
Series A, 5.75% 1/1/13 Aa 1,000,000 1,023,750
Series C, 5.40% 6/1/06 Aa 1,500,000 1,569,375
Florida Div. Board Fin. Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources Preservation)
Series 2000 A:
6.75% 7/1/08 (AMBAC Insured) Aaa 1,350,000 1,481,625
5.70% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,138,750
Florida Gen. Oblig. (Jacksonville Trans.)
6.40% 7/1/22 Aa 1,100,000 1,188,000
Florida Hsg. Fin. Agcy. Single-Family Mtg. Rfdg.:
Series A:
6.35% 7/1/14 Aa1 1,370,000 1,419,662
6.55% 7/1/14 (b) Aaa 1,430,000 1,497,925
Series B, 6.55% 7/1/17 (b) Aaa 1,375,000 1,436,875
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Hsg. Fin. Agcy. Multi-Family Mtg. Rfdg.
(Park Colony Proj.) Series D, 5.10% 4/1/02 A+ $ 2,500,000 $ 2,500,000
Florida Mid-Bay Bridge Auth. Rev. Series A:
7.50% 10/1/17 (e) A 1,700,000 1,853,000
6.875% 10/1/22 (Escrowed to Maturity) (d) - 3,000,000 3,532,500
Florida Muni. Pwr. Agcy. Rev. Rfdg. (Stanton II Proj.):
4.50% 10/1/16 (AMBAC Insured) Aaa 4,400,000 3,861,000
6.50% 10/1/20 (AMBAC Insured)
(Pre-Refunded to 10/1/02 @ 102) (d) Aaa 1,000,000 1,122,500
Florida Tpk. Auth. Tpk. Rev. Series A:
Rfdg. 5% 7/1/19 (FGIC Insured) Aaa 2,000,000 1,890,000
5.50% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,436,875
5.50% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,165,000
6.25% 7/1/09 (FGIC Insured) Aaa 1,825,000 1,964,156
7.20% 7/1/11 (AMBAC Insured)
(Pre-Refunded to 7/1/01 @ 102) (d) Aaa 1,500,000 1,704,375
Gainesville Utils. Sys. Rev.:
Rfdg. Series A, 5.75% 10/1/04 Aa 1,000,000 1,076,250
Series B, 6.50% 10/1/10 Aa 1,600,000 1,826,000
Greater Orlando Aviation Auth. Arpt. Facs. Rev.
Series A, 6.50% 10/1/05 (FGIC Insured) (b) Aaa 3,550,000 3,922,750
Hillsborough County Aviation Auth. Rev. Rfdg.
(Tampa Int'l. Arpt.) Series A, 6.90% 10/1/11
(FGIC Insured) Aaa 4,250,000 4,584,687
Hillsborough County Port. Auth. Dist. Rev. Rfdg.
(Tampa Port Auth.):
6.50% 6/1/03 (FSA Insured) Aaa 2,000,000 2,197,500
6.50% 6/1/05 (FSA Insured) Aaa 2,000,000 2,217,500
Hillsborough County Rev. Rfdg. (Envir.
Sensitive LDS Acquisition & Protection)
6% 7/1/02 (AMBAC Insured) Aaa 2,080,000 2,243,800
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa 8,000,000 5,260,000
0% 8/1/06 (MBIA Insured) Aaa 10,000,000 6,200,000
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,112,500
Indian River County Wtr. & Swr. Rev. Rfdg.
Series A, 5.50% 9/1/11 (FGIC Insured) Aaa 2,000,000 2,047,500
Jacksonville Elec. Auth. Rev.:
Rfdg.:
(Bulk Pwr.-Scherer 4 Proj. A)
5.20% 10/1/11 Aa1 3,000,000 2,966,250
(St. Johns River Pwr.#2) Series 7,
5.50% 10/1/14 Aa1 1,500,000 1,503,750
(Bulk Pwr. Supply-Scherer) 6.75% 10/1/21
(Pre-Refunded to 10/1/00 @ 101.50) (d) Aaa 1,000,000 1,102,500
(St. Johns River Issue #2) Series 5,
7% 10/1/09 Aa1 2,490,000 2,686,087
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Excise Tax Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa $ 1,000,000 $ 1,097,500
Series A:
5% 10/1/09 (FGIC Insured) Aaa 1,335,000 1,333,331
6.50% 10/1/11 (AMBAC Insured) Aaa 1,200,000 1,299,000
Series B, 5.60% 10/1/08 (FGIC Insured) (b) Aaa 2,300,000 2,337,375
Jacksonville Health Facs. Auth. Hosp. Rev.
(Baptist Med. Ctr.) Series A,
7.30% 6/1/19 (MBIA Insured) Aaa 500,000 539,375
Jacksonville Health Facs. Auth. Ind. Dev. Rev.
(Cypress Village Proj./Nat'l. Benevolent Assoc.):
Rfdg. 7% 12/1/22 Baa1 2,000,000 2,110,000
7% 12/1/14 Baa1 1,000,000 1,055,000
6.25% 12/1/23 Baa1 2,710,000 2,723,550
8% 12/1/24 Baa1 2,740,000 3,103,050
Jacksonville Ind. Dev. Rev. Rfdg. (Cargill, Inc. Proj.)
6.40% 3/1/11 AA- 1,250,000 1,332,812
Jacksonville Sales Tax Rev.
(River City Renaissance Proj.):
6% 10/1/02 (FGIC Insured) Aaa 1,500,000 1,623,750
6% 10/1/04 (FGIC Insured) Aaa 3,430,000 3,751,562
5.65% 10/1/14 (FGIC Insured) Aaa 1,900,000 1,940,375
Jacksonville Wtr. & Swr. Dev. Rev. (Jacksonville
Suburban Utils.) 6.75% 6/1/22 (b) A3 1,915,000 2,044,262
Jacksonville Wtr. & Swr. Dist. Rev. 6% 10/1/06
(MBIA Insured) Aaa 2,075,000 2,274,719
Key West Util. Board Elec. Rev. Rfdg. 0% 10/1/14
(AMBAC Insured) Aaa 6,755,000 2,550,013
Lakeland Elec. & Wtr. Rev. Rfdg. (Jr. Sub. Lien):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,672,100
6.50% 10/1/06 (FGIC Insured) Aaa 2,200,000 2,497,000
6.50% 10/1/07 (FGIC Insured) Aaa 4,095,000 4,668,300
0% 10/1/09 (FGIC Insured) Aaa 2,840,000 1,455,500
Leesburg Hosp. Rev. Rfdg. (Leesburg Reg. Med.
Ctr. Proj./Quorum Health Group, Inc.):
Series A, 5.60% 7/1/08 A 5,000,000 5,125,000
Series B:
5.625% 7/1/13 A 2,795,000 2,739,100
5.70% 7/1/18 A 3,140,000 3,061,500
Leon County Rev. Rfdg.
5.50% 10/1/07 (MBIA Insured) Aaa 1,000,000 1,045,000
Martin County Ind. Dev. Auth. Rev.
(Indiantown Cogeneration Proj.)
Series A, 7.875% 12/15/25 Baa3 1,000,000 1,147,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Melbourne Arpt. Rev. Rfdg. (b):
5.75% 10/1/97 (MBIA Insured) Aaa $ 190,000 $ 193,015
5.75% 10/1/98 (MBIA Insured) Aaa 205,000 211,406
5.75% 10/1/99 (MBIA Insured) Aaa 215,000 223,869
6.25% 10/1/00 (MBIA Insured) Aaa 230,000 245,525
6.25% 10/1/01 (MBIA Insured) Aaa 240,000 258,900
6.25% 10/1/02 (MBIA Insured) Aaa 260,000 283,725
6.25% 10/1/03 (MBIA Insured) Aaa 270,000 296,663
6.50% 10/1/04 (MBIA Insured) Aaa 290,000 325,163
6.50% 10/1/05 (MBIA Insured) Aaa 310,000 349,138
6.50% 10/1/06 (MBIA Insured) Aaa 325,000 366,844
6.75% 10/1/07 (MBIA Insured) Aaa 350,000 402,938
6.75% 10/1/08 (MBIA Insured) Aaa 375,000 432,188
6.75% 10/1/09 (MBIA Insured) Aaa 400,000 462,000
6.75% 10/1/10 (MBIA Insured) Aaa 425,000 489,813
Naples Hosp. Rev. Rfdg.
(Naples Commty. Hosp. Proj.):
5.10% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,515,000
5% 10/1/19 (MBIA Insured) Aaa 1,000,000 931,250
North Broward Hosp. Dist. Rev. Rfdg.
6.40% 1/1/06 (MBIA Insured) Aaa 950,000 1,035,500
North Miami Ed. Facs. Rev.
(Johnson & Wales Univ. Proj.)
Series A, 6.125% 4/1/20 A- 6,605,000 6,621,513
Orange County Health Facs. Auth. Hosp. Rev.:
(Adventist Health Sys.) 5.75% 11/15/05
(AMBAC Insured) Aaa 2,000,000 2,150,000
(Orlando Reg. Health Care) Series A,
6.25% 10/1/18 (MBIA Insured) Aaa 2,500,000 2,778,125
Orange County Hsg. Fin. Auth. Single-Family
Mtg. Rev. (Mtg. Backed Secs. Proj.)
(GNMA/FNMA Coll.) 6.40% 10/1/14 AAA 2,000,000 2,087,500
Orange County Sales Tax Rev. Series B,
5.375% 1/1/24 A1 1,000,000 958,750
Orange County Tourist Dev. Tax Rev. Rfdg.
Series A:
5.75% 10/1/07 (MBIA Insured) Aaa 3,620,000 3,886,975
5.85% 10/1/08 (MBIA Insured) Aaa 1,795,000 1,936,356
5.90% 10/1/10 (MBIA Insured) Aaa 1,000,000 1,078,750
Orlando & Orange County Expressway Auth.
Rev. Rfdg. Sr. Lien 5.25% 7/1/14
(AMBAC Insured) Aaa 4,000,000 3,945,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Orlando Util. Commission Wtr. & Elec. Rev. Rfdg.:
Sub Series A:
5% 10/1/20
(Pre-Refunded to 10/1/01 @ 102) (d) Aa $ 1,500,000 $ 1,396,875
6.50% 10/1/20 Aaa 6,055,000 6,728,619
Sub-Series D, 6.75% 10/1/17 Aa 7,000,000 8,295,000
6% 10/1/10 Aa1 2,405,000 2,615,438
Orlando Wtr. & Elec. Rev. 5.538% 10/31/13 Aa 9,400,000 9,411,750
Osceola County School Board Rev.
Series A, 5.25% 6/1/15 (AMBAC Insured) Aaa 3,750,000 3,665,625
Pinellas Park Pub. Impt. Rev. Rfdg. Series A,
5% 10/1/13 (FGIC Insured) Aaa 1,000,000 958,750
Plantation Health Facs. Auth. Rev.
(Covenant Retirement Communities Inc.)
7.75% 12/1/22 BBB+ 2,500,000 2,709,375
Polk County Ind. Dev. Auth. Ind. Dev. Rev.
(Winter Haven Hosp.)
Series 2, 6.25% 9/1/15 (MBIA Insured) Aaa 1,480,000 1,561,400
Reedy Creek Util. Rev. 6.50% 10/1/16
(MBIA Insured) (Pre-Refunded to
10/1/01 @ 101) (d) Aaa 1,350,000 1,488,375
Sarasota Wtr. & Swr. Util. Rev. Rfdg.:
5.25% 10/1/00 (FGIC Insured) Aaa 1,150,000 1,193,125
6.25% 10/1/04 (FGIC Insured) Aaa 1,450,000 1,609,500
6.25% 10/1/07 (FGIC Insured) Aaa 1,735,000 1,938,863
Seminole County Wtr. & Swr. Rev. Rfdg. & Impt.:
6% 10/1/09 (MBIA Insured) Aaa 1,500,000 1,642,500
6% 10/1/12 (MBIA Insured) Aaa 1,500,000 1,627,500
South Miami Health Facs. Auth. Hosp. Rev. Rfdg.
(Baptist Health Sys.)
5.50% 10/1/05 (MBIA Insured) Aaa 1,980,000 2,083,950
Sumter County School Dist. Rev. (Multi-Dist.
Loan Prog.) 7.15% 11/1/15 (FSA Insured) Aaa 1,000,000 1,222,500
Sunrise Util. Sys. Rev. (Cap. Appreciation) Series A:
0% 10/1/00 (AMBAC Insured) Aaa 1,070,000 905,488
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 987,656
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 767,500
0% 10/1/03 (AMBAC Insured) Aaa 1,000,000 727,500
Sunshine State Governmental Fing. Commission. Rev.
Series A, 5.50% 10/1/05 (FGIC Insured) Aaa 1,000,000 1,056,250
Tampa Rev. (Allegheny Health Sys. -
St. Joseph's Hosp.):
6.70% 12/1/07 (MBIA Insured) Aaa 2,535,000 2,794,838
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 163,875
Tampa Wtr. & Swr. Rev.:
Rfdg. Series B, 5% 10/1/14 (FGIC Insured) Aaa 1,000,000 958,750
5.125% 10/1/17 (FGIC Insured) Aaa 6,890,000 6,683,300
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Tarpon Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.):
7.50% 5/1/11 BBB- $ 1,225,000 $ 1,313,813
7.625% 5/1/21 BBB- 4,245,000 4,573,988
Volusia County Ed. Facs. Auth. (Embry Riddle
Aeronautical Univ.) 6.125% 10/15/16 Baa2 2,000,000 2,057,500
370,428,279
PUERTO RICO - 2.5%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Rev. Series T, 6.625% 7/1/18
(Pre-Refunded to 7/1/02 @ 101.50) (d) Aaa 1,500,000 1,689,375
Puerto Rico Commonwealth Infrastructure Fing.
Auth. Spl. Series A, 7.50% 7/1/09 Baa1 1,000,000 1,062,500
Puerto Rico Elec. Pwr. Auth. Rev.:
Rfdg. Series W, 6.50% 7/1/05 (MBIA Insured) Aaa 3,000,000 3,405,000
6.50% 7/1/06 (MBIA Insured) Aaa 2,000,000 2,280,000
Puerto Rico Pub. Bldgs. Auth. Gtd. Pub. Ed. &
Health Facs. Series L, 6.875% 7/1/21
(Pre-Refunded to 7/1/02 @ 101.50) (d) Aaa 1,000,000 1,138,750
9,575,625
TOTAL MUNICIPAL BONDS
(Cost $362,950,836) 380,003,904
MUNICIPAL NOTES (A) - 1.8%
FLORIDA - 1.8%
Brevard County School Dist. TAN
4.20% 6/30/97 MIG 1 2,000,000 2,008,100
Broward County Hsg. Fin. Auth. Multi-Family Hsg.
Rev. Rfdg. (Jacaranda Village Apts. Proj.) 3.45%,
LOC Marine Midland Bank, VRDN VMIG 2 1,000,000 1,000,000
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Children's Hosp. Proj.) 3.50% (AMBAC
Insured) (BPA SunTrust Bank, Miami) VRDN A-1+ 1,200,000 1,200,000
Dade County Ind. Dev. Auth. (Pwr. & Lt. Proj.)
Series 1993, 4.15%, VRDN VMIG 1 1,400,000 1,400,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Hsg. Fin. Agcy. (Ashley Lake Park II Proj.)
Series J, 3.60%, LOC Barclays Bank PLC,
UK, VRDN (b) VMIG 1 $ 1,100,000 $ 1,100,000
Naples Hosp. Rev. (Naples Commty. Hosp. Proj.)
Series 1992, 3.65%, LOC Mellon Bank, VRDN A-1 100,000 100,000
TOTAL MUNICIPAL NOTES
(Cost $6,806,011) 6,808,100
TOTAL INVESTMENTS - 100%
(Cost $369,756,847) $386,812,004
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
32 Municipal Bond Contracts Dec. 1996 $ 3,806,000 $ 91,585
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.0%
SECURITY TYPE ABBREVIATIONS
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. A portion of the Security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $545,000.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 81.9% AAA, AA, A 85.7%
Baa 7.9% BBB 6.1%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or
Moody's amounted to 3.1%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Electric Revenue 16.6%
Health Care 14.6
Transportation 14.3
Water and Sewer 11.8
Special Tax 10.7
General Obligation 9.5
Escrowed/Pre-Refunded 8.6
Others (individually less than 5%) 13.9
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $369,764,505. Net unrealized appre-
ciation aggregated $17,047,499, of which $17,249,712 related to appreciated
investment securities and $202,213 related to depreciated investment
securities.
At November 30, 1996, the fund had a capital loss carryforward of
approximately $1,277,092 which will expire on Novem- ber 30, 2003.
At November 30, 1996, the fund was required to defer approximately $303,921
of losses on futures contracts.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 11.49% of the fund's income dividends was
subject to the federal alternative minimum tax.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
6.ASSETS 7. 8.
9.Investment in securities, at value (cost $369,756,847) 10. $ 386,812,004
- - See accompanying schedule
11.Interest receivable 12. 5,336,153
13.Receivable for daily variation on futures contracts 14. 27,000
15. 16.TOTAL ASSETS 17. 392,175,157
18.LIABILITIES 19. 20.
21.Payable to custodian bank $ 18,555 22.
23.Payable for fund shares redeemed 269,154 24.
25.Distributions payable 582,595 26.
27.Accrued management fee 174,790 28.
29. 30.TOTAL LIABILITIES 31. 1,045,094
32.33.NET ASSETS 34. $ 391,130,063
35.Net Assets consist of: 36. 37.
38.Paid in capital 39. $ 375,663,577
40.Accumulated undistributed net realized gain (loss) on 41. (1,680,256)
investments
42.Net unrealized appreciation (depreciation) on 43. 17,146,742
investments
44.45.NET ASSETS, for 34,823,466 shares outstanding 46. $ 391,130,063
47.48.NET ASSET VALUE, offering price and redemption 49. $11.23
price per share ($391,130,063 (divided by) 34,823,466 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1996
50.INTEREST INCOME 51. $ 21,502,242
52.EXPENSES 53. 54.
55.Management fee $ 2,148,566 56.
57.Non-interested trustees' compensation 1,629 58.
59. Total expenses before reductions 2,150,195 60.
61. Expense reductions (52,507) 2,097,688
62.63.NET INTEREST INCOME 64. 19,404,554
65.REALIZED AND UNREALIZED GAIN (LOSS) 67. 68.
66.Net realized gain (loss) on:
69. Investment securities 3,392,653 70.
71. Futures contracts (705,317) 2,687,336
72.Change in net unrealized appreciation (depreciation) 73. 74.
on:
75. Investment securities (1,025,202) 76.
77. Futures contracts 58,999 (966,203)
78.79.NET GAIN (LOSS) 80. 1,721,133
81.82.NET INCREASE (DECREASE) IN NET ASSETS 83. $ 21,125,687
RESULTING
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
84. YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
85.INCREASE (DECREASE) IN NET ASSETS
86.Operations $ 19,404,554 $ 19,727,290
Net interest income
87. Net realized gain (loss) 2,687,336 (2,142,817)
88. Change in net unrealized appreciation (depreciation) (966,203) 51,419,084
89. 90.NET INCREASE (DECREASE) IN NET ASSETS 21,125,687 69,003,557
RESULTING
FROM OPERATIONS
91.Distributions to shareholders (19,404,554) (19,727,290)
From net interest income
92. From net realized gain (177,944) -
93. 94.TOTAL DISTRIBUTIONS (19,582,498) (19,727,290)
95.Share transactions 55,831,105 78,744,845
Net proceeds from sales of shares
96. Reinvestment of distributions 12,253,000 12,331,494
97. Cost of shares redeemed (74,511,282) (79,953,207)
98. Redemption fees 23,440 40,228
99.100. (6,403,737) 11,163,360
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS
101. (4,860,548) 60,439,627
102.TOTAL INCREASE (DECREASE) IN NET ASSETS
103.NET ASSETS 104. 105.
106. Beginning of period 395,990,611 335,550,984
107. End of period $ 391,130,063 $ 395,990,611
108.OTHER INFORMATION 110. 111.
109.Shares
112. Sold 5,063,476 7,475,522
113. Issued in reinvestment of distributions 1,112,117 1,152,868
114. Redeemed (6,776,104) (7,660,480)
115. Net increase (decrease) (600,511) 967,910
</TABLE>
FINANCIAL HIGHLIGHTS
116. YEARS ENDED NOVEMBER 30, MARCH 16, 1992
(COMMENCEME
NT OF
OPERATIONS) TO
NOVEMBER 30,
117. 1996 1995 1994 E 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
118.SELECTED PER-SHARE DATA
119.Net asset value, beginning $ 11.180 $ 9.740 $ 11.290 $ 10.520 $ 10.000
of period
120.Income from Investment .546 .573 .587 .615 .459
Operations
Net interest income
121. Net realized and .054 1.439 (1.352) .777 .514
unrealized
gain (loss)
122. Total from investment .600 2.012 (.765) 1.392 .973
operations
123.Less Distributions
124. From net interest income (.546) (.573) (.587) (.615) (.459)
125. From net realized gain (.005) - (.200) (.010) -
126. Total distributions (.551) (.573) (.787) (.625) (.459)
127.Redemption fees added to .001 .001 .002 .003 .006
paid
in capital
128.Net asset value, end of $ 11.230 $ 11.180 $ 9.740 $ 11.290 $ 10.520
period
129.TOTAL RETURN B 5.59% 21.09% (7.19)% 13.52% 9.94%
130.RATIOS AND SUPPLEMENTAL
DATA
131.Net assets, end of period $ 391,130 $ 395,991 $ 335,551 $ 428,367 $ 237,109
(000 omitted)
132.Ratio of expenses to .55% .55% .54% .25% .03% A, C
average C C
net assets
133.Ratio of expenses to .54% .55% .54% .25% .03% A
average net assets after D
expense reductions
134.Ratio of net interest 4.96% 5.37% 5.49% 5.52% 6.25% A
income to average net assets
135.Portfolio turnover rate 28% 65% 49% 50% 38% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
E EFFECTIVE DECEMBER 31, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. A fund's total return reflects the change in share price
over a given period, reinvestment of its dividends (or income), and the
effect of the $5 account closeout fee on an average size account. Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed the fund for certain expenses, the life of fund
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal 3.17% 13.11%
Money Market Fund
All Tax-Free Money Market Funds Average 3.02% 11.70%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
August 24, 1992. For example, if you invested $1,000 in a fund that had a
5% return over the past year, the value of your investment would be $1,050.
To measure how the fund's performance stacked up against its peers, you can
compare it to the all tax-free money market funds average, which reflects
the performance of 413 tax-free money market funds with similar objectives
tracked by IBC Financial Data, Inc. over the past 12 months. (The periods
covered by the IBC Financial Data, Inc. numbers are the closest available
match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal 3.17% 2.92%
Money Market Fund
All Tax-Free Money Market Funds Average 3.02% 2.63%
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YIELDS
11/27/95 2/26/96 5/27/96 9/2/96 12/2/96
Spartan Florida Municipal 3.39% 3.03% 3.27% 3.12% 3.19%
Money Market Fund
All Tax-Free Money Market 3.30% 2.87% 3.12% 2.96% 3.05%
Funds Average
Spartan Florida Municipal 5.30% 4.73% 5.11% 4.88% 4.98%
Money Market Fund -
Tax-equivalent
</TABLE>
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 all tax-free money market funds average. Or you
can look at the fund's tax-equivalent yield, which is based on an effective
1996 federal tax rate of 36%. A portion of the fund's income may be subject
to the alternative minimum tax. Figures for the all tax-free money market
funds average are from IBC Financial Data, Inc.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Spartan Florida
Municipal Money Market Fund
Q. JAN, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST YEAR?
A. At the beginning of 1996, the Federal Reserve Board was in the process
of lowering the interest rate banks charge each other, known as the federal
funds rate, in order to stimulate the economy, and the market was
anticipating that the Fed would continue to do so. Market sentiment changed
rapidly, however, when Federal Reserve Board Chairman Alan Greenspan, in
his testimony before Congress, was surprisingly optimistic about the
underlying strength of the economy. Then the February employment report
showed the economy was generating new jobs at a faster rate than expected.
A dramatic sell-off and sharply rising interest rates ensued. Over the
summer, the Treasury market tended to trade within a narrow range, heading
down just before the release of economic data - fearing that signs of
economic strength would lead to Fed rate increases - then back up when the
numbers came out and weren't as strong as anticipated. While the economy
was expanding at a strong pace, the Fed stayed on the sidelines waiting for
its forecasted slowdown to take shape. As we moved into the fall, consumer
spending slowed and it became evident to many in the market that the Fed
would stand pat for the foreseeable future.
Q. WHAT WAS YOUR STRATEGY WHILE ALL OF THIS WAS GOING ON?
A. At the beginning of the period, the fund had an average maturity of 52
days. As usually happens, many investors added a significant amount of
money to the fund by the end of December in order to seek shelter from the
Florida intangible personal property tax. Most of the new assets were
invested in variable rate securities to help the fund accommodate the large
outflows that I knew would occur in January. By the end of that month,
assets declined significantly. I then let the fund's average maturity roll
down to preserve flexibility and to prepare for the supply of new issuance
that typically occurs in June, when many school districts seek financing.
After making purchases in the summer, the average maturity of the fund
again rolled down as we entered the fall and supply dwindled. As supply
became available early in the fourth quarter, I extended the fund's average
maturity to the mid-40 day range, where it has remained. As we enter
December, I'll look to increase the fund's stake in variable rate
securities to help prepare the fund for the large inflows that typically
occur as the Florida intangible tax season approaches.
Q. HOW DID THE FUND PERFORM?
A. Better than the average tax-free money market fund. Spartan Florida
Municipal Money Market Fund's seven-day yield on November 30, 1996, was
3.18%, compared to 3.36% 12 months ago. That was the equivalent of a 4.97%
taxable rate of return for Florida investors in the 36% federal tax
bracket. Through November 30, 1996, the fund's 12-month total return was
3.17%, compared to 3.02 % for the all tax-free money market funds average
tracked by IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I believe that the Fed will wait until it can evaluate data from the
fourth quarter of this year before taking action, if any. If the economy
shows robust signs of strengthening, the market might anticipate a round of
Fed tightening. If we see weakness, then we might start talking about an
easing of interest rates. For now, I'll keep the fund positioned flexibly,
until we see signs of Fed movement one way or the other.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current
tax-free income and exemption
from the Florida intangible tax
by normally investing in
investment-grade municipal
securities
TRADING SYMBOL: FFLIX
FUND NUMBER: 427
START DATE: March 16, 1992
SIZE: as of November 30,
1996, more than $391 million
MANAGER: Jonathan Short,
since May 1996; manager,
Fidelity California Municipal
Income Fund; Fidelity
California Insured Municipal
Income, Fidelity Minnesota
Municipal Income, Spartan
Arizona Municipal Income,
Spartan California Municipal
Income and Spartan
California Intermediate
Municipal Income funds,
since 1995; Fidelity Advisor
California Municipal Income
Fund, since February 1996;
joined Fidelity in 1990
(checkmark)
JON SHORT ON THE FLORIDA
ECONOMY:
"Florida's economy
continues to expand at a
healthy pace, a
continuation of a trend we've
seen since the early 1990s.
The state's economic growth
has been fueled by gains in
the service sector and strong
population growth. Looking
ahead, a national economic
slowdown could translate
into a much slower Florida
economy. But, I expect
Florida's rate of growth to
outpace that of the nation.
Since Florida levies no
personal income tax, the
state's revenues are more
dependent than other states
on its sales tax, which makes
tourism very important to the
state's economy. However,
tourism currently is quite
strong and vibrant."
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/96 5/31/96 11/30/95
0 - 30 75 75 71
31 - 90 9 10 12
91 - 180 6 13 4
181 - 397 10 2 13
WEIGHTED AVERAGE MATURITY
11/30/96 5/31/96 11/30/95
Spartan Florida Municipal
Money Market Fund 46 days 36 days 52 days
All Tax-Free Money Market
Funds Average* 52 days 42 days 49 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Row: 1, Col: 1, Value: 60.0
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 1, Value: 56.0
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 17.0
Row: 1, Col: 5, Value: 7.0
Variable rate
demand notes
(VRDNs) 60%
Commercial
paper 20%
Tender bonds 8%
Municipal
notes 9%
Other 3%
Variable rate
demand notes
(VRDNs) 56%
Commercial
paper 11%
Tender bonds 9%
Municipal
notes 17%
Other 7%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - 100%
Alachua County Health Facs. Auth. Rev.:
Bonds (Academic Research Bldg. Proj./Florida Clinic)
Series 1989, 3.80%, tender 12/6/96, LOC Barnett
Bank Nat'l. Assoc. $ 6,250,000 $ 6,250,000
(Shands Teaching Hosp.) Series 1996 B, 3.50%
(MBIA Insured) (BPA SunTrust Bank, Central
Florida, NA) VRDN 2,000,000 2,000,000
Arcadia Hosp. Rev. (Desoto Memorial Hosp.) Series 1994,
3.60%, LOC First Union Nat'l. Bank of Florida, VRDN 4,615,000 4,615,000
Brevard County School Dist. TAN 4.20% 6/30/97 10,000,000 10,029,913
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev., VRDN:
Rfdg. (Jacaranda Village Apts. Proj.) 3.45%,
LOC Marine Midland Bank 2,700,000 2,700,000
(Landings Inverrary) 3.65%, LOC PNC Bank 1,900,000 1,900,000
(Palm Aire-Oxford Proj.) Series 1990, 3.80%
(Continental Casualty Co. Guaranteed) 1,800,000 1,800,000
(Sanctuary Apts. Proj.) Series 1985, 3.65%,
LOC PNC Bank 500,000 500,000
(Town of Jacaranda) 3.60%,
LOC SouthTrust Bank of Alabama 7,400,000 7,400,000
Broward County Ind. Dev. Auth. Rev., VRDN (b):
Rfdg. (Goldline Lab., Inc. Proj.) Series 1989 B, 3.40%,
LOC Barnett Bank Nat'l. Assoc. 710,000 710,000
(Heico Aerospace Corp. Proj.) 3.65%,
LOC SunTrust Bank, South Florida, NA 1,000,000 1,000,000
Clay County Hsg. Fin. Auth. Participating VRDN, Series PT-61,
3.70%, LOC Bayerische Hypotheken-und Weschel (b)(c) 4,950,000 4,950,000
Dade County Capital Asset Allocation Spl. Oblig. Rev.
Series 1990, 3.85%, LOC Sanwa Bank Ltd., VRDN 1,300,000 1,300,000
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Children's Hosp. Proj.) 3.50% (AMBAC Insured)
(BPA SunTrust Bank, Miami, NA) VRDN 800,000 800,000
Dade County Hsg. Fin. Auth. Single-Family Mtg. Rev. Bonds:
Series 1995 B, 3.70%, tender 12/5/96 (Liquidity Facility
Bank of America NT & SA) (c)(d) 12,500,000 12,500,000
4%, tender 10/1/97 (FGIC Capital Markets Guaranteed) (b) 5,000,000
5,000,000
Dade County Ind. Dev. Auth. Ind. Dev. Rev.
(Royal Store Fixtures Corp. Proj.) 3.65%,
LOC SunTrust Bank, Miami, NA, VRDN (b) 2,260,000 2,260,000
Dade County Ind. Dev. Auth. Rev., VRDN:
(Dolphins Stadium Proj.) Series 1985 D, 3.60%,
LOC Societe Generale, France 1,000,000 1,000,000
(Florida Pwr. & Lt. Co. Proj.) Series 1993, 4.15% 1,700,000 1,700,000
(Guastafeste Proj.) (b):
Series 1987, 3.65%, LOC SunTrust Bank, Miami, NA 1,005,000 1,005,000
Series 1991, 3.65%, LOC SunTrust Bank, Miami, NA 535,000 535,000
Dade County Multi-Family Hsg. Rev. (Biscayne View Apts. Proj.)
Series 1993, 3.85% (Commonwealth Life
Insurance Co. Guaranteed) VRDN (b) 27,000,000 27,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev. Participating VRDN,
Series SG-74, 3.65% (Liquidity Facility Societe
Generale, France) (c) $ 9,845,000 $ 9,845,000
Duval County Multi-Family Hsg. Fin. Auth. Rev. (Lakes of
Mayport Apts.) Series 1985 F, 3.60%,
LOC SunTrust Bank, Atlanta, VRDN 1,300,000 1,300,000
Escambia County Poll. Cont. Rev. Rfdg. (Monsanto Co. Proj.)
Series 1994, 3.55%, VRDN 3,775,000 3,775,000
Escambia County Solid Waste Disp. Rev. (Monsanto Co. Proj.)
Series 1993, 3.70%, VRDN (b) 5,300,000 5,300,000
Florida Board of Ed. Participating VRDN, Series 1995 A, 3.70%
(Liquidity Facility Citibank, NA) (c) 9,500,000 9,500,000
Florida Dept. Gen. Svcs. Rev. Bonds (Environmental
Protection Preservation) Series 1995 A, 5% 7/1/97
(AMBAC Insured) 3,310,000 3,337,686
Florida Dept. of Trans. Participating VRDN, 3.60%
(Liquidity Facility Societe Generale, France) (c) 11,310,000 11,310,000
Florida Hsg. Fin. Agcy. Multi-Family Hsg. Rev., VRDN:
Rfdg. (Hillsborough-Oxford Proj.) Series D, 3.80%
(Continental Casualty Insurance Co. Guaranteed) 5,590,000 5,590,000
Rfdg. (Brandon-Oxford Proj.) Series 1990 C, 3.80%
(Continental Casualty Insurance Co. Guaranteed) 7,200,000 7,200,000
(Sun Pointe Cove Apts. Proj.) Series 1985 XX, 3.60%
(FNMA Guaranteed) 3,500,000 3,500,000
Florida Hsg. Fin. Agcy. Rev. (Banyan Bay Apts. Proj.) 3.85%,
LOC PNC Bank, Kentucky, VRDN (b) 5,275,000 5,275,000
Florida Local Gov't. Fin. Auth. (Lake Wales Medical
Centers Inc. Proj.) Series 1994 A, 3.60%,
LOC First Union Nat'l. Bank of Florida, VRDN 4,458,000 4,458,000
Florida Local Gov't. Fin. Commission Series A, CP:
3.60% 1/15/97, LOC First Union Nat'l. Bank of Florida 5,500,000
5,500,000
3.55% 2/7/97, LOC First Union Nat'l. Bank of Florida 2,000,000
2,000,000
3.65% 2/25/97, LOC First Union Nat'l. Bank of Florida 1,500,000
1,500,000
3.65% 2/26/97, LOC First Union Nat'l. Bank of Florida 5,000,000
5,000,000
3.55% 2/27/97, LOC First Union Nat'l. Bank of Florida 1,948,265
1,948,265
Florida State Board of Ed. Bonds Series B, 5.30% 6/1/97 2,750,000
2,770,967
Florida State Dept. of Trans. Bonds 6.875% 7/1/97 2,265,000 2,305,015
Gulf Breeze Rev. Series 1995 A, 3.60%,
LOC Barnett Bank Nat'l. Assoc., VRDN 10,000,000 10,000,000
Highlands County Health Facs. Auth. Rev.
(Adventist Health/Sunbelt) 3.55% (Capital Markets Assurance
Corp. Insured) (BPA First Nat'l. Bank of Chicago) VRDN 8,000,000
8,000,000
Hillsborough County Aviation Auth.
(Tampa Int'l. Arpt.) 3.60% 12/6/96,
LOC Nat'l. Westminster Bank PLC, UK, CP (b) 7,500,000 7,500,000
Hillsborough County Ind. Dev. Auth. Poll. Cont. Rev. Rfdg., VRDN:
(Tampa Elec. Co. Proj.) Series 1990, 4.15% 4,600,000 4,600,000
(Tampa Elec. Co./Gann Coal Proj.) Series 1992, 4.10% 1,300,000
1,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Hillsborough County Ind. Dev. Rev. (Vigo Importing Proj.)
VRDN (b):
3.75%, LOC NationsBank, NA (South) $ 1,505,000 $ 1,505,000
3.85%, LOC Barnett Bank Nat'l. Assoc. 1,400,000 1,400,000
Indian River County Hosp. Dist. Hosp. Rev. Bonds:
Series 1988:
3.65%, tender 12/11/96, LOC Kredietbank, NV 2,600,000 2,600,000
3.70%, tender 12/12/96, LOC Kredietbank, NV 4,350,000 4,350,000
3.55%, tender 3/10/97, LOC Kredietbank, NV 1,600,000 1,600,000
3.60%, tender 3/10/97, LOC Kredietbank, NV 1,100,000 1,100,000
Series 1989, 3.60%, tender 3/10/97,
LOC Kredietbank, NV 4,300,000 4,300,000
Series 1990, 3.65%, tender 12/11/96,
LOC Kredietbank, NV 2,000,000 2,000,000
Indian River County Hosp. Dist. Hosp. Rev. Rfdg. Series 1985,
3.55%, LOC Kredietbank, NV, VRDN 3,000,000 3,000,000
Indian Trace Commty. Dev. Dist. Rev. (Broward County Basin I
Wtr. Mgmt. Spl. Benefit Board.) 3.45% (MBIA Insured)
(BPA Swiss Bank Corp.) VRDN 1,100,000 1,100,000
Jacksonville Elec. Auth., CP:
Series A, 3.70% 12/9/96 (Liquidity Facility Morgan
Guaranty Trust Co., NY) 1,000,000 1,000,000
Series C-1, 3.55% 2/14/97 (BPA Morgan Guaranty
Trust Co., NY) 10,000,000 10,000,000
Jacksonville Elec. Auth. Participating VRDN, Series PA-1008,
3.55% (Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,460,000
3,460,000
Jacksonville Health Facs. Rev. (Faculty Practice Assoc.)
3.60%, LOC NationsBank, NA, VRDN 2,000,000 2,000,000
Jacksonville Hosp. Rev. (Baptist Med. Ctr. Proj.) VRDN:
Series 1984, 3.50%, LOC First Union Nat'l. Bank of NC 3,000,000
3,000,000
Series 1989, 3.60%, LOC First Union Nat'l. Bank of NC 1,000,000
1,000,000
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation Proj.)
Series 1987, 3.75%,
LOC Barnett Bank Nat'l. Assoc., VRDN 4,900,000 4,900,000
Jacksonville Poll. Cont. Rev. Rfdg. (Florida Pwr. & Lt. Co.)
Series 1995, 4.10%, VRDN 1,700,000 1,700,000
Jacksonville (River City Renaissance Prog.)
3.50% 12/6/96, CP 7,000,000 7,000,000
Lee County Ind. Dev. Auth. Ind. Dev. Rev. (Baader North
America Corp. Proj.) Series 1994, 3.55%,
LOC Deutsche Bank, Germany, VRDN (b) 2,200,000 2,200,000
Liberty County Ind. Dev. Rev. (Timber Energy
Resources Inc. Proj.) Series 1994, 3.60%,
LOC Bank of Montreal, VRDN 7,400,000 7,400,000
Manatee County Hsg. Fin. Auth. (Harbor Pointe Proj.)
Series 1990 A, 3.95%,
LOC Marine Midland Bank, NA, VRDN 1,000,000 1,000,000
Martin County Poll. Cont. Rev. (Florida Pwr. & Lt. Co.)
Series 1994, 4.10%, VRDN 600,000 600,000
Monroe County School Dist. RAN 4% 12/13/96 2,000,000 2,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Naples Hosp. Rev. (Naples Commty. Hosp. Proj.)
Series 1992, 3.65%, LOC Mellon Bank, NA, VRDN $ 2,350,000 $ 2,350,000
Okeechobee County Solid Waste Rev.
(Chambers Waste Sys.) Series 1992, 3.85%,
LOC Morgan Guaranty Trust, NY, VRDN (b) 9,900,000 9,900,000
Orange County Health Facs. Auth.
Participating VRDN, Series PA-95, 3.65%
(Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,985,000 3,985,000
Orange County Health Facs. Rev. (Adventist Health Sys.)
3.45%, LOC Rabobank Nederland, NV, VRDN 12,500,000 12,500,000
Orange County Ind. Dev. Board (Central Florida Blood
Bank Proj.) Series 1988, 3.55%, LOC SunTrust Bank,
Central Florida, NA, VRDN 1,145,000 1,145,000
Orange County School Dist. TAN 4% 9/15/97 10,000,000 10,036,376
Orlando Util. Commission Wtr. & Elec. Participating VRDN,
Series SG-18, 3.60% (Liquidity Facility
Societe Generale, France) (c) 4,365,000 4,365,000
Orlando Util. Commission Wtr. & Elec. Rev.
Bonds 6% 4/1/97 2,000,000 2,014,980
Palm Beach County Health Facs. Auth. Bonds
(Pooled Hospital Loan Prog.) 3.60%, tender 1/6/97
(MBIA Insured) (Liquidity Facility Credit Suisse, Switzerland) 2,000,000
2,000,000
Palm Beach County Rev. (Norton Gallery & School of Art)
3.55%, LOC Northern Trust Co., VRDN 2,700,000 2,700,000
Palm Beach County School Dist. TAN Series 1996,
4.50% 9/26/97 5,250,000 5,276,991
Pensacola Rev. (Harborview Corp. Proj.) 3.65%,
LOC AmSouth Bank, NA, AL, VRDN 2,920,000 2,920,000
Pinellas Capital Impt. Bonds 5.40% 10/1/97 2,820,000 2,861,149
Pinellas County Health Facs. Auth. Rev. (Pooled Hosp.
Loan Prog.) 4%, LOC Chase Manhattan Bank, VRDN 2,400,000 2,400,000
Plant City (South Baptist Hosp. Proj.) Series 1993, 3.70%,
LOC Barnett Bank, Nat'l. Assoc., VRDN (b) 4,700,000 4,700,000
Putnam County Dev. Auth. Bonds (Seminole Elec.
Coop. Proj.) Series 1984 H-3, 3.80%, tender 3/15/97
(Nat'l. Rural Util. Coop. Fin. Corp. Guaranteed) 13,000,000 13,000,000
Sarasota County Pub. Hosp. Dist. Bonds (Sarasota
Memorial Hosp.) Series 1991, 3.70%, tender 12/10/96
(Liquidity Facility Goldman Sachs & Co.) 4,000,000 4,000,000
Seminole County School Dist. RAN 3.50% 2/19/97 6,500,000 6,503,704
Sunshine State Governmental Fing. Commission:
Bonds Series 1986:
3.70%, tender 12/9/96 3,200,000 3,200,000
3.70%, tender 12/10/96 4,000,000 4,000,000
Series 1994, 3.55% 3/19/97, CP 1,000,000 1,000,000
TOTAL INVESTMENTS - 100% $ 390,843,046
Total Cost for Income Tax Purposes $ 390,843,046
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
4. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Dade County Hsg.
Fin. Auth. Single
Family Mtg. Rev.
Bonds Series 1995 B 10/1/96 $ 12,500,000
INCOME TAX INFORMATION
At November 30, 1996, the fund had a capital loss carryforward of
approximately $37,100 of which $100, $1,000, $22,000, $4,000, and $10,000
will expire on November 30, 2000, 2001, 2002, 2003 and 2004, respectively.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 28.56% of the fund's income dividends was
subject to the federal alternative minimum tax.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
5.ASSETS 6. 7.
8.Investment in securities, at value - 9. $ 390,843,046
See accompanying schedule
10.Cash 11. 125,892
12.Share transactions in process 13. 9,241,390
14.Interest receivable 15. 2,288,314
16.Other receivables 17. 36,453
18. 19.TOTAL ASSETS 20. 402,535,095
21.LIABILITIES 22. 23.
24.Distributions payable $ 108,393 25.
26.Accrued management fee 149,111 27.
28. 29.TOTAL LIABILITIES 30. 257,504
31.32.NET ASSETS 33. $ 402,277,591
34.Net Assets consist of: 35. 36.
37.Paid in capital 38. $ 402,314,700
39.Accumulated net realized gain (loss) on investments 40. (37,109)
41.42.NET ASSETS, for 402,314,700 shares outstanding 43. $ 402,277,591
44.45.NET ASSET VALUE, offering price and redemption 46. $1.00
price per share ($402,277,591 (divided by) 402,314,700 shares)
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
47.48.INTEREST INCOME 49. $ 14,185,318
50.EXPENSES 51. 52.
53.Management fee $ 1,956,849 54.
55.Non-interested trustees' compensation 1,594 56.
57. Total expenses before reductions 1,958,443 58.
59. Expense reductions (115,316) 1,843,127
60.61.NET INTEREST INCOME 62. 12,342,191
63.64.NET REALIZED GAIN (LOSS) ON INVESTMENTS 65. (9,713)
66.67.NET INCREASE IN NET ASSETS RESULTING FROM 68. $ 12,332,478
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
69. YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
70.INCREASE (DECREASE) IN NET ASSETS
71.Operations $ 12,342,191 $ 13,518,304
Net interest income
72. Net realized gain (loss) (9,713) (4,277)
73. 74.NET INCREASE (DECREASE) IN NET ASSETS 12,332,478 13,514,027
RESULTING
FROM OPERATIONS
75.Distributions to shareholders from net interest (12,342,191) (13,518,304)
income
76.Share transactions at net asset value of $1.00 per 705,315,091 629,995,039
share
Proceeds from sales of shares
77. Reinvestment of distributions from net interest 11,594,514 12,616,815
income
78. Cost of shares redeemed (678,018,565) (616,740,964)
79.80. 38,891,040 25,870,890
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES
RESULTING FROM SHARE TRANSACTIONS
81. 82.TOTAL INCREASE (DECREASE) IN NET ASSETS 38,881,327 25,866,613
83.NET ASSETS 84. 85.
86. Beginning of period 363,396,264 337,529,651
87. End of period $ 402,277,591 $ 363,396,264
</TABLE>
FINANCIAL HIGHLIGHTS
88. 89. AUGUST 24, 1992
YEARS ENDED NOVEMBER 30, (COMMENCEMEN
T OF OPERATIONS)
TO NOVEMBER
30,
90. 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
91.SELECTED PER-SHARE
DATA
92.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning
of period
93.Income from Investment .031 .035 .024 .025 .008
Operations
Net interest income
94.Less Distributions
95. From net interest income (.031) (.035) (.024) (.025) (.008)
96.Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
97.TOTAL RETURN B 3.17% 3.57% 2.47% 2.51% .78%
98.RATIOS AND
SUPPLEMENTAL DATA
99.Net assets, end of period $ 402,278 $ 363,396 $ 337,530 $ 306,741 $ 49,467
(000 omitted)
100.Ratio of expenses to .50% .50% .46% .18% .00%
average C C C
net assets
101.Ratio of expenses to .47% .50% .46% .18% .00%
average net assets after D
expense reductions
102.Ratio of net interest 3.15% 3.52% 2.43% 2.48% 2.91%
income to average net A
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Florida Municipal Income Fund (the income fund)(formerly Spartan
Florida Municipal Income Portfolio) is a fund of Fidelity Court Street
Trust. Spartan Florida Municipal Money Market Fund (the money market
fund)(formerly Spartan Florida Municipal Money Market Portfolio) is a fund
of Fidelity Court Street Trust II. Each trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company. Fidelity Court Street Trust and Fidelity
Court Street Trust II (the trusts) are organized as a Massachusetts
business trust and a Delaware business trust, respectively. Each fund is
authorized to issue an unlimited number of shares. The financial statements
have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the income fund and the
money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. 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, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each 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. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for market
discount, capital loss carryforwards and losses deferred due to futures and
options. The income fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the pershare allocation between net investment income and realized
and unrealized gain (loss). Any taxable gain remaining at fiscal year end
is distributed in the following year.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS. The income fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value of any open futures contracts at period
end, is shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the underlying
instrument at period end. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Futures contracts are valued at the settlement price established
each day by the board of trade or exchange on which they are traded.
RESTRICTED SECURITIES. The funds are permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES - CONTINUED
(excluding 144A issues) amounted to $12,500,000 or 3.1% of net assets for
the money market fund. The income fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $105,301,927 and $114,436,039, respectively.
The market value of futures contracts opened and closed during the period
amounted to $48,172,144 and $46,704,982, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% and .50% of average net assets
for the income and money market funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$2,805 and $5,253 for the income and money market funds, respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fees are paid prior to any
voluntary expense reimbursements which may be in effect.
5. EXPENSE REDUCTIONS.
In addition, FMR has entered into arrangements on behalf of each fund with
its custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the income and money market fund's expenses were reduced by $52,507
and $115,316, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court Street
Trust II and the Shareholders of Spartan Florida Municipal Income Fund and
Spartan Florida Municipal Money Market Fund:
We have audited the accompanying statements of assets and liabilities of
Fidelity Court Street Trust: Spartan Florida Municipal Income Fund
(formerly Spartan Florida Municipal Income Portfolio) and Fidelity Court
Street Trust II: Spartan Florida Municipal Money Market Fund (formerly
Spartan Florida Municipal Money Market Portfolio), including the schedules
of portfolio investments, as of November 30, 1996 and the related
statements of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the four years in the period then ended
and the period from March 16, 1992 (commencement of operations) to November
30, 1992 for the Spartan Florida Municipal Income Fund, and for each of the
four years in the period then ended and the period from August 24, 1992
(commencement of operations) to November 30, 1992 for the Spartan Florida
Municipal Money Market Fund. These financial statements and financial
highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan Florida Municipal Income Fund and Spartan Florida Municipal
Money Market Fund as of November 30, 1996, the results of their operations
for the year then ended, the changes in their net assets for each of the
two years in the period then ended, and the financial highlights for each
of the four years in the period then ended and the period from March 16,
1992 (commencement of operations) to November 30, 1992 for the Spartan
Florida Municipal Income Fund, and for each of the four years in the period
then ended and the period from August 24, 1992 (commencement of operations)
to November 30, 1992 for the Spartan Florida Municipal Money Market Fund,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Jr., Vice President -
INCOME FUND
Sarah H. Zenoble, Vice President - MONEY MARKET FUND
Janice S. Bradburn, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer - MONEY MARKET FUND
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*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY CONNECTICUT
MUNICIPAL MONEY MARKET
FUND
(registered trademark)
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
CHECK PAGE NUMBERS !!!
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of 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
values.
FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 19 Notes to the financial statements.
REPORT OF INDEPENDENT
ACCOUNTANTS 21 The auditor's opinion.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by
investing in a number of different stock funds, or in different investment
categories, such as bonds. You should also keep money you'll need in the
near future in a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
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 reimbursed certain fund expenses during the periods shown,
the past five years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity Connecticut Municipal 2.98% 13.76% 27.80%
Money Market Fund
Connecticut Tax-Free 2.85% 13.57% 25.13%
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or since the fund
started on August 29, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the Connecticut tax-free money market funds
average, which reflects the performance of 10 funds with similar objectives
tracked by IBC Financial Data, Inc. over the past 12 months. (The periods
covered by IBC Financial Data, Inc. numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity Connecticut Municipal 2.98% 2.61% 3.43%
Money Market Fund
Connecticut Tax-Free 2.85% 2.58% 3.13%
Money Market Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/27/95 2/26/96 5/27/96 9/2/96 12/2/96
Fidelity Connecticut Municipa 3.23% 2.83% 3.17% 2.90% 2.99%
l
Money Market Fund
Connecticut Tax-Free 3.09% 2.67% 2.91% 2.70% 2.84%
Money Market Funds Averag
e
Fidelity Connecticut Municip 5.26% 4.61% 5.17% 4.72% 4.86%
al
Money Market Fund -
Tax-equivalent
Portion of fund's income 11.32% 10.70% 5.09% 8.99% 12.89%
subject to state taxes
</TABLE>
Fidelity Connecticut
Municipal Money
Market Fund
Connecticut
Tax-Free Money
Market Funds
Average
Row: 1, Col: 1, Value: 3.23
Row: 1, Col: 2, Value: 3.09
Row: 2, Col: 1, Value: 2.83
Row: 2, Col: 2, Value: 2.67
Row: 3, Col: 1, Value: 3.17
Row: 3, Col: 2, Value: 2.91
Row: 4, Col: 1, Value: 2.9
Row: 4, Col: 2, Value: 2.7
Row: 5, Col: 1, Value: 2.99
Row: 5, Col: 2, Value: 2.84
6% -
5% -
4% -
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 Connecticut tax-free money market funds average
as tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 38.88% and reflects that a portion of the
fund's income was subject to state taxes. A portion of the fund's income
may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes
reduce taxable returns.
Tax-equivalent yield - the
yield you'd have to earn on a
similar taxable investment to
match the tax-free yield -
makes the comparison more
meaningful. Keep in mind
that the U.S. Government
neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money
market fund will maintain a $1
share price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Deborah Watson became Portfolio Manager of Fidelity
Connecticut Municipal Money Market Fund on August 1, 1996.
Q. DEB, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST 12 MONTHS?
A. At the beginning of the period, most market participants expected the
Federal Reserve Board to continue lowering the rate banks charge each other
for overnight loans - known as the federal funds rate - due to a moderate
rate of growth in the economy and mild inflationary pressures. These
conditions helped to persuade the Fed to continue pursuing monetary policy
designed to stimulate economic growth. The Fed lowered the federal funds
rate one-quarter percentage point in December 1995 and again in January
1996, bringing the rate down to 5.25%. In mid-February, Fed Chairman Alan
Greenspan, testifying before Congress, surprised many by suggesting that
the economy was in no need of further stimulus. Greenspan's opinion was
reinforced dramatically in early March with the release of the February
employment report, which came in much higher than expected. Market
sentiment shifted and a sharp sell-off in the bond market ensued. Over the
past few months, however, signs of weakness in employment and a lack of
inflationary pressures in price indices have kept the Fed on the sidelines,
while the market has responded with lower rates.
Q. WHAT SORT OF STRATEGY DID THE FUND PURSUE THROUGH THIS CHANGING
ENVIRONMENT?
A. When the period began, the fund was well-positioned for a declining rate
environment with an average maturity of 62 days. Through the spring,
however, the maturity was allowed to roll down due to the expectation of
higher rates and thin supply. By July, the supply picture changed
dramatically and prices on money market instruments began to reflect
anticipated rate increases by the Fed. I added longer-term securities,
extending the fund's average maturity to 63 days. Since then, supply has
been constrained, but I've been able to keep the maturity in the 50-day
range, waiting for more concrete signals on the direction of the economy
and Fed policy.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1996, was 2.97%, compared to
3.21% 12 months earlier. The latest yield was the equivalent of a taxable
yield of 4.86% for Connecticut investors in the 38.88% combined federal and
state tax bracket. The fund's total return during the 12-month period was
2.98%. That beat the total return of 2.85% for the Connecticut tax-free
money market funds average, according to IBC Financial Data, Inc.
Q. WHAT DO YOU SEE HAPPENING OVER THE NEXT SIX MONTHS?
A. I anticipate the Fed will keep the fed funds rate stable at 5.25%
probably through the first quarter of 1997. Until then, the market will be
anxiously awaiting further signals on the economy as new data is released.
However, I believe it is more probable that the next move will be for the
Fed to raise the fed funds rate due to tightness in the labor market and
the possibility for wages to increase, among other factors. That said, I
expect to keep the average maturity fairly stable, in the 50-60 day range.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income and stability by
investing mainly in
high-quality, short-term
Connecticut municipal
money market securities
TRADING SYMBOL: FCMXX
FUND NUMBER: 418
START DATE: August 29, 1989
SIZE: as of November 30,
1996, more than $339 million
MANAGER: Deborah Watson,
since August 1996; manager,
various Fidelity and Spartan
state municipal money market
funds; joined Fidelity in 1982
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
usually long-term security that
gives the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/96 5/31/96 11/30/95
0 - 30 75 59 66
31 - 90 2 29 9
91 - 180 10 4 4
181 - 397 13 8 21
WEIGHTED AVERAGE MATURITY
11/30/96 5/31/96 11/30/95
Fidelity Connecticut
Municipal Money
Market Fund 50 days 45 days 62 days
Connecticut Tax-Free
Money Market Funds
Average* 57 days 27 days 58 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Row: 1, Col: 1, Value: 64.0
Row: 1, Col: 2, Value: 13.0
Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 6.0
Row: 1, Col: 5, Value: 5.0
Row: 1, Col: 1, Value: 53.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 16.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 8.0
Variable rate
demand notes
(VRDNs) 64%
Commercial
paper 13%
Tender bonds 12%
Municipal
notes 6%
Other 5%
Variable rate
demand notes
(VRDNs) 53%
Commercial
paper 15%
Tender bonds 16%
Municipal
notes 8%
Other 8%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ARIZONA - 0.8%
Coconino County Poll. Cont. Corp. Poll. Cont. Rev.
(Arizona Pub. Svc. Co. Navajo Proj.) Series 1994 A,
4.30%, LOC Bank of America, VRDN (b) $ 2,500,000 $ 2,500,000
CONNECTICUT - 74.7%
Connecticut Commission of Hsg. Multifamily Hsg. Rev. Bonds
(Town Colony Proj.) Series 1985, 4.60%, tender 4/1/97,
LOC Nat'l Australia Bank 865,000 867,358
Connecticut Dev. Auth. Health. Care Rev.
(Corp. for Independent Living Proj.)
Series 1990, 3.35%, LOC Chase Manhattan Bank, VRDN 15,295,000
15,295,000
Connecticut Dev. Auth. Ind. Dev. Rev., VRDN (b):
(Cap. Dist. Energy Ctr. Proj.):
Series 1986, 3.55%, LOC Bank of Nova Scotia 7,300,000 7,300,000
Series 1988, 3.55%, LOC Bank of Nova Scotia 100,000 100,000
(Lindenmaier Precision Co./Ohaus Proj.) Series 1988, 3.65%,
LOC Morgan Guaranty Trust, NY 8,000,000 8,000,000
(W.E. Bassett Co. Proj.) Series 1986, 4.10%,
LOC First Nat'l. Bank of Boston 1,200,000 1,200,000
Connecticut Dev. Auth. Poll. Cont. Rev. VRDN:
(Connecticut Lt. & Pwr. Co./Northeast Util. Proj.):
Series 1993 A, 3.50%, LOC Deutsche Bank, Germany 400,000 400,000
Series 1993 B, 3.60%,
LOC Union Bank of Switzerland (b) 21,000,000 21,000,000
Series 1996 A, 3.60%,
LOC Canadian Imperial Bank of Commerce (b) 10,600,000 10,600,000
(United Illuminating Co.) Series 1996, 3.50%,
LOC Union Bank of Switzerland 2,500,000 2,500,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev., VRDN (b):
(Exeter Energy Proj.) Series 1989 A, 3.55%,
LOC Sanwa Bank 1,500,000 1,500,000
(Rand-Whitney Containerboard)
3.30%, LOC Chase Manhattan Bank 6,700,000 6,700,000
Connecticut Dev. Auth. Wtr. Facs. Rev.
(Bridgeport Hydraulic Co.)
Series 1995, 3.25%, LOC Societe Generale, France, VRDN 6,900,000
6,900,000
Connecticut Gen. Oblig.:
Bonds:
Series 1996 A, 4% 5/15/97 3,000,000 3,005,263
4.75% 8/15/97 4,250,000 4,280,403
(Economic Recovery):
4.25% 12/15/96 6,000,000 6,001,174
4.75% 6/15/97 1,300,000 1,307,129
Participating VRDN, Series MGT-27, 3.45%,
(Liquidity Facility Morgan Guaranty Trust, NY) (c) 5,200,000 5,200,000
Connecticut Health & Ed. Facs. Auth. Rev.:
(Charlotte Hungerford Hosp.) Series B, 3.30%,
LOC Bank of Boston-Connecticut, VRDN 1,600,000 1,600,000
(Pomfret School Issue) Series A, 3.25%,
LOC Credit Local de France, VRDN 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. Rev.: - continued
Bonds:
(Yale Univ.):
Series L:
3.45%, tender 12/5/96 $ 3,550,000 $ 3,550,000
3.40%, tender 12/9/96 1,500,000 1,500,000
Series M, 3.45%, tender 12/5/96 4,400,000 4,400,000
Series N, 3.40%, tender 12/9/96 3,100,000 3,100,000
Series O:
3.35%, tender 12/6/96 4,700,000 4,700,000
3.45%, tender 4/7/97 8,400,000 8,400,000
Participating VRDN, Series BT-203,
3.65% (Liquidity Facility Bankers Trust Co.) (c) 5,200,000 5,200,000
Connecticut Hsg. Fin. Auth.:
(Hsg. Mtg. Fin. Prog.):
Bonds:
Series 1989 D (b):
3.55%, tender 12/6/96 1,500,000 1,500,000
3.50%, tender 2/6/97 500,000 500,000
3.60%, tender 3/11/97 6,700,000 6,700,000
Series 1996 A-3, 3.60%, tender 4/10/97 3,055,000 3,055,000
Series 1996 A-4, 3.65%, tender 4/10/97 (b) 6,400,000 6,400,000
Series 1995 G, 3.40% (AMBAC Insured)
(BPA Morgan Guaranty Trust, NY) VRDN 400,000 400,000
Participating VRDN, Series PT-81, 3.65%
(Liquidity Facility Rabobank Nederland, N.V.) (b)(c) 2,770,000
2,770,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Power Supply Sys.)
Series 1995 A, 3.40%, tender 1/29/97,
LOC Fleet National Bank, NA 400,000 400,000
Connecticut Participating VRDN,
Series 94-1, 3.55%
(Liquidity Facility State Street Bank & Trust Co.) (c) 10,156,998
10,156,998
Connecticut Second Lien Spl. Tax Oblig. Bonds
(Transport Infrastructure Purp.)
Series 1, 3.55%, LOC Commerzbank, Germany, VRDN 22,075,000 22,075,000
Connecticut Special Assessment Unemployment Compensation
Fdg. Rev. Bonds:
Series A, 4.20% 5/15/97 1,300,000 1,302,265
Series 1993 C, 3.90%, tender 7/1/97 (FGIC Insured)
(Liquidity Facility FGIC Security Purchase Inc.) 30,400,000 30,400,000
East Haven Gen. Oblig. BAN:
4% 9/3/97 1,300,000 1,301,419
4.25% 9/3/97 4,500,000 4,513,751
Guilford Gen. Oblig. BAN 4.25% 10/15/97 1,000,000 1,004,630
Hartford Redev. Auth. (Underwood Towers Proj.)
3.35% (FSA Insured) (BPA Barclays Bank PLC, UK) VRDN 2,000,000 2,000,000
Monroe BAN 4.10% 4/15/97 2,900,000 2,905,454
New Britain BAN 3.65% 4/15/97 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
New Haven Rev. (Starter Sportswear) Series 1986, 3.65%,
LOC Nat'l. Westminster Bank PLC, UK, VRDN (b) $ 2,600,000 $ 2,600,000
Stamford Hsg. Auth. Multimodal Rev. (Morgan Street Proj.)
Series 1994, 3.60%, LOC Deutsche Bank, Germany,
VRDN (b) 5,000,000 5,000,000
Windham BAN 3.50% 12/17/96 7,300,000 7,300,493
248,891,337
FLORIDA - 0.5%
Sunshine State Governmental Fing. Commission
3.60% 2/27/97, CP 1,600,000 1,600,000
GEORGIA - 0.5%
Burke County Poll. Cont. Rev. (Georgia Pwr. Co.)
Series 1994-4, 4.25%, VRDN (b) 800,000 800,000
Fulton County Multifamily Hsg. Rev.
(Greenhouse Holcomb Bridge Apt.) 3.65%,
(FNMA Guaranteed) VRDN 1,000,000 1,000,000
1,800,000
KENTUCKY - 0.9%
Daviess County Solid Waste Disp. Facs. Rev.
(Scott Paper Co.) VRDN (b):
Series 1993 B, 4.20%,
(Kimberly-Clarke Corp. Guaranteed) 2,200,000 2,200,000
Series 1994 A, 4.20% (Kimberly-Clark Corp. Guaranteed) 700,000
700,000
2,900,000
LOUISIANA - 2.5%
Calcasieu Parish Ind. Dev. Board Envir. Rev.
(Citgo Petroleum Corp.) 4.30%,
LOC Banque Nationale de Paris, VRDN (b) 1,200,000 1,200,000
Plaquemines Parish Envir. Rev. (BP Exploration & Oil, Inc.)
VRDN (b):
Rfdg. Series 1995, 4.30% 2,700,000 2,700,000
Series 1994, 4.30% 2,700,000 2,700,000
West Baton Rouge Parish Ind. Dist. #3 Rev.
(Dow Chemical Co. Proj.) VRDN (b):
Series 1993, 4.30% 500,000 500,000
Series 1995, 4.30% 1,100,000 1,100,000
8,200,000
MICHIGAN - 0.3%
Michigan Strategic Fund Bonds (Dow Chemical Co. Proj.)
Series 1986, 3.65%, tender 12/9/96 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEVADA - 0.6%
Washoe County Gas Fac. Rev. (Sierra Pacific Pwr. Co.)
Series 1990, 4.25%, LOC Union Bank of Switzerland,
VRDN (b) $ 2,000,000 $ 2,000,000
PENNSYLVANIA - 0.3%
Pennsylvania Higher Ed. Assistance Agcy. Student Loan Rev.,
Series 1994 A, 3.60%, LOC SLMA, VRDN (b) 1,100,000 1,100,000
PUERTO RICO - 13.2%
Puerto Rico Commonwealth Highway & Trans. Auth.
Participating VRDN, Series PA-114, 3.40%
(Liquidity Facility Merrill Lynch & Co.) (c) 7,900,000 7,900,000
Puerto Rico Commonwealth Pub. Impt. Participating VRDN (c):
Series BT-165, 3.55% (Liquidity Facility Bankers Trust Co.) 4,620,600
4,620,600
Series PA-97, 3.40%
(Liquidity Facility Merrill Lynch & Co.) 4,100,000 4,100,000
Series PT-63, 3.40%
(Liquidity Facility Bayerische Hypotheken-und Weschel) 8,600,000
8,600,000
Puerto Rico Elec. Pwr. Auth. Rev. Participating VRDN,
Series BT-105, 3.425%
(Liquidity Facility Bankers Trust Co.) (c) 13,158,000 13,158,000
Puerto Rico Gov't. Dev. Bank Rev. 3.20%,
LOC Credit Suisse, Switzerland, VRDN 3,000,000 3,000,000
Puerto Rico Ind. Med. Higher Ed. & Envir. Cont. Fac.
Fin. Auth Bonds (Inter. American Univ.) Series 1988,
3.50%, tender 2/6/97,
LOC Bank of Tokyo - Mitsubishi Ltd. 1,800,000 1,800,000
Puerto Rico Pub. Impt. Rfdg. Bonds Series 1987,
7.25%, Pre-Refunded to 7/1/97 800,000 833,055
44,011,655
SOUTH CAROLINA - 0.2%
South Carolina Jobs Econ. Dev. Auth. Rev. (Wellman Inc. Proj.)
Series 1991, 4.15%, LOC Wachovia Bank of NC, VRDN (b) 800,000 800,000
TEXAS - 4.3%
Brazos River Harbor Navigation Dist. of Brazoria County Rev.
(Dow Chemical Co. Proj.):
Bonds Series 1991, 3.75%, tender 12/12/96 1,000,000 1,000,000
VRDN (b):
Series 1992 A, 4.30% 2,300,000 2,300,000
Series 1993, 4.30% 2,900,000 2,900,000
Series 1996, 4.30% 1,700,000 1,700,000
Dallas Area Rapid Transit Sales Tax Rev. Series A, 3.60%
2/19/97, LOC Credit Suisse,
Switzerland/Swiss Bank Corp., CP 3,000,000 3,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
TEXAS - CONTINUED
Gulf Coast Ind. Dev. Auth. Solid Waste Disp. Rev.
(Citgo Petroleum)
4.30%, LOC Wachovia Bank of GA, VRDN (b) $ 1,900,000 $ 1,900,000
Trinity River Auth. Poll. Cont. Rev. (Texas Util. Elec. Co. Proj.)
Series 1996 A, 4.25% (AMBAC Insured)
(BPA Bank of New York, NY) VRDN (b) 1,400,000 1,400,000
14,200,000
VIRGINIA - 0.4%
Campbell County Ind. Dev. Auth. Facs. Rev.
(Hadson Pwr. 12-Altavista Proj.)
Series 1990 A, 4.15%,
LOC Barclays Bank PLC, UK, VRDN (b) 1,000,000 1,000,000
King George County Ind. Dev. Auth. Rev.
(Birchwood Pwr. Partners) Series 1996A, 4.30%,
LOC Credit Swiss, Switzerland, VRDN (b) 300,000 300,000
1,300,000
WASHINGTON - 0.4%
Washington Hsg. Fin. Commission Multifamily Mtg. Rev.
(Canyon Lake II)
4.15%, LOC U.S. Bank of Washington, VRDN (b) 1,300,000 1,300,000
WEST VIRGINIA - 0.4%
Marion County Solid Waste Disp. Rev.
(Grant Town Cogeneration Proj.) Series 1990 B, 3.60%,
LOC Nat'l. Westminster Bank PLC, UK, VRDN (b) 1,500,000 1,500,000
TOTAL INVESTMENTS - 100% $ 333,102,992
Total Cost for Income Tax Purposes $ 333,102,992
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1996 the fund had a capital loss carryforward of
approximately $11,000 of which $8,100 and $2,900 will expire on November
30, 2002 and 2003 respectively.
During fiscal year ended 1996, 100% of the fund's income dividends was free
from federal income tax, and 34.11% of the fund's income dividends was
subject to the federal alternative minimum tax.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value - $ 333,102,992
See accompanying schedule
Cash 4,110,458
Interest receivable 2,497,118
TOTAL ASSETS 339,710,568
LIABILITIES
Distributions payable $ 36,127
Accrued management fee 106,617
Other payables and accrued expenses 80,584
TOTAL LIABILITIES 223,328
NET ASSETS $ 339,487,240
Net Assets consist of:
Paid in capital $ 339,498,129
Accumulated net realized gain (loss) on investments (10,889)
NET ASSETS, for 339,498,129 shares outstanding $ 339,487,240
NET ASSET VALUE, offering price and redemption price per $1.00
share ($339,487,240 (divided by) 339,498,129 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1996
INTEREST INCOME $ 11,605,253
EXPENSES
Management fee $ 1,308,203
Transfer agent, accounting and custodian fees 599,610
and expenses
Non-interested trustees' compensation 2,266
Registration fees 19,397
Audit 22,307
Total expenses before reductions 1,951,783
Expense reductions (47,352) 1,904,431
NET INTEREST INCOME 9,700,822
NET GAIN (LOSS) 18,636
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,719,458
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 9,700,822 $ 10,252,453
Net interest income
Net realized gain (loss) 18,636 (2,885)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 9,719,458 10,249,568
FROM OPERATIONS
Distributions to shareholders from net interest income (9,700,822) (10,252,453)
Share transactions at net asset value of $1.00 per share 835,399,593 718,824,759
Proceeds from sales of shares
Reinvestment of distributions from net interest income 9,314,495 9,814,514
Cost of shares redeemed (827,115,296) (707,651,485)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 17,598,792 20,987,788
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,617,428 20,984,903
NET ASSETS
Beginning of period 321,869,812 300,884,909
End of period $ 339,487,240 $ 321,869,812
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .029 .032 .022 .019 .027
Operations
Net interest income
Less Distributions
From net interest income (.029) (.032) (.022) (.019) (.027)
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN A 2.98% 3.29% 2.19% 1.87% 2.74%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 339,487 $ 321,870 $ 300,885 $ 288,566 $ 331,909
(000 omitted)
Ratio of expenses to .59% .61% .60% .61% .43% B
average net assets
Ratio of expenses to .58% .61% .60% .61% .43%
average net assets after C
expense reductions
Ratio of net interest income 2.93% 3.24% 2.16% 1.87% 2.76%
to average net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 3 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Connecticut Municipal Money Market Fund (the fund) (formerly
Fidelity Connecticut Municipal Money Market Portfolio) 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 financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly fee that is calculated on the
basis of a group fee rate plus a fixed individual fund fee rate applied to
the average net assets of the fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .25%. For the period, the management
fee was equivalent to an annual rate of .40% of the fund's average net
assets.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
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 its 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 $2,011 for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the fund. UMB 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 account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. The accounting
fee is based on the level of average net assets for the month plus
out-of-pocket expenses. For the period, FSC received transfer agent and
accounting fees amounting to $511,259 and $67,611, respectively.
For the period, the transfer agent fees were equivalent to an annual rate
of .16% of the fund's average net assets.
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 $22,600.
3. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its transfer agent whereby
interest earned on uninvested cash balances was used to offset a portion of
the fund's expenses. During the period, the fund's transfer agent fees were
reduced by $47,352 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust II and Shareholders of
Fidelity Connecticut Municipal Money Market Fund
We have audited the accompanying statement of assets and liabilities of
Fidelity Court Street Trust II: Fidelity Connecticut Municipal Money Market
Fund (formerly Fidelity Connecticut Municipal Money Market Portfolio)
including the schedule of portfolio investments, as of November 30, 1996,
and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Connecticut Municipal Money Market Fund as of November 30,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
January 3, 1997
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Sarah H. Zenoble, Vice President
Deborah F. Watson, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
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*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S MUNICIPAL
MONEY MARKET FUNDS
California Municipal Money Market
Connecticut Municipal Money Market
Massachusetts Municipal Money Market
Michigan Municipal Money Market
New Jersey Municipal Money Market
New York Municipal Money Market
Ohio Municipal Money Market
Spartan(registered trademark) Arizona Municipal
Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Fidelity Municipal Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY
(registered trademark)
NEW JERSEY
MUNICIPAL
MONEY MARKET
FUND
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of 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
values.
FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 19 Notes to the financial statements.
REPORT OF INDEPENDENT 21 The auditors' opinion.
ACCOUNTANTS
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by
investing in a number of different stock funds, or in different investment
categories, such as bonds. You should also keep money you'll need in the
near future in a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
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 reimbursed certain fund expenses during the periods shown,
the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity New Jersey Municipal 2.93% 13.90% 38.70%
Money Market Fund
New Jersey Tax-Free Money Market 2.85% 13.87% n/a
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the New Jersey tax-free money market funds
average, which reflects the performance of 11 New Jersey tax-free money
market funds with similar objectives tracked by IBC Financial Data, Inc.
over the past 12 months. (The periods covered by IBC Financial Data, Inc.
numbers are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity New Jersey Municipal 2.93% 2.64% 3.83%
Money Market Fund
New Jersey Tax-Free Money Market 2.85% 2.63% n/a
Funds Average
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YIELDS
11/27/95 2/26/96 5/27/96 9/2/96 12/2/96
Fidelity New Jersey Municipa 3.17% 2.73% 3.10% 2.88% 2.88%
l
Money Market Fund
New Jersey Tax-Free 3.16% 2.68% 3.03% 2.81% 2.92%
Money Market Funds
Average
Fidelity New Jersey Municip 5.29% 4.56% 5.17% 4.81% 4.81%
al
Money Market Fund -
Tax-equivalent
</TABLE>
Row: 1, Col: 1, Value: 3.17
Row: 1, Col: 2, Value: 3.16
Row: 2, Col: 1, Value: 2.73
Row: 2, Col: 2, Value: 2.68
Row: 3, Col: 1, Value: 3.1
Row: 3, Col: 2, Value: 3.03
Row: 4, Col: 1, Value: 2.88
Row: 4, Col: 2, Value: 2.81
Row: 5, Col: 1, Value: 2.88
Row: 5, Col: 2, Value: 2.92
Fidelity New Jersey
Municipal Money
Market Fund
New Jersey Tax-Free
Money Market
Funds Average
4% -
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 New Jersey tax-free money market funds average.
Or you can look at the fund's tax-equivalent yield, which is based on a
combined effective 1996 federal and state income tax rate of 40.08%. A
portion of the fund's income may be subject to the alternative minimum tax.
Figures for the New Jersey tax-free money market funds average are from IBC
Financial Data, Inc.
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
NOTE TO SHAREHOLDERS: Jan Bradburn became Portfolio Manager of Fidelity New
Jersey Municipal Money Market Fund on August 1, 1996.
Q. JAN, WHAT HAS THE INVESTMENT CLIMATE BEEN LIKE OVER THE PAST YEAR?
A. At the beginning of 1996, the Federal Reserve Board was in the process
of lowering the interest rate banks charge each other - known as the
federal funds rate - in order to stimulate the economy, and the market was
anticipating that the Fed would continue to do so. Market sentiment changed
rapidly, however, when Federal Reserve Board Chairman Alan Greenspan, in
his testimony before Congress, was surprisingly optimistic about the
underlying strength of the economy. Then the February employment report
showed the economy was generating new jobs at a faster rate than expected.
A dramatic sell-off and sharply rising interest rates ensued. Over the
summer, the Treasury market tended to trade within a narrow range, heading
down just before the release of economic data - fearing that signs of
economic strength would lead to Fed rate increases - then back up when the
numbers came out and weren't as strong as anticipated. While the economy
was expanding at a strong pace, the Fed stayed on the sidelines waiting for
the slowdown it forecast to take shape. As we moved into the fall, consumer
spending slowed, and it became evident to many in the market that the Fed
would stand pat for the foreseeable future.
Q. DID THE MUNICIPAL MARKETS MIRROR THE TREASURY MARKET OVER THE SUMMER?
A. They did for the most part, although the municipal markets have to
contend with the technical pressures of supply and demand. For example,
many authorities in New Jersey issue a large percentage of their debt in
the summer. As a result, we had a great opportunity in the summer to lock
in favorable rates.
Q. HOW DID YOU RESPOND TO THE CONDITIONS POSED BY THE MARKET?
A. Early in the 12-month period through the first quarter of 1996, the
fund's average maturity was in the mid 60-day range, as there were
opportunities to lock in attractive yields. That period was followed by one
with limited supply, so the fund's maturity drifted down to about 50 days
as many of its holdings matured. In July, there was a good supply of new
issuance, and the fund's purchases helped to push its maturity back up
closer to 60 days. As of November 30, the fund's average maturity was 59
days.
Q. HOW DID THE FUND PERFORM?
A. Better than the average of its peers over the past year. The fund's
seven-day yield on November 30, 1996, was 2.87%, compared to 3.14% 12
months ago. The latest yield was the equivalent of a 4.79% taxable rate of
return for New Jersey investors in the 40.08% combined state and federal
income tax bracket. Through November 30,1996, the fund's 12-month total
return was 2.93%, compared to 2.85% for the New Jersey Tax-Free Money
Market Funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I believe that the Fed will wait until it can evaluate data in the
fourth quarter of this year before taking action, if any. If the economy is
showing robust signs of strengthening, the market might anticipate a round
of Fed tightening. If we see more economic weakness, then we might start
talking about an easing of interest rates. For now, I'll keep the fund
positioned flexibly until we see signs of movement one way or the other.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income while maintaining
share price stability by
investing in high-quality
short-term New Jersey
municipal money market
securities
TRADING SYMBOL: FNJXX
FUND NUMBER: 417
START DATE: March 17, 1988
SIZE: as of November
30, 1996, more than $423
million
MANAGER: Janice Bradburn,
since August 1996; manager,
various Fidelity and Spartan
state municipal money
market funds; joined Fidelity
in 1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount
- - is short, the fund manager
is anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
usually long-term security that
gives the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/96 5/31/96 11/30/95
0 - 30 63 72 63
31 - 90 16 9 11
91 - 180 7 8 8
181 - 397 14 11 18
WEIGHTED AVERAGE MATURITY
11/30/96 5/31/96 11/30/95
Fidelity New Jersey
Municipal Money Market
Fund 59 days 50 days 70 days
New Jersey Tax-Free
Money Market Funds
Average * 56 days 53 days 60 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 31.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 51.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 50%
Commercial
paper 15%
Tender bonds 1%
Municipal
notes 33%
Other 1%
Variable rate
demand notes
(VRDNs) 51%
Commercial
paper 13%
Tender bonds 1%
Municipal
notes 34%
Other 1%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 86.9 %
Allentown BAN 4.50% 1/15/97 $ 650,000 $ 650,387
Atlantic County Impt. Auth. Rev. (Pooled Gov't. Loan Prog.)
Series 1986, 3.40%, LOC Marine Midland Bank, VRDN 2,900,000 2,900,000
Bloomingdale BAN 3.60% 3/14/97 742,000 742,101
Brick Township BAN 3.75% 3/27/97 4,448,100 4,450,680
Burlington County BAN:
4% 1/24/97 3,500,000 3,501,877
4.25% 3/13/97 3,200,000 3,204,820
Camden County BAN 3.43% 2/11/97 1,215,374 1,215,631
Camden County Impt. Auth. Rev., VRDN:
(Jewish Commty. Center Proj.) Series 1995, 3.55%,
LOC Fleet Bank, NA 2,300,000 2,300,000
(Parkview Redev. Hsg. Proj.) 3.50%,
LOC General Electric Capital Corp. (b) 6,000,000 6,000,000
Carlstadt BAN 4.50% 3/27/97 1,600,000 1,602,967
Chester Township BAN 4.25% 4/14/97 1,400,000 1,402,558
Clark Township BAN 3.94% 2/28/97 2,603,550 2,603,795
Clifton BAN 4.50% 6/26/97 2,500,000 2,508,175
Clifton Board of Ed. BAN 4% 1/10/97 2,500,000 2,500,797
Cresskill BAN 3.78% 1/3/97 1,000,000 1,000,070
Delaware River Port Auth. Participating VRDN, Series SG-53,
3.50% (Liquidity Facility Societe Generale, France) (c) 9,000,000
9,000,000
Denville Board of Ed. BAN 3.50% 2/19/97 2,250,000 2,251,667
Denville Township BAN 4% 12/27/96 4,000,000 4,001,453
East Brunswick BAN 4% 1/3/97 11,700,000 11,701,717
Essex County Impt. Auth. Rev. (Asset Sale)
Series 1995, 3.25% (AMBAC Insured)
(BPA Morgan Guaranty Trust, NY) VRDN 9,500,000 9,500,000
Essex Fells BAN 4% 12/13/96 2,250,000 2,250,320
Fair Lawn BAN 4% 12/13/96 3,000,000 3,000,427
Florham Park BAN 4.25% 11/7/97 1,700,000 1,707,639
Freehold Township BAN 4.125% 10/30/97 1,700,000 1,705,613
Hamilton Township BAN 4% 9/25/97 3,600,000 3,611,687
Harding Township BAN 4.11% 7/11/97 1,000,000 1,000,633
Highland Park BAN 3.75% 2/10/97 1,624,150 1,625,214
Hillside BAN 4.50% 8/8/97 2,422,200 2,430,169
Ho-ho-kus Borough BAN 3.74% 12/5/96 500,000 500,006
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled
Gov't. Loan Prog.) Series 1986, 3.35%,
LOC Comerica Bank, VRDN 20,095,000 20,095,000
Jefferson Township BAN 4.25% 2/21/97 729,810 730,363
Lacey Township BAN 4.25% 4/30/97 1,300,000 1,301,540
Lavallette BAN:
4.25% 2/28/97 974,000 975,141
4.25% 5/2/97 1,887,610 1,891,015
4.25% 11/6/97 1,181,900 1,186,139
Mahwah Board of Ed. BAN 4.50% 5/15/97 1,100,000 1,102,964
Mahwah Township BAN 4.50% 6/26/97 1,400,000 1,404,196
Mendham Township BAN 4.25% 3/24/97 1,000,000 1,001,682
Mercer County BAN 4.50% 6/17/97 8,135,000 8,162,063
Metuchen BAN 4.09% 10/3/97 500,000 500,361
Middletown BAN 4% 2/14/97 2,650,000 2,651,847
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Monmouth County BAN 9.25% 12/1/96 $ 420,000 $ 420,000
Monmouth County Impt. Auth. Rev.
(Pooled Gov't. Loan Prog.) Series 1986, 3.35%,
LOC Union Bank of Switzerland, VRDN 15,050,000 15,050,000
Montclair BAN:
4% 1/24/97 2,200,000 2,201,723
4% 3/27/97 2,082,000 2,084,229
4.50% 6/27/97 1,483,000 1,487,471
Montgomery Township BAN 4% 2/14/97 4,600,000 4,603,206
Morris County Gen. Oblig. BAN 3.47% 12/13/96 1,900,000 1,900,012
Mount Olive Township BAN 3.875% 10/15/97 2,400,000 2,404,561
Neptune Township BAN Series 1996, 4.50% 7/23/97 1,600,000 1,602,458
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
Rfdg. (RJB Associates 1983 Proj.) 3.60%,
LOC PNC Bank 500,000 500,000
(AVP Realty Holdings, Inc.) Series 1989 A, 3.55%,
LOC PNC Bank (b) 1,050,000 1,050,000
(Assoc. for Retarded Citizens) Series 1989 CC, 3.45%,
LOC PNC Bank 1,050,000 1,050,000
(Catholic Community Services) Series 1995, 3.35%,
LOC First Union Nat'l Bank 1,250,000 1,250,000
(Composite Issue A-C & E-L) Series 1989 E, 3.45%,
LOC PNC Bank 200,000 200,000
(Guttenplan's Bakery) Series 1989 G, 3.55%,
LOC PNC Bank (b) 600,000 600,000
(Hirsh Enterprises) Series 1989 II, 3.55%,
LOC PNC Bank (b) 400,000 400,000
(J.W. Holding Group) Series 1989 GG, 3.55%,
LOC PNC Bank (b) 600,000 600,000
(M&S Realty) Series 1988 N, 3.55%,
LOC PNC Bank (b) 800,000 800,000
(PVC Container Corp.) Series 1987 D, 3.65%,
LOC Nat'l. Westminster Bank PLC (b) 1,235,000 1,235,000
(Philly Venture Fund) Series 1988 P, 3.45%,
LOC PNC Bank 1,100,000 1,100,000
(Russ Berrie & Co. Inc.) 3%, LOC Bank of New York 5,200,000 5,200,000
New Jersey Econ. Dev. Auth. Econ. Growth Rev. Series F,
3.25%, LOC Fleet Bank, NA, VRDN 750,000 750,000
New Jersey Econ. Dev. Auth. First Mtg. Rev.
(Franciscan Oaks Proj.) Series 1992 B, 3.40%,
LOC Bank of Scotland, VRDN 8,000,000 8,000,000
New Jersey Econ. Dev. Auth. Gas Facs. Rev. (NUI Corp. Proj.)
Series 1996 A, 4.05% (AMBAC Insured)
(BPA Bank of New York, NY) VRDN (b) 200,000 200,000
New Jersey Econ. Dev. Auth. Ind. & Econ. Dev. Rev.
(Casa DiBertacchi Corp. Facs.) Series 1988, 3.75%,
LOC Marine Midland Bank, VRDN (b) 1,000,000 1,000,000
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Hoffman-La Roche Proj.) Series 1985, 3.55%,
LOC Wachovia Bank of North Carolina, VRDN 3,000,000 3,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Rev., VRDN:
(500 International Drive Partners Proj.) Series 1995, 3.45%,
LOC First Union Nat'l. Bank $ 2,800,000 $ 2,800,000
(Paterson Composite) (b):
Series B, 3.50%, LOC Chase Manhattan Bank 2,000,000 2,000,000
Series C, 3.50%, LOC Chase Manhattan Bank 400,000 400,000
(Peddie School Proj.) 3.45% (BPA PNC Bank) 500,000 500,000
New Jersey Econ. Dev. Auth. Rev. Bonds:
(Chambers Cogeneration Proj.) Series 1991 (b):
3.45%, tender 12/5/96, LOC Swiss Bank Corp. 5,000,000 5,000,000
3.40%, tender 12/6/96, LOC Swiss Bank Corp. 4,900,000 4,900,000
3.45%, tender 12/9/96, LOC Swiss Bank Corp. 6,700,000 6,700,000
3.50%, tender 2/19/97, LOC Swiss Bank Corp. 5,000,000 5,000,000
3.50%, tender 2/21/97, LOC Swiss Bank Corp. 4,300,000 4,300,000
(Keystone Proj.) Series 1992 (b):
3.45%, tender 12/5/96, LOC Union Bank of Switzerland 2,000,000
2,000,000
3.45%, tender 12/6/96, LOC Union Bank of Switzerland 1,000,000
1,000,000
3.45%, tender 12/9/96, LOC Union Bank of Switzerland 3,000,000
3,000,000
3.50%, tender 2/18/97, LOC Union Bank of Switzerland 5,000,000
5,000,000
(Morris Hall/St. Lawrence Inc.) 4.625%, tender 12/2/96,
LOC New Jersey Nat'l. Bank 3,100,000 3,100,000
New Jersey Edl. Facs. Auth. Participating VRDN,
Series SG-48, 3.50%
(Liquidity Facility Societe Generale, France) (c) 4,000,000 4,000,000
New Jersey Gen. Oblig. Participating VRDN (c):
Series 1995-CB1, 3.57%
(Liquidity Facility Chase Manhattan Bank) 4,900,000 4,900,000
Series BT-104, 3.70% (Liquidity Facility Bankers Trust Co.) 2,500,000
2,500,000
Series BTP-190, 3.70% (Liquidity Facility Bankers Trust Co.) 4,800,000
4,800,000
Series MGT-21, 3.20%
(Liquidity Facility Morgan Guaranty Trust, NY) 2,500,000 2,500,000
New Jersey Health Care Facs. Fing. Auth. Rev.
(Hosp. Cap. Asset Fing. Prog.) Series 1985 B, 3.25%,
LOC Chase Manhattan Bank, VRDN 8,100,000 8,100,000
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c):
Series 1994 C-3003, 3.80% (Liquidity Facility Citibank) 6,800,000
6,800,000
Series 1994 C-3004, 3.57% (Liquidity Facility Citibank) 4,000,000
4,000,000
Series 1996 F, 3.60% (Liquidity Facility Bank of America) 5,390,000
5,390,000
Series PA-117, 3.60%
(Liquidity Facility Merrill Lynch & Co.) 4,920,000 4,920,000
New Jersey Sports and Exposition Auth. Rev., Series 1992 C,
3.20% (MBIA Insured) (BPA Barclays Bank) VRDN 4,400,000 4,400,000
New Jersey TRAN Series 1997 A:
3.65% 12/10/96 5,000,000 5,000,000
3.65% 12/12/96 5,000,000 5,000,000
New Jersey Tax & Rev. CP:
Series 1997A:
3.40% 12/13/96 5,000,000 5,000,000
3.45% 1/29/97 2,000,000 2,000,000
3.45% 2/12/97 2,000,000 2,000,000
3.55% 3/10/97
(Liquidity Facility Union Bank of Switzerland) 1,300,000 1,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Trans. Sys. Auth. Bond 5% 6/15/97 $ 2,805,000 $ 2,822,563
New Jersey Trans. Auth. Participating VRDN,
Series 1995 B, 3.40% (MBIA Insured)
(Liquidity Facility Bank of New York, NY) (c) 3,600,000 3,600,000
Newark Gen. Impt. Gen. Oblig. Bonds 5%
10/1/97 (MBIA Insured) (d) 679,000 686,483
North Brunswick BAN 4.50% 8/29/97 3,000,000 3,013,289
North Plainfield BAN 4.50% 6/20/97 1,786,132 1,790,383
Ocean City BAN 4.50% 6/12/97 2,200,000 2,206,147
Ocean County BAN 4.25% 6/20/97 2,300,000 2,304,509
Passaic County BAN:
4% 4/4/97 3,400,000 3,404,170
4.10% 9/26/97 (d) 1,130,000 1,134,430
Passaic County Util. Auth. Solid Waste Sys. Rev. BAN
Series B, 3.95% 9/3/97 (MBIA Insured) 600,000 600,000
Pennington BAN 4.50% 6/27/97 500,000 501,368
Pennsauken Township BAN 4.10% 9/26/97 1,900,000 1,900,437
Pequannock Township BAN 4% 12/5/96 610,000 610,026
Readington Township BAN 4% 5/2/97 900,000 901,472
Roselle Park BAN 4.50% 10/16/97 1,322,000 1,329,002
Salem County Ind. Poll. Cont. Fing. Auth. Poll. Cont.
Rev. Bonds (Philadelphia Elec. Co.) Series 1993 A,
3.50%, tender 2/18/97, LOC Toronto Dominion Bank (b) 4,600,000 4,600,000
Somerset County Gen. Oblig. Bonds 4.35% 12/1/96 760,000 760,000
Somerset County Poll. Cont. Rev.
(Minnesota Mining & Manufacturing 3M)
Series 1982, 3.30%, VRDN 600,000 600,000
Somerville BAN 3.50% 2/21/97 1,300,000 1,300,843
Southeast Morris County Muni. Util. Auth. Proj. BAN
4% 1/15/97 1,000,000 1,000,534
Upper Freehold BAN 4.50% 10/16/97 740,000 743,544
Upper Saddle River BAN 4.25% 1/10/97 1,178,000 1,178,627
Vernon Township Board of Ed. BAN 4.25% 12/5/97 (d) 2,250,000 2,262,353
Verona Township BAN 4.10% 11/19/97 1,523,000 1,528,965
Voorhees BAN 4.50% 8/6/97 920,000 923,307
Wall Township BAN 4.50% 6/26/97 1,800,000 1,805,395
Washington Township BAN 4% 12/13/96 1,200,000 1,200,067
West Deptford BAN 4% 3/27/97 1,000,000 1,000,616
West Milford BAN 4% 1/24/97 4,403,200 4,406,335
West Orange Township BAN 4.125% 1/13/97 1,200,000 1,200,650
West Orange Township Gen. Oblig. Bonds 4% 12/1/96 400,000 400,000
Willingboro BAN 4.50% 6/26/97 1,716,000 1,720,675
362,307,564
NEW YORK & NEW JERSEY - 11.4 %
New York & New Jersey Port Auth. Equip. Rev., VRDN:
Series 1996-1, 3.45% 5,000,000 5,000,000
Series 1996-2, 3.60% (b) 3,500,000 3,500,000
Series 1996-4, 3.45% (b) 4,200,000 4,200,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
New York & New Jersey Port Auth. Participating VRDN (c):
Series GS-52, 3.65%
(Liquidity Facility Societe Generale France) (b) $ 4,600,000 $ 4,600,000
Series PA-67, 3.45%
(Liquidity Facility Merrill Lynch & Co.) 2,000,000 2,000,000
New York & New Jersey Port Auth. Rev., VRDN (b):
Series 1991, 3.821% 8,800,000 8,800,000
Series 1992, 3.41% 6,800,000 6,800,000
Series 1995, 3.41% 9,400,000 9,400,000
New York & New Jersey Port Auth. Spl. Oblig. Rev.
(Versatile Structure) VRDN (b):
Series 1, 4.20% 1,000,000 1,000,000
Series 4, 4.15% (BPA Landesbank Hessen-Thuringen) 1,800,000 1,800,000
47,100,000
PUERTO RICO - 1.7 %
Puerto Rico Commonwealth Highway & Trans. Auth.
Participating VRDN, Series PA-114, 3.40%
(Liquidity Facility Merrill Lynch & Co., Inc.) (c) 300,000 300,000
Puerto Rico Commonwealth Pub. Impt. Participating VRDN (c):
Series BT-165, 3.55% (Liquidity Facility Bankers Trust Co.) 5,712,000
5,712,000
Series PA-97, 3.40% (MBIA Insured)
(Liquidity Facility Merrill Lynch & Co.) 1,000,000 1,000,000
7,012,000
TOTAL INVESTMENTS - 100% $ 416,419,564
Total cost for Income Tax Purposes $ 416,419,564
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
4. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At November 30, 1996, the fund had a capital loss carryforward of
approximately $29,000 of which $8,000 and $21,000 will expire on November
30, 2001 and 2003 respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value - $ 416,419,564
See accompanying schedule
Cash 3,639,645
Receivable for investments sold 3,300,784
Interest receivable 4,239,037
TOTAL ASSETS 427,599,030
LIABILITIES
Payable for investments purchased $ 4,086,471
Delayed delivery
Distributions payable 29,732
Accrued management fee 137,770
Other payables and accrued expenses 121,233
TOTAL LIABILITIES 4,375,206
NET ASSETS $ 423,223,824
Net Assets consist of:
Paid in capital $ 423,252,697
Accumulated net realized gain (loss) on investments (28,873)
NET ASSETS, for 423,252,697 shares outstanding $ 423,223,824
NET ASSET VALUE, offering price and redemption price per $1.00
share ($423,223,824 (divided by) 423,252,697 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1996
INTEREST INCOME $ 15,282,911
EXPENSES
Management fee $ 1,726,411
Transfer agent, accounting and custodian fees and 939,170
expenses
Non-interested trustees' compensation 2,975
Registration fees 27,200
Audit 25,666
Legal 4,593
Miscellaneous 1,955
Total expenses before reductions 2,727,970
Expense reductions (45,227) 2,682,743
NET INTEREST INCOME 12,600,168
REALIZED AND UNREALIZED GAIN (LOSS) 517
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from (353)
accretion of market discount
NET GAIN (LOSS) 164
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,600,332
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 12,600,168 $ 13,958,335
Net interest income
Net realized gain (loss) 517 (20,623)
Increase (decrease) in net unrealized gain from (353) 353
accretion of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,600,332 13,938,065
FROM OPERATIONS
Distributions to shareholders from net interest income (12,600,168) (13,958,335)
Share transactions at net asset value of $1.00 per share 1,156,682,684 1,061,922,377
Proceeds from sales of shares
Reinvestment of distributions from net interest income 12,239,915 13,552,281
Cost of shares redeemed (1,180,407,784) (1,040,293,968)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES (11,485,185) 35,180,690
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (11,485,021) 35,160,420
NET ASSETS
Beginning of period 434,708,845 399,548,425
End of period $ 423,223,824 $ 434,708,845
</TABLE>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .029 .033 .022 .019 .028
Operations
Net interest income
Less Distributions
From net interest income (.029) (.033) (.022) (.019) (.028)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 2.93% 3.33% 2.19% 1.94% 2.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 423,224 $ 434,709 $ 399,548 $ 359,587 $ 359,093
(000 omitted)
Ratio of expenses to average .63% .62% .62% .63% .64%
net assets
Ratio of expenses to average .61% .62% .62% .63% .64%
net assets after expense B
reductions
Ratio of net interest income to 2.89% 3.28% 2.17% 1.92% 2.78%
average net assets
</TABLE>
1. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
2. FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity New Jersey Municipal Money Market Fund (the fund) (formerly
Fidelity New Jersey Tax-Free Money Market Portfolio) 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. The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to make
certain estimates and assumptions at the date of the financial statements.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly fee that is calculated on the
basis of a group fee rate plus a fixed individual
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
fund fee rate applied to the average net assets of the fund. The group fee
rate is the weighted average of a series of rates and is based on the
monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .25%. For
the period, the management fee was equivalent to an annual rate of .40% of
average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
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 its 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 $8,659 for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) 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 account fees and asset-based fees that vary according to account size
and type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $822,468 and $88,500, respectively.
For the period, the transfer agent fees were equivalent to an annual rate
of .19% of average net assets.
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 $55,169.
4. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its transfer agent whereby
interest earned on uninvested cash balances was used to offset a portion of
the fund's expenses. During the period, the fund's transfer agent fees were
reduced by $45,227 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Fidelity Court Street Trust II:
Fidelity New Jersey Municipal Money Market Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Court Street Trust II: Fidelity New Jersey Municipal Money Market
Fund (formerly Fidelity New Jersey Tax-Free Money Market Portfolio),
including the schedule of portfolio investments, as of November 30, 1996,
and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 by correspondence with the
custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Court Street Trust II: Fidelity New Jersey Municipal Money
Market Fund as of November 30, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five
years in the period then ended, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
January 3, 1996
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Sarah H. Zenoble, Vice President
Janice S. Bradburn, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
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*
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S MUNICIPAL
MONEY MARKET FUNDS
California Municipal Money Market
Connecticut Municipal Money Market
Massachusetts Municipal Money Market
Michigan Municipal Money Market
Municipal Money Market
New Jersey Municipal Money Market
New York Municipal Money Market
Ohio Municipal Money Market
Spartan(registered trademark) Arizona Municipal
Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE
