SPARTAN(registered trademark)
(registered trademark)
FLORIDA
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
MAY 31, 1997
CONTENTS
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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 35 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 39 Notes to the financial statements.
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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:
Through the first five months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
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. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income, as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, the past five years and
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan Florida Municipal Income Fund 1.39% 7.97% 44.41% 50.14%
Lehman Brothers Florida 1.60% 8.19% n/a n/a
Municipal Bond Index
Florida Municipal Debt Funds Average 1.15% 7.46% 38.61% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, six months, one year, five years or since the fund started on
March 16, 1992. For example, if you had invested $1,000 in a fund that had
a 5% return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the Lehman
Brothers Florida Municipal Bond Index - a total return performance
benchmark for Florida investment-grade municipal bonds with maturities of
at least one year. 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 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months average
represents a peer group of 76 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Florida Municipal Income Fund 7.97% 7.63% 8.11%
Lehman Brothers Florida 8.19% n/a n/a
Municipal Bond Index
Florida Municipal Debt Funds Average 7.46% 6.74% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual cumulative return and
show you what would have happened if the fund had performed at a constant
rate each year. (Note: Lipper calculates average annual total returns by
annualizing each fund's total return, then taking an arithmetic average.
This may produce a slightly different figure than that obtained by
averaging the cumulative total returns by annualizing the result.)
$10,000 OVER LIFE OF FUND
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
1996/12/31 14658.38 14170.70
1997/01/31 14692.85 14197.48
1997/02/28 14827.51 14327.82
1997/03/31 14596.62 14136.83
1997/04/30 14723.54 14255.15
1997/05/30 14946.39 14469.55
$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 May 31, 1997, the
value of the investment would have grown to $14,946 - a 49.46% increase on
the initial investment. 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 $14,470 - a 44.70% 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
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SIX YEARS ENDED NOVEMBER 30, MARCH 16, 1992
MONTHS (COMMENCEME
ENDED NT
MAY 31, OF OPERATIONS) T
O
NOVEMBER 30,
1997 1996 1995 1994 1993 1992
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Dividend return 2.46% 5.10% 6.30% 5.01% 6.10% 4.74%
Capital -1.07% 0.49% 14.78% -12.21% 7.41% 5.19%
appreciation
return
Total return 1.39% 5.59% 21.08% -7.20% 13.51% 9.93%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested, if any. For the periods through November 30,
1996, capital appreciation and total returns include the effect of a $5
account closeout fee on an average size account.
DIVIDENDS AND YIELD
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PERIODS ENDED MAY 31, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.63(cents) 27.18(cents) 54.50(cents)
Annualized dividend rate 4.93% 4.92% 4.95%
30-day annualized yield 4.78% - -
30-day annualized tax-equivalent yield 7.47% - -
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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 $11.05 over
the past one month, $11.07 over the past six months and $11.01 over the
past one 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% 1997 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
An interview with Jonathan Short, Portfolio Manager of Spartan Florida
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, JON?
A. For the six-month period that ended May 31, 1997, the fund had a total
return of 1.39%. To get a sense of how the fund did relative to its
competitors, the Florida municipal debt funds average returned 1.15% for
the same six-month period, as tracked by Lipper Analytical Services.
Additionally, the Lehman Brothers Florida Municipal Bond Index returned
1.60%. For the 12-month period that ended May 31, 1997, the fund had a
total return of 7.97%, the Florida municipal debt funds average returned
7.46%, again according to Lipper, and the Lehman Brothers Florida Municipal
Bond Index returned 8.19%.
Q. THE BOND MARKET WAS SOMEWHAT JITTERY DURING THE SIX-MONTH PERIOD. WHAT
CAUSED ALL THE UNCERTAINTY AND HOW DID MUNICIPALS FARE IN THE MIDST OF IT?
A. The main reason for the bond market's skittishness was the fear of
inflation. Worried that the economy was growing at too quick a pace - and
much faster than anticipated - investors sent bond yields higher and bond
prices lower. Of course, bond investors react negatively to even the threat
of higher inflation because it can eat away at the fixed-income payments
their bonds generate. While there weren't any tangible signs that inflation
was on the upswing, investors continued to be concerned about the future
and whether or not the Federal
Reserve Board would raise interest rates as an anti-inflationary measure
sometime down the road. Municipals, however, suffered less during this
troubled period than their Treasury counterparts. That was because the
supply of munis was limited and the demand for them increased. As a result,
tax-free bonds generally were able to hold their ground better than
Treasuries and many other taxable fixed-income investments.
Q. HOW DID YOU ALTER YOUR STRATEGY DURING THE PAST SIX MONTHS?
A. While I did buy and sell bonds based on what I believed their value to
be relative to other bonds available in the marketplace, my basic strategy
remained intact. I continued to keep the fund's duration - which measures
how sensitive it is to changes in interest rates - in line with the Florida
municipal market as a whole, as reflected by the fund's benchmark index. In
theory, I guess it's possible to accurately predict where interest rates
are headed. But practically speaking, it has proved to be very difficult to
do with consistency over any meaningful stretch of time.
Q. DURING THE PAST SIX MONTHS, HOWEVER, IT APPEARS THAT YOU SOLD SOME
LONGER-TERM BONDS, WHICH ARE THE MOST SENSITIVE OF ALL BOND MATURITIES TO
RISING INTEREST RATES. DID THAT SIGNAL THAT YOU WERE GETTING MORE DEFENSIVE
IN LIGHT OF HIGHER INTEREST RATES?
A. No, it was a function of where I found the best value. In my view,
longer-term bonds with maturities of more than 20 years didn't offer enough
yield advantage over shorter-term bonds to compensate for their added
interest rate sensitivity. In my view, the better risk/reward payoff was
found in intermediate bonds. So I sold some long-term bonds and replaced
them with shorter-term maturities.
Q. WHY DID YOU DECREASE THE FUND'S BAA-RATED BONDS?
A. The primary reason was that credit spreads were tight. By that I mean
that lower-rated Baa bonds offered a very small amount of additional yield
- - by historical standards - over higher-rated bonds. Again, I didn't think
that the small incremental yield that lower-quality bonds paid was worth
the added credit risk they carried. So I tended to emphasize higher-quality
bonds - including those rated Aaa by Moody's Investor Service.
Q. HEALTH CARE AND ELECTRIC REVENUE BONDS WERE TWO OF THE FUND'S LARGEST
SECTOR CONCENTRATIONS AT THE END OF THE PERIOD. SINCE BOTH SECTORS ARE
FACING UNIQUE CHALLENGES, HOW DID YOU CHOOSE WHICH INVESTMENTS WERE
APPROPRIATE FOR THE FUND?
A. In the health care sector, the main challenges were consolidation,
cost-cutting and competition. I emphasized health care facilities that I
believed were well-positioned in their service area and that had strong
relationships with doctors and various payers, including insurance
companies and the state and federal governments. With input from Fidelity's
research analysts, I targeted hospitals with strong market share, sensible
balance sheets and effective management teams. Health care bonds typically
offer high yields relative to other sectors, which is one reason why I
thought they were attractive investments for the fund. Turning to electric
providers, I preferred those that I thought had reasonable enough cost
structures, which would allow them to do well in a more competitive
environment. While I didn't see any imminent threat of more competition
over the near term, the national trend toward more competition could
eventually take hold in Florida.
Q. WHAT'S YOUR OUTLOOK?
A. From a supply and demand standpoint, I'm optimistic about municipals. I
don't expect to see a tremendous amount of new bonds issued, and the
increase in supply we're likely to see could be easily digested if demand
remains firm. How municipals fare over the next year will depend heavily on
the direction of interest rates, but I don't think anyone can accurately
pinpoint where interest rates will be a week, a month or a year from now.
That said, we may continue to see some volatility in the bond market as
long as there are conflicting signs about the economy and inflation trends.
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
FUND NUMBER: 427
TRADING SYMBOL: FFLIX
START DATE: March 16, 1992
SIZE: as of May 31, 1997,
more than $390 million
MANAGER: Jonathan Short,
since 1996; manager, Fidelity
California Municipal Income,
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
1996; joined Fidelity in 1990
(checkmark)
JONATHAN SHORT ON FLORIDA'S
ECONOMY:
"Much as it has for the last
several years, Florida's
economy continues to expand.
Unemployment is the lowest it
has been so far in this
decade and the state's job
growth is outpacing the nation
as a whole. However, recent
evidence suggests that the
state's economic growth may
slow somewhat over the next
several years. Population
growth - which has fueled
Florida's expansion over the
past decade - slowed in 1996
to the lowest rate since World
War II. Additionally, the state's
heavy reliance on tourism
could put the skids on
Florida's growth if the U.S.
economy slows.
"Even so, I believe that Florida
will remain one of the
fastest-growing states in the
nation for the remainder of the
century. The state's strong ties
to Latin America will be a plus
as long as trade relations
between the U.S. and the
region remain positive. Given
the affordable housing and
pleasant climate the state has
to offer, population growth
should remain positive, even
if it does slow from current
levels."
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE MARKET SECTORS AS OF MAY 31, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Electric Revenue 16.9 16.6
Health Care 13.9 14.6
Transportation 13.5 14.3
Water & Sewer 12.0 11.8
General Obligation 11.3 9.5
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1997
6 MONTHS AGO
Years 13.6 14.1
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 MAY 31, 1997
6 MONTHS AGO
Years 7.3 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 THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Aaa 60.5%
Aa, A 22.6%
Baa 11.2%
Ba, B 0.0%
Non-rated 3.0%
Short-term
investments 2.7%
Aaa 61.4%
Aa, A 22.0%
Baa 11.7%
Ba, B 0.0%
Non-rated 3.1%
Short-term
investments 1.8%
Row: 1, Col: 1, Value: 60.5
Row: 1, Col: 2, Value: 22.6
Row: 1, Col: 3, Value: 11.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 6, Value: 2.7
Row: 1, Col: 1, Value: 61.4
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: 1.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS. AMOUNTS
SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL BONDS - 97.3%
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - 95.3%
Alachua County Health Facs. Auth. Health
Facs. Rev. (Santa Fe Health Care Facs. Proj.):
7.60% 11/15/13
(Pre-Refunded to 11/15/00 @ 102) (d) Baa1 $ 1,000,000 $ 1,117,500
Rfdg. 6% 11/15/09
(Escrowed to Maturity) (d) Baa1 2,950,000 3,090,125
Rfdg. 6.05% 11/15/16
(Escrowed to Maturity) (d) Baa1 6,230,000 6,525,925
Broward County Hsg. Fin. Auth. Single-Family
Mtg. Rev. 6.65% 8/1/21 (c) Aaa 2,000,000 2,077,500
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.)
7.95% 12/1/08 A 11,250,000 12,248,437
Broward County Spl. Oblig. Rfdg.:
5.50% 1/1/02 (AMBAC Insured) Aaa 1,365,000 1,411,069
5.50% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,407,000
5.50% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,685,169
Dade County Aviation Rev. Rfdg.:
(Miami Int'l Arpt.) Series A, 5.75%
10/1/04 (c)(f) Aaa 5,000,000 5,206,250
Series B, 6.30% 10/1/05
(AMBAC Insured) Aaa 1,200,000 1,315,500
Series Y, 5.30% 10/1/05 Aa3 3,460,000 3,550,825
Dade County Gtd. Entitlement Rev. Rfdg.:
Series B, 0% 2/1/02 (MBIA Insured) Aaa 1,810,000 1,448,000
0% 8/1/18 (AMBAC Insured)
(Pre-Refunded to 2/1/06 @ 40.446) (d) Aaa 14,835,000 3,894,187
Dade County Pub. Facs. Rev. Rfdg. (Jackson
Mem. Hosp.) Series A, 4.75% 6/1/10
(MBIA Insured) Aaa 3,540,000 3,305,475
Dade County Resource Recovery Facs. Rev. Rfdg.
5.50% 10/1/09 (AMBAC Insured) (c) Aaa 4,000,000 4,030,000
Dade County Seaport Rev. Rfdg.:
Series 95:
6.20% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,001,825
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,182,875
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,283,269
6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,734,469
Dade County Spl. Oblig. Rev. Rfdg. Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,057,600
0% 10/1/04 (AMBAC Insured) Aaa 5,045,000 3,506,275
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Wtr. & Swr. Sys. Rev.:
6.25% 10/1/06 (FGIC Insured) Aaa $ 1,500,000 $ 1,642,500
6.25% 10/1/08 (FGIC Insured) Aaa 1,100,000 1,211,375
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,103,750
5.25% 10/1/21 (FGIC Insured) Aaa 850,000 809,625
5.50% 10/1/25 (FGIC Insured) Aaa 1,930,000 1,874,512
Dunedin Hosp. Rev. Rfdg. (Mease Health Care)
5.25% 11/15/06 (MBIA Insured) Aaa 1,400,000 1,431,500
Dunedin Util. Sys. Rev. Rfdg. 6.25% 10/1/11
(FGIC Insured) Aaa 1,360,000 1,494,300
Duval County Hsg. Fin. Auth. Single-Family
Mtg. Rev. Series C, 7.70% 9/1/24
(FGIC Insured) (GNMA Coll.) Aaa 680,000 719,950
Duval County School Dist. Rev. Rfdg.
6.30% 8/1/06 (AMBAC Insured) Aaa 5,000,000 5,393,750
Escambia County Health Facs. Auth. Rev.
(Baptist Hosp. & Baptist Manor):
6.75% 10/1/14 BBB+ 3,250,000 3,408,437
Series B, 6% 10/1/14 BBB+ 2,825,000 2,814,406
Escambia County Poll. Cont. Rev.:
Rfdg. (Gulf Pwr. Co. Proj.) 6.75% 3/1/22 A1 2,000,000 2,044,680
(Champion Int'l Corp. Proj.):
6.90% 8/1/22 (c) Baa1 5,000,000 5,331,250
6.40% 9/1/30 (c) Baa1 1,000,000 1,018,750
Escambia County Util. Sys. Auth. Util. Sys. Rev.
Series B, 6.25% 1/1/15 (FGIC Insured) Aaa 1,500,000 1,642,500
Florida Hsg. Fin. Agcy. Rfdg.:
Single-Family Mtg. Rev.:
Series A, 6.35% 7/1/14 Aa1 1,345,000 1,385,350
Series A, 6.55% 7/1/14 (c) Aaa 1,430,000 1,488,987
Series B, 6.55% 7/1/17 (c) Aaa 1,345,000 1,395,437
Multi-Family Mtg. Rev. (Park Colony Proj.)
Series D, 5.10% 4/1/03, LOC Mellon
Bank, NA A+ 2,500,000 2,500,000
Florida Gen. Oblig. Rfdg. Senior Lien
(Jacksonville Trans.) 5% 7/1/03 (f) Aa 1,435,000 1,452,937
Florida Board of Ed. Admin. Cap. Outlay Rfdg.
(Pub. Ed.):
Series A, 5% 6/1/24 Aa2 5,000,000 4,525,000
Series 1994 C, 5.40% 6/1/03 Aa2 1,060,000 1,094,450
Series 1994 C, 5.40% 6/1/06 Aa2 1,500,000 1,548,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Board of Ed. Admin. Cap. Outlay Rfdg.
(Pub. Ed.): - continued
Series D:
5% 6/1/15 Aa2 $ 5,750,000 $ 5,397,812
4.75% 6/1/16 Aa2 2,000,000 1,782,500
4.75% 6/1/17 Aa2 4,000,000 3,555,000
5.125% 6/1/18 Aa2 4,500,000 4,218,750
Florida Fin. Dept. Gen. Svcs. Rev. (Dept. of
Natural Resources Preservation 2000)
Series A:
6.75% 7/1/08 (AMBAC Insured) Aaa 1,350,000 1,468,125
5.70% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,093,750
5.75% 7/1/11 (AMBAC Insured) Aaa 3,000,000 3,071,250
Florida Mid-Bay Bridge Auth. Rev. Series A:
7.50% 10/1/17 - 1,700,000 1,857,250
6.875% 10/1/22 (Escrowed to Maturity) (d) - 3,000,000 3,487,500
Florida Municipal Pwr. Agcy. Rev. (Stanton II Proj.):
6.50% 10/1/20 (Pre-Refunded to 10/1/02
@ 102) (AMBAC Insured) (d) Aaa 1,000,000 1,105,000
Rfdg. 4.50% 10/1/16 (AMBAC Insured) Aaa 4,400,000 3,778,500
Rfdg. 4.50% 10/1/27 (AMBAC Insured) Aaa 4,200,000 3,444,000
Florida Tpk. Auth. Tpk. Rev.:
Series A:
6.25% 7/1/09 (FGIC Insured) Aaa 1,825,000 1,923,094
7.20% 7/1/11 (Pre-Refunded to 7/1/01
@ 102) (AMBAC Insured) (d) Aaa 1,500,000 1,676,250
5% 7/1/19 (FGIC Insured) Aaa 2,000,000 1,837,500
Dept. of Transportation Series A:
5.50% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,380,000
5.50% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,123,750
5.50% 7/1/14 (FGIC Insured) Aaa 1,500,000 1,505,625
Gainesville Util. Sys. Rev.:
Rfdg.:
Series A, 5.75% 10/1/04 Aa 1,000,000 1,051,250
Series B, 5.50% 10/1/13 Aa 1,500,000 1,500,000
Series B, 6.50% 10/1/10 Aa 1,600,000 1,792,000
Greater Orlando Aviation Auth. Orlando Aprt.
Facs. Rev. Series A, 6.50% 10/1/05
(FGIC Insured) (c) Aaa 3,550,000 3,869,500
Hillsborough County Rfdg. (Environmentally
Sensitive Lands Acquisition & Protection)
6% 7/1/02 (AMBAC Insured) Aaa 2,080,000 2,210,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Hillsborough County Aviation Auth. Rev. Rfdg.
(Tampa Int'l Aprt.) Series A, 6.90% 10/1/11
(FGIC Insured) Aaa $ 4,250,000 $ 4,531,563
Hillsborough County Cap. Impt. Proj. Rev.
Rfdg. 6% 8/1/06 (FGIC Insured) Aaa 1,000,000 1,083,750
Hillsborough County Port. Dist. Spl. Rev. Rfdg.
(Tampa Port Auth.):
6.50% 6/1/03 (c) Aaa 2,000,000 2,182,500
6.50% 6/1/05 (c) Aaa 2,000,000 2,215,000
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa 8,000,000 5,310,000
0% 8/1/06 (MBIA Insured) Aaa 10,000,000 6,287,500
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,182,500
Indian River County Wtr. & Swr. Rev. Rfdg.
Series A, 5.50% 9/1/11 (FGIC Insured) Aaa 2,000,000 2,030,000
Jacksonville Elec. Auth. Rev. Rfdg.:
(Bulk Pwr. Supply - Scherer) 6.75% 10/1/21
(Pre-Refunded to 10/1/00 @ 101.50) (d) Aaa 1,000,000 1,083,750
(St. Johns River Issue #2):
Series 10, 6.50% 10/1/03 Aa1 1,500,000 1,646,250
Series 5, 7% 10/1/09 Aa1 2,490,000 2,648,737
Jacksonville Excise Tax Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa 1,000,000 1,073,750
Series A:
5% 10/1/09 (FGIC Insured) Aaa 1,335,000 1,326,656
6.50% 10/1/11 (Pre-Refunded to
10/1/99 @ 102) (AMBAC Insured) (d) Aaa 1,200,000 1,281,000
Series B, 5.60% 10/1/08 (FGIC Insured) Aaa 2,300,000 2,334,500
Jacksonville Health Facs. Auth. Hosp. Rev.
Rfdg. (Baptist Med. Ctr. Proj.) Series A,
7.30% 6/1/19 (MBIA Insured) Aaa 500,000 531,875
Jacksonville Health Facs. Auth. Ind. Dev. Rev.
(Cypress Village Proj. - Nat'l Benevolent Assoc.):
Rfdg.:
7% 12/1/14 Baa1 1,000,000 1,052,500
7% 12/1/22 Baa1 2,000,000 2,092,500
6.25% 12/1/23 Baa1 2,710,000 2,710,000
8% 12/1/24 Baa1 2,740,000 3,072,225
Jacksonville Ind. Dev. Rev. Rfdg. (Cargill, Inc.
Proj.) 6.40% 3/1/11 (e) AA- 1,250,000 1,321,875
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Sales Tax Rev. (River City
Renaissance Proj.):
6% 10/1/02 (FGIC Insured) Aaa $ 1,500,000 $ 1,599,375
6% 10/1/04 (FGIC Insured) Aaa 3,430,000 3,691,537
5.65% 10/1/14 (FGIC Insured) Aaa 1,900,000 1,914,250
Jacksonville Wtr. & Swr. Dist. Rev.:
6% 10/1/06 (MBIA Insured) Aaa 2,075,000 2,233,219
(Jacksonville Suburban Util. Corp. Proj.)
6.75% 6/1/22 (c) A3 1,915,000 2,029,900
Key West Util. Board Elec. Rev. Rfdg. 0%
10/1/14 (AMBAC Insured) Aaa 6,755,000 2,566,900
Lakeland Elec. & Wtr. Rev.:
0% 10/1/09 (FGIC Insured) Aaa 2,840,000 1,480,350
Rfdg. (Jr. Sub. Lien):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,562,025
6.50% 10/1/06 (FGIC Insured) Aaa 2,200,000 2,450,250
6.50% 10/1/07 (FGIC Insured) Aaa 4,095,000 4,581,281
Leesburg Hosp. Rev. Rfdg. (Leesburg Reg.
Med. Ctr. Proj.) :
Series A, 5.60% 7/1/08 A 5,000,000 5,081,250
Series B, 5.625% 7/1/13 A 2,795,000 2,770,544
Leon County Rev. Rfdg. 5.50% 10/1/07 Aaa 1,000,000 1,037,500
Melbourne Arpt. Rev. Rfdg.:
5.75% 10/1/97 (MBIA Insured) (c) Aaa 190,000 191,197
5.75% 10/1/98 (MBIA Insured) (c) Aaa 205,000 209,356
5.75% 10/1/99 (MBIA Insured) (c) Aaa 215,000 221,450
6.25% 10/1/00 (MBIA Insured) (c) Aaa 230,000 242,075
6.25% 10/1/01 (MBIA Insured) (c) Aaa 240,000 255,300
6.25% 10/1/02 (MBIA Insured) (c) Aaa 260,000 279,175
6.25% 10/1/03 (MBIA Insured) (c) Aaa 270,000 291,937
6.50% 10/1/04 (MBIA Insured) (c) Aaa 290,000 319,362
6.50% 10/1/05 (MBIA Insured) (c) Aaa 310,000 343,713
6.50% 10/1/06 (MBIA Insured) (c) Aaa 325,000 362,375
6.75% 10/1/07 (MBIA Insured) (c) Aaa 350,000 399,000
6.75% 10/1/08 (MBIA Insured) (c) Aaa 375,000 427,969
6.75% 10/1/09 (MBIA Insured) (c) Aaa 400,000 457,500
6.75% 10/1/10 (MBIA Insured) (c) Aaa 425,000 485,031
Naples Hosp. Rev. Rfdg.:
(Naples Community Hosp. Inc. Proj.)
5.10% 10/1/07 (MBIA Insured) Aaa 1,500,000 1,507,500
5% 10/1/19 (MBIA Insured) Aaa 1,000,000 911,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
North Broward Hosp. Dist. Rev. Rfdg.
6.40% 1/1/06 (MBIA Insured) (Pre-Refunded
to 1/1/02 @ 102) (d) Aaa $ 950,000 $ 1,035,500
North Miami Edl. Facs. Rev. (Johnson & Wales
Univ. Proj.) Series A, 6.125% 4/1/20 - 6,605,000 6,629,769
Orange County Health Facs. Auth. Hosp. Rev.:
Rfdg. (Adventist Health Sys.) 5.75%
11/15/05 (AMBAC Insured) Aaa 2,000,000 2,120,000
(Orlando Reg. Healthcare) Series A, 6.25%
10/1/18 (MBIA Insured) Aaa 2,500,000 2,734,375
Orange County Hsg. Fin. Auth. Single-Family
Mtg. Rev. 6.40% 10/1/14 (c) Aaa 2,000,000 2,075,000
Orange County Tourist Dev. Tax Rev. Rfdg.
Series A:
5.75% 10/1/07 (MBIA Insured) Aaa 3,620,000 3,859,825
5.85% 10/1/08 (MBIA Insured) Aaa 1,795,000 1,920,650
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg.:
6% 10/1/10 Aa1 2,405,000 2,567,338
Sub-Series A, 5% 10/1/20 Aa 1,500,000 1,365,000
Sub-Series D, 6.75% 10/1/17 Aa 7,000,000 8,102,500
Series A, 6.50% 10/1/20 (Pre-Refunded to
10/1/01 @ 102) (d) Aaa 2,055,000 2,250,225
5.538% 10/31/13 Aa 9,400,000 9,306,000
Palm Beach County Health Facs. Auth. Rev.
(Retirement Commty. - Adult Commty. Total
Svcs. Inc.) 5.625% 11/15/20 A- 2,500,000 2,434,375
Pasco County Solid Waste Disp. & Resource
Recovery Sys. Rev.:
5.75% 4/1/04 (AMBAC Insured) (c)(f) Aaa 3,380,000 3,477,175
6% 4/1/10 (AMBAC Insured) (c)(f) Aaa 5,770,000 5,979,163
6% 4/1/11 (AMBAC Insured) (c)(f) Aaa 5,000,000 5,162,500
Pensacola Arpt. Rev. Rfdg. Series A, 6.125%,
10/1/18 (MBIA Insured) (c)(f) Aaa 1,500,000 1,498,125
Plantation Health Facs. Auth. Rev.
(Covenant Retirement Commty. 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 1,546,600
Reedy Creek Impt. Dist. Florida Util. Rev.
Series 1991-1, 6.50% 10/1/16 (MBIA Insured)
(Pre-Refunded to 10/1/01 @ 101) (d) Aaa 1,350,000 1,466,438
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Sarasota Wtr. & Swr. Util. Rev. Rfdg.:
5.25% 10/1/00 (FGIC Insured) Aaa $ 1,150,000 $ 1,180,188
6.25% 10/1/04 (FGIC Insured) Aaa 1,450,000 1,578,688
Sarasota County Util. Sys. Rev. Rfdg. Series A,
6%, 10/1/05 (FGIC Insured) Aaa 1,830,000 1,964,963
Seminole County Wtr. & Swr. Rev. Rfdg. & Impt.
6% 10/1/09 (MBIA Insured) Aaa 1,500,000 1,629,375
South Miami Health Facs. Auth. Hosp. Rev.
Rfdg. (Baptist Health Sys. Oblig.) 5.50%
10/1/05 (MBIA Insured) Aaa 1,980,000 2,056,725
Sumter County School Dist. Rev.
(Multi-Dist. Loan Prog.) 7.15% 11/1/15
(FSA Insured) Aaa 1,000,000 1,202,500
Sunrise Util. Sys. Rev. Series A:
0% 10/1/00 (AMBAC Insured) Aaa 1,070,000 920,200
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 999,906
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 775,000
0% 10/1/03 (AMBAC Insured) Aaa 1,000,000 735,000
Sunshine State Governmental Fing. Commission
Rev. Series A, 5.50% 10/1/05 (FGIC Insured) Aaa 1,000,000 1,042,500
Tampa Rev. (Allegheny Health Sys. - St. Joseph):
6.70% 12/1/07 (MBIA Insured) Aaa 2,535,000 2,769,488
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 162,188
Tampa Wtr. & Swr. Rev. Rfdg.:
Series B, 5% 10/1/14 (FGIC Insured) Aaa 1,000,000 942,500
5.125% 10/1/17 (FGIC Insured) Aaa 6,890,000 6,511,050
Tarpon Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.):
7.5% 5/1/11 BBB- 1,225,000 1,312,281
7.625% 5/1/21 BBB- 4,245,000 4,552,763
Volusia County Edl. Facs. Auth. (Embry-Riddle
Aeronautical Univ.) 6.125% 10/15/16 Baa2 2,000,000 2,027,500
375,043,627
PUERTO RICO - 2.0%
Puerto Rico Commonwealth Infrastructure Fing.
Auth. Spl. Series A, 7.50% 7/1/09 Baa1 1,000,000 1,049,500
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.
Rfdg. Series W:
6.50% 7/1/05 (MBIA Insured) Aaa 3,000,000 3,345,000
6.50% 7/1/06 (MBIA Insured) Aaa 2,000,000 2,245,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (A) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Pub. Bldg. Auth. Guaranteed Pub.
Ed. & Health Facs. Series L, 6.875% 7/1/21
(Pre-Refunded to 7/1/02 @ 101.50) (d) Aaa $ 1,000,000 $ 1,120,000
7,759,500
TOTAL MUNICIPAL BONDS
(Cost $371,250,370) 382,803,127
MUNICIPAL NOTES (B) - 2.7%
FLORIDA - 2.7%
Brevard County School Dist. TAN
4.20% 6/30/97 MIG 1 2,000,000 2,000,460
Broward County Hsg. Fin. Auth. Multi-Family
Hsg. Rev. (Sanctuary Apts. Proj.) Series 1985
3.05% LOC PNC Bank, NA, VRDN VMIG 1 500,000 500,000
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Children's Hosp. Proj.) 3.40%
(AMBAC Insured) VRDN A-1+ 1,200,000 1,200,000
Dade County Ind. Dev. Auth. (Florida Pwr. & Lt.
Proj.) Series 1993, 3.40%, VRDN VMIG 1 1,200,000 1,200,000
Dade County Wtr. & Swr. Sys. Rev. 3.90%
(FGIC Insured) (BPA Ind. Bank of Japan)
VRDN VMIG 1 2,005,000 2,005,000
Florida Board of Ed. Cap. Outlay Participating
VRDN, Series SG-22, 3.15% (Liquidity Facility
Societe Generale) Aa 400,000 400,000
Hillsborough County Ind. Dev. Auth. Poll. Cont.
Rev. Rfdg. (Tampa Electric Co. Gannon Coal
Proj.) Series 1992, 4.45%, VRDN VMIG 1 1,400,000 1,400,000
Martin County Poll. Cont. Rev. Rfdg. (Florida
Pwr. & Light Co. Proj.) Series 1994, 3.40%,
VRDN A-1 1,000,000 1,000,000
Pasco County Hsg. Fin. Auth. Multi-Family Hsg.
Rev. (Carlton Arms of Magnolia Valley) Series
1985, 4.125%, LOC Bankers Trust Co.,VRDN VMIG 500,000 500,000
Pinellas County Health Facs. Auth. Rev. (Pooled
Hosp. Loan Prog.) 3.40%, LOC Chase
Manhattan Bank, VRDN VMIG 1 400,000 400,000
TOTAL MUNICIPAL NOTES
(Cost $10,605,851) 10,605,460
TOTAL INVESTMENTS - 100%
(Cost $381,856,221) $ 393,408,587
SECURITY TYPE ABBREVIATIONS
TAN - Tax Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
2. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
3. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
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 $1,321,875 or 0.3% of net
assets.
6. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 81.0% AAA, AA, A 85.3%
Baa 7.4% BBB 5.6%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 3.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Electric Revenue 16.9%
Health Care 13.9
Transportation 13.5
Water and Sewer 12.0
General Obligation 11.3
Special Tax 10.0
Resource Recovery 8.1
Escrowed/Pre-Refunded 7.1
Others (individually less than 5%) 7.2
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1997, the aggregate cost of investment securities for income tax
purposes was $381,863,878. Net unrealized appreciation aggregated
$11,544,709, of which $12,248,904 related to appreciated investment
securities and $704,195 related to depreciated investment securities.
At November 30, 1996, the fund had a capital loss carryforward of
approximately $1,277,000 which will expire on November 30, 2003.
At November 30, 1996, the fund was required to defer approximately $304,000
of losses on futures contracts.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $381,856,221) - $ 393,408,587
See accompanying schedule
Receivable for investments sold 15,254,609
Interest receivable 5,318,957
TOTAL ASSETS 413,982,153
LIABILITIES
Payable to custodian bank $ 140,879
Payable for investments purchased: 22,765,752
Delayed delivery
Payable for fund shares redeemed 242,375
Distributions payable 599,200
Accrued management fee 181,574
Other payables and accrued expenses 22,031
TOTAL LIABILITIES 23,951,811
NET ASSETS $ 390,030,342
Net Assets consist of:
Paid in capital $ 378,801,286
Accumulated undistributed net realized gain (loss) (323,310)
on investments
Net unrealized appreciation (depreciation) on 11,552,366
investments
NET ASSETS, for 35,102,788 shares outstanding $ 390,030,342
NET ASSET VALUE, offering price and redemption price $11.11
per share ($390,030,342 (divided by) 35,102,788 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 10,620,156
EXPENSES
Management fee $ 1,063,949
Non-interested trustees' compensation 3,384
Total expenses before reductions 1,067,333
Expense reductions (2,809) 1,064,524
NET INTEREST INCOME 9,555,632
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,482,992
Futures contracts (126,046) 1,356,946
Change in net unrealized appreciation (depreciation) on:
Investment securities (5,502,791)
Futures contracts (91,585) (5,594,376)
NET GAIN (LOSS) (4,237,430)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 5,318,202
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED MAY 31, NOVEMBER 30,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 9,555,632 $ 19,404,554
Net interest income
Net realized gain (loss) 1,356,946 2,687,336
Change in net unrealized appreciation (depreciation) (5,594,376) (966,203)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,318,202 21,125,687
FROM OPERATIONS
Distributions to shareholders (9,555,632) (19,404,554)
From net interest income
From net realized gain - (177,944)
TOTAL DISTRIBUTIONS (9,555,632) (19,582,498)
Share transactions 29,653,918 55,831,105
Net proceeds from sales of shares
Reinvestment of distributions 5,921,937 12,253,000
Cost of shares redeemed (32,449,387) (74,511,282)
Redemption fees 11,241 23,440
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,137,709 (6,403,737)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,099,721) (4,860,548)
NET ASSETS
Beginning of period 391,130,063 395,990,611
End of period $ 390,030,342 $ 391,130,063
OTHER INFORMATION
Shares
Sold 2,675,653 5,063,476
Issued in reinvestment of distributions 535,043 1,112,117
Redeemed (2,931,374) (6,776,104)
Net increase (decrease) 279,322 (600,511)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED NOVEMBER 30, MARCH, 16, 1992
ENDED (COMMENCEMEN
MAY 31, 1997 T
OF OPERATIONS)
TO
NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 E 1993 1992
</TABLE>
<ERROR: WIDE TABLE>
ERROR: The Following Table: "Assets" is Too Wide!
Table Width is 137 characters.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.230 $ 11.180 $ 9.740 $ 11.290 $ 10.520 $
10.000
Income from Investment Operations .272 .546 .573 .587 .615
.459
Net interest income
Net realized and unrealized gain (loss) (.120) .054 1.439 (1.352) .777
.514
Total from investment operations .152 .600 2.012 (.765) 1.392
.973
Less Distributions
From net interest income (.272) (.546) (.573) (.587) (.615)
(.459)
From net realized gain - (.005) - (.200) (.010) -
Total distributions (.272) (.551) (.573) (.787) (.625)
(.459)
Redemption fees added to paid in capital .000 .001 .001 .002 .003
.006
Net asset value, end of period $ 11.110 $ 11.230 $ 11.180 $ 9.740 $ 11.290 $
10.520
TOTAL RETURN B 1.39% 5.59% 21.09% (7.19) 13.52%
9.94%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 390,030 $ 391,130 $ 395,991 $ 335,551 $ 428,367 $
237,109
Ratio of expenses to average net assets .55% .55% .55% .54% .25%
.03% A
A C C , C
Ratio of expenses to average net assets after expense reductions .55% .54% .55% .54% .25%
.03% A
A D
Ratio of net interest income to average net assets 4.92% 4.96% 5.37% 5.49% 5.52%
6.25% A
A
Portfolio turnover rate 25% 28% 65% 49% 50% 38%
A
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE 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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and capital
gains (the profits earned upon the sale of securities that have grown in
value), 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 MAY 31, 1997 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
Spartan Florida Municipal 1.59% 3.17% 14.91%
Money Market Fund
All Tax-Free Money Market 1.52% 3.01% 13.39%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on August 24, 1992. For example, if you had invested $1,000 in a
fund that had a 5% return over the past year, the value of your investment
would be $1,050. To measure how the fund's performance stacked up against
its peers, you can compare it to the all tax-free money market funds
average, which reflects the performance of mutual funds with similar
objectives tracked by IBC Financial Data, Inc. The past six months average
represents a peer group of 425 mutual funds. (The periods covered by the
IBC Financial Data, Inc. numbers are the closest available match to those
covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal 3.17% 2.95%
Money Market Fund
All Tax-Free Money Market 3.01% 2.68%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/2/97 3/3/97 12/2/96 9/2/96 5/27/96
Spartan Florida Municipal 3.40% 3.01% 3.19% 3.12% 3.27%
Money Market Fund
All Tax-Free Money Market 3.27% 2.87% 3.05% 2.96% 3.12%
Funds Average
Spartan Florida Municipal 5.31% 4.70% 4.98% 4.88% 5.11%
Money Market Fund -
Tax-equivalent
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
1997 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
NOTE TO SHAREHOLDERS:
Scott Orr became Portfolio Manager of Spartan Florida Municipal Money
Market Fund on April 1, 1997.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS, SCOTT?
A. At the beginning of the period, the market had become complacent with
the Federal Reserve Board's monetary policy. At that time, the economy was
growing at a moderate pace and inflation remained well under control. The
Fed had stayed on the sidelines, keeping the rate banks charge each other
for overnight loans - known as the fed funds rate - steady at 5.25% since
January 1996. In February and March 1997, however, signs that the economy
was growing at a stronger clip changed market sentiment. Expectations of a
rate increase culminated in the Fed's announcement at its March 25 Open
Market Committee meeting that it had increased the fed funds rate by 0.25%
to 5.50%. From the end of March through the end of the period, yields in
the market reflected a strong belief that the Fed would continue to raise
rates. Although many in the market expected a rate increase at its May
meeting, the Fed decided to hold off because economic growth had moderated
again and inflation was still benign. Despite the weaker pace of growth at
the end of the period, the market continued to look for higher rates, but
perhaps over a more protracted time frame.
Q. WHAT WAS THE FUND'S STRATEGY IN THIS ENVIRONMENT?
A. The environment was one in which we expected rates to be higher in the
ensuing months. As a result, part of our strategy was to invest in variable
rate securities because they move up or down with changes in interest
rates. At the same time, we sought to buy fixed-rate notes when they were
expected to provide higher yields than variable rate securities over the
terms of the notes.
Q. WERE THERE OTHER FACTORS THAT AFFECTED THE STRATEGY?
A. Yes. A significant amount of assets typically come into the fund at the
end of December each year because it provides a unique tax shelter against
the Florida intangible tax. In the past, this flood of cash into the fund
has made it difficult to keep it fully invested in Florida securities. This
year, Fidelity made a concerted effort to contact shareholders and request
that they invest their money a bit earlier than in the past. This campaign
proved to be very successful. As a result of receiving the added inflows
earlier, the fund was able to purchase more Florida securities at
attractive levels that we were happy to hold over the year-end period. We
look forward to pursuing a similar approach in the future.
Q. HOW DID THE FUND PERFORM?
A. Spartan Florida Municipal Money Market Fund's seven-day yield on May 31,
1997, was 3.43%, compared to 3.18% six months ago. The latest yield was the
equivalent of a 5.36% taxable rate of return for Florida investors in the
36% federal tax bracket. Through May 31, 1997, the fund's six-month total
return was 1.59%, compared to 1.52% for the all tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. Even though there has been some recent moderation in the economy, I
believe there will be enough sustained strength to encourage the Fed to
raise rates over the next six to nine months. At this point, the main
question is when the increases will come. As such, I believe the markets
will look much like they did last year, as investors look at statistics
week by week to try to discern the strength of the economy, the outlook for
inflation and, hence, Fed policy.
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,
while maintaining a stable $1
share price by investing in
high-quality, short-term
municipal money market
securities
FUND NUMBER: 428
TRADING SYMBOL: FSFXX
START DATE: August 24, 1992
SIZE: as of May 31, 1997,
more than $394 million
MANAGER: Scott Orr, since
April 1997; manager, various
Fidelity and Spartan
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,
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.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND % OF FUND % OF FUND
ASSETS ASSETS ASSETS
5/31/97 11/30/96 5/31/96
0 - 30 73 75 75
31 - 90 16 9 10
91 - 180 7 6 13
181 - 397 4 10 2
WEIGHTED AVERAGE MATURITY
5/31/97 11/30/96 5/31/96
Spartan Florida Municipal 31 days 46 days 36 days
Money Market Fund
All Tax-Free Money Market 38 days 52 days 42 days
Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Row: 1, Col: 1, Value: 4.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 3, Value: 16.0
Row: 1, Col: 4, Value: 13.0
Row: 1, Col: 5, Value: 61.0
Row: 1, Col: 1, Value: 3.0
Row: 1, Col: 2, Value: 9.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 20.0
Row: 1, Col: 5, Value: 60.0
Variable rate
demand notes
(VRDNs) 61%
Commercial paper
(including
CP mode) 13%
Tender bonds 16%
Municipal
notes 6%
Other 4%
Variable rate
demand notes
(VRDNs) 60%
Commercial paper
(Including
CP mode) 20%
Tender bonds 8%
Municipal
notes 9%
Other 3%
* SOURCE: IBC'S MONEY FUND SOURCE(registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
DELAWARE - 0.2%
Delaware Econ. Dev. Auth. Exempt Facs. Rev. (Delmarva
Pwr. & Lt. Co. Proj.) Series 1988, 4.15%, VRDN (b) $ 600,000 $ 600,000
FLORIDA - 97.9%
Alachua County Health Facs. Auth. Rev. Bonds
(Academic Research Proj.) Series1989, 3.85%
7/15/97, LOC Barnett Bank, CP mode 6,250,000 6,250,000
Arcadia Hosp. Rev. (Desoto Memorial Hosp.) Series 1994,
3.95%, LOC First Union Bank of Florida, VRDN 4,615,000 4,615,000
Brevard Hsg. Auth. Rev. (Palm Place Hsg. Proj.) Series 1985,
4%, LOC Chase Manhattan Bank, VRDN 1,560,000 1,560,000
Brevard County School Dist. TAN 4.20% 6/30/97 10,000,000 10,004,111
Broward County Hsg. Fin. Auth. Multi-Family Hsg. Rev.:
(Palm Aire-Oxford Proj.) Series 1990, 4.20%
(Continental Casualty Co. Guaranteed) VRDN 1,800,000 1,800,000
(Town of Jacaranda) 4%, LOC Southtrust Bank, VRDN 7,400,000 7,400,000
Broward County Ind. Dev. Auth.:
(Femc & Fast Industries, Inc.) 4%, LOC SunTrust
Bank of South Florida, VRDN (b) 1,500,000 1,500,000
(Heico Aerospace Corp. Proj.) 4%, LOC SunTrust
Bank of South Florida, VRDN (b) 1,000,000 1,000,000
(Rib Associates Proj.) Series 1989, 4%, LOC
SunTrust Bank, Orlando, VRDN (b) 1,280,000 1,280,000
Clay County Hsg. Fin. Auth. Participating VRDN,
Series PT-61, 4.10%, LOC Bayerische Hypotheken (b)(c) 3,740,000 3,740,000
Dade County Cap. Asset Allocation Spl. Oblig. Series 1990,
4.30%, LOC Sanwa Bank Ltd., VRDN 1,300,000 1,300,000
Dade County Hsg. Fin. Auth. Bonds:
Series 1995 B, 4.05% tender 6/12/97 (Liquidity Facility
Bank of America) (c)(f) 12,500,000 12,500,000
4% tender 10/1/97 (FGIC Insured) (b) 5,000,000 5,000,000
Dade County Wtr. & Swr. Sys. Rev. Participating VRDN,
Series SG-74, 4.10% (Liquidity Facility Societe
Generale) (c) 9,845,000 9,845,000
Dade County Ind. Dev. Auth. Rev.:
(Guastafeste Proj.):
Series 1987, 4%, LOC SunTrust Bank, Orlando,
VRDN (b) 2,995,000 2,995,000
Series 1991, 4%, LOC SunTrust Bank, Miami,
VRDN (b) 1,260,000 1,260,000
(Royal Store Fixtures Corp. Proj.) 4%, LOC SunTrust Bank,
Miami, VRDN (b) 2,260,000 2,260,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Multi-Family Hsg. Rev. (Biscayne View Apts.
Proj.) Series 1993, 4.20% (Commonwealth Life
Insurance Co. Guaranteed) VRDN (b) $ 27,000,000 $ 27,000,000
Duval County Hsg. Fin. Auth. Rev. (Lakes of Mayport
Apts.) Series 1985 F, 4%, LOC SunTrust Bank,
Atlanta, VRDN 1,300,000 1,300,000
Escambia County Hsg. Fin. Auth. Participating VRDN,
4.10% (Liquidity Facility Merrill Lynch & Co., Inc.) (b)(c) 2,000,000
2,000,000
Escambia County Poll. Cont. Rev. Rfdg. (Monsanto
Co. Proj.) Series 1994, 4%, VRDN 4,775,000 4,775,000
Escambia County Rev. Rfdg. (Pacer Industries) Series 1991,
3.95%, LOC SunTrust Bank, Atlanta, VRDN 1,400,000 1,400,000
Escambia County Solid Waste Disp. Rev. (Monsanto
Co. Proj.) Series 1993, 4.15%, VRDN (b) 5,300,000 5,300,000
Florida Board of Ed.:
Admin. Cap. Outlay (Pub. Ed.):
Bonds:
Series A, 4.75% 1/1/98 2,750,000 2,768,155
Series B, 3.50% 6/1/97 2,750,000 2,750,000
Participating VRDN, Series 1995 SG-22, 4.05%
(Liquidity Facility Societe Generale) (c) 4,570,000 4,570,000
Participating VRDN, Series 96C 0905, 4.06%
(Liquidity Facility Citibank, NA) (c) 9,500,000 9,500,000
Florida Dept. of Environmental Protection Preservation 2000
Rev. Bonds Series 1995 A, 5% 7/1/97 (AMBAC Insured) 3,310,000 3,313,918
Florida Dept. of Trans.:
Participating VRDN, 4.05% (Liquidity Facility Societe
Generale) (c) 13,010,000 13,010,000
Right of Way Bonds 6.875% 7/1/97 2,265,000 2,270,662
Florida Hsg. Fin. Agcy. Rev.:
(Ashley Lake Park II Proj.) Series 1989 J, 4%,
LOC Barclays Bank, VRDN (b) 1,100,000 1,100,000
(Banyan Bay Apts. Proj.) 4.25%, LOC PNC Bank,
Kentucky, VRDN (b) 5,275,000 5,275,000
(Heron Parkway Proj.) 4%, LOC NationsBank,
NA, VRDN (b) 3,300,000 3,300,000
(Oaks at Mill Creek Proj.) Series 1985, 3.95%,
LOC Chase Bank, VRDN 2,000,000 2,000,000
Multi-Family Hsg. Rev. Rfdg.:
(Brandon-Oxford Proj.) Series 1990 C, 4.20%
(Continental Casualty Co. Guaranteed) VRDN 7,800,000 7,800,000
(Hillsborough-Oxford Proj.) Series D, 4.20%
(Continental Casualty Co. Guaranteed) VRDN 5,590,000 5,590,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Local Gov't. Fin. Commission Series A, CP:
3.50% 6/9/97 LOC First Union Nat'l Bank of Florida $ 1,500,000 $ 1,500,000
3.50% 6/10/97 LOC First Union Nat'l Bank of Florida 5,000,000 5,000,000
3.90% 7/9/97 LOC First Union Nat'l Bank of Florida 1,700,000 1,700,000
3.75% 7/17/97 LOC First Union Nat'l Bank of Florida 3,380,000 3,380,000
Florida Municipal Pwr. Agcy. Series A, 3.90% 7/16/97,
LOC First Union Nat'l Bank of North Carolina, CP 1,000,000 1,000,000
Florida Port Fin. Auth. Commission Rev. Bonds 4% 6/1/97
(MBIA Insured) (b) 2,120,000 2,120,000
Gulf Breeze Rev. Series 1995 A, 4%, LOC Barnett Bank,
VRDN 4,000,000 4,000,000
Highlands County Health Facs. Auth Rev. (Adventist
Health Sys. Sunbelt Proj.):
3.95% (Capital Markets Assurance Corp. Insured)
(BPA First Union Nat'l Bank of Chicago) VRDN 3,600,000 3,600,000
Series 1996 A, 3.90%, LOC SunTrust Bank, VRDN 3,845,000 3,845,000
Hillsborough County Ind. Dev. Rev. (Vigo Importing Proj.):
4.15%, LOC NationsBank, NA, VRDN (b) 1,505,000 1,505,000
4.25%, LOC Barnett Bank, Tampa, VRDN (b) 1,400,000 1,400,000
Hillsborough County Aviation Auth. Rev.
(Tampa Int'l Arpt.) CP:
3.70% 7/16/97, LOC NationsBank Westminster Bank,
PLC (b) 5,100,000 5,100,000
3.70% 7/17/97, LOC NationsBank Westminster Bank,
PLC (b) 2,300,000 2,300,000
3.70% 7/17/97, LOC NationsBank Westminster Bank,
PLC (b) 2,200,000 2,200,000
3.85% 7/15/97, LOC National Westminster Bank,
PLC (b) 5,300,000 5,300,000
3.85% 7/18/97, LOC National Westminster Bank,
PLC (b) 3,600,000 3,600,000
Indian River County Hosp. Dist. Rev. Bonds Series 1988:
3.70% 7/17/97, LOC Kredietbank NV, CP mode 2,600,000 2,600,000
3.80% 7/18/97, LOC Kredietbank NV, CP mode 4,350,000 4,350,000
Jacksonville Elec. Auth. Participating VRDN, Series PA-1008,
3.95% (Liquidity Facility Merrill Lynch & Co., Inc.) (c) 3,460,000
3,460,000
Jacksonville Health Facs. Rev. (Faculty Practice Assoc.) 4%
LOC NationsBank, NA, VRDN 2,000,000 2,000,000
Jacksonville Health Fac. Auth. Participating VRDN,
Series 1996 M, 3.95% (Liquidity Facility
Caisse des Depots et Cosignations) (c) 12,000,000 12,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Hosp. Rev. (Univ. Med. Ctr.):
Series 1988, 4.05%, LOC Sumitomo Bank Ltd., VRDN $ 5,100,000 $ 5,100,000
Series 1989, 4.05%, LOC Sumitomo Bank Ltd., VRDN 4,900,000 4,900,000
Jacksonville Ind. Dev. Rev.:
(Samuel C. Taylor Foundation Proj.) Series 1987,
4.05%, LOC Barnett Bank of Jacksonville, VRDN 4,900,000 4,900,000
Rfdg. (Pavilion Assoc. Proj.) Series 1996, 4%,
LOC Barnett Bank, NA, VRDN 2,150,000 2,150,000
Lee County Hsg. Fin. Auth. Bonds Series 1997 A,
3.70% tender 9/15/97 (b) 5,000,000 5,000,000
Liberty County Ind. Dev. Rev. (Timber Energy Resources Inc.
Proj.) Series 1994, 4.05%, LOC Bank of Montreal, VRDN 5,300,000 5,300,000
Manatee County Hsg. Fin. Auth. (Harbor Pointe Proj.)
Series 1990 A, 4.10%, LOC Marine Midland Bank,
NA, VRDN 1,000,000 1,000,000
Monroe County School Dist. RAN 4.25% 12/17/97 1,000,000 1,001,831
Okeechobee County Solid Waste Rev. (Chambers Waste Sys.
of Florida Proj.) Series 1992, 4.05%, LOC Morgan
Guaranty Trust, VRDN (b) 9,000,000 9,000,000
Orange County Health Fac. Auth. Participating VRDN, Series
PA-95, 4.05% (Liquidity Facility Merrill Lynch & Co.) (c) 3,985,000
3,985,000
Orange County Hsg. Fin. Auth. Multi-Family Hsg. Rev.
(Regal Pointe Apts.) Series 1997 A, 4.10%, LOC
NationsBank, NA, VRDN 5,893,000 5,893,000
Orange County Ind. Dev. Board (Central Florida Blood Bank
Proj.) Series 1988, 3.95%, LOC SunTrust Bank, Orlando,
VRDN 1,145,000 1,145,000
Orange County School Dist. RAN Series A, 4.25% 1/15/98 7,500,000
7,513,556
Orlando Util. Commission Participating VRDN,
Series SG-18, 4.05% (Liquidity Facility
Societe Generale) (c) 4,365,000 4,365,000
Orlando Waste Wtr. System Rev. Rfdg. Bonds Series 1990 A,
3.75% 7/10/97 (Liquidity Facility Union Bank of
Switzerland) CP mode 2,400,000 2,400,000
Palm Beach County Hsg. Fin. Auth. (Lake Crystal Apts. Proj.
Phase II) Series 1988 A, 4%, LOC Citibank, VRDN (b) 1,785,000 1,785,000
Palm Beach County School Dist. TAN Series 1996,
4.50% 9/26/97 5,250,000 5,260,562
Pasco County Hsg. Fin. Auth. Multi-Family Hsg. Rev. (Carlton
Arms of Magnolia Valley) Series 1985, 4.075%, LOC
Bankers Trust Co., VRDN 1,500,000 1,500,000
Pensacola Rev. (Harborview Corp. Proj.) 4.05%, LOC
AmSouth Bank, NA, Alabama, VRDN 2,865,000 2,865,000
Pinellas Capital Impt. Rev. Bonds 5.40% 10/1/97 2,820,000 2,836,514
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Pinellas County Hsg. Fin. Auth. Single Family Mtg. Rev.
Bonds 3.80% tender 2/1/98 $ 5,000,000 $ 5,000,000
Pinellas County Ind. Dev. Auth. Ind. Dev. Rev.
(Hunter Douglas Inc.) 4%, LOC ABN-AMRO
Bank NV, VRDN (b) 2,100,000 2,100,000
Plant City (South Baptist Hosp. Proj.) Series 1993, 4.05%
LOC Barnett Bank of Tampa, VRDN (b) 4,600,000 4,600,000
Putnam County Dev. Auth. Poll. Cont. Rev. Bonds
(Seminole Elec. Coop.) :
Series 1984 D, 3.45% tender 6/15/97 (Nat'l Rural
Utils. Coop-CFC Guaranteed) 21,265,000 21,265,000
Series 1984 H-3, 3.55% tender 9/15/97 (Nat'l Rural
Utils. Coop-CFC Guaranteed) 9,750,000 9,750,000
Sarasota County Public Hosp. Dist. Bonds (Sarasota Memorial
Hosp.) Series 1991, 3.85% 7/11/97 (Liquidity
Facility Goldman Sachs & Co.) CP mode 4,000,000 4,000,000
Sunrise Util. Sys. Rev. Participating VRDN (c):
Series SG-16, 4% (Liquidity Facility Societe Generale) 4,330,000
4,330,000
Series SG-17, 4% (Liquidity Facility Societe Generale) 2,325,000
2,325,000
West Orange Memorial Hosp. Tax Dist. Rev. Bonds
Series 1991 A1, 3.75% 7/8/97, LOC
Robobank Nederland, CP mode 1,000,000 1,000,000
383,562,309
LOUISIANA - 0.3%
Louisiana Pub. Facs. Auth. Health Care Sys. (Sisters of
Charity of the Incarnate Word) Bonds 3.75%, 6/30/97
(BPA Credit Suisse First Boston Bank) CP mode 1,200,000 1,200,000
NEVADA - 0.6%
Clark County Spl. Facs. Arpt. Rev. Bonds (Signature Flight
Support Corp. Proj.) Series 97 A, 3.70% tender 6/2/97,
LOC Bayerische Landesbank 1,000,000 1,000,000
Washoe County Gas Fac. Rev. (Sierra Pacific Pwr. Co.)
Series 1990, 4.25%, LOC Union Bank of Switzerland,
VRDN (b) 1,500,000 1,500,000
2,500,000
TEXAS - 0.8%
Brazos River Auth. Poll. Cont. Rev. Rfdg. (Texas Util. Elec. Co.)
Series 1995 C, 4.25%, LOC Swiss Bank Corp., VRDN (b) 1,800,000 1,800,000
Gulf Coast Waste Disp. Auth. Solid Waste Disp. Rev.
Bonds (Amoco Oil Co. Proj.) Series 1991, 3.80%
tender 10/1/97 1,500,000 1,500,000
3,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
SHARES VALUE (NOTE 1)
OTHER - 0.2%
Municipal Central Cash Fund (d)(e) 600,000 $ 600,000
TOTAL INVESTMENTS - 100% $ 391,762,309
Total Cost for Income Tax Purposes $ 391,762,353
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
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.
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. Information in this report regarding holdings by state and security
types do not reflect the holdings of the Municipal Central Cash Fund. A
listing of the Municipal Central Cash Fund's holdings as of it most recent
fiscal period end is available upon request.
5. At the period end, the seven-day yield of the Municipal Central Cash
Fund was 3.90%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
6. Restricted security - Investment in securities not registered under the
Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on the holding is as follows:
ACQUISITION
SECURITY DATE COST
Dade County Hsg.
Fin. Auth. Bonds
Series 1995 B,
4.05% tender
6/12/97 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.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 391,762,309
See accompanying schedule
Interest receivable 3,219,930
TOTAL ASSETS 394,982,239
LIABILITIES
Payable to custodian bank $ 24,447
Share transactions in process 594,305
Distributions payable 50,803
Accrued management fee 169,844
Other payables and accrued expenses 2,170
TOTAL LIABILITIES 841,569
NET ASSETS $ 394,140,670
Net Assets consist of:
Paid in capital $ 394,194,886
Accumulated net realized gain (loss) on investments (54,216)
NET ASSETS, for 394,194,886 shares outstanding $ 394,140,670
NET ASSET VALUE, offering price and redemption price $1.00
per share ($394,140,670 (divided by) 394,194,886 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 8,832,494
EXPENSES
Management fee $ 1,222,692
Non-interested trustees' compensation 3,454
Total expenses before reductions 1,226,146
Expense reductions (46,388) 1,179,758
NET INTEREST INCOME 7,652,736
NET REALIZED GAIN (LOSS) ON INVESTMENTS (17,107)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,635,629
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED MAY 31, NOVEMBER 30,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 7,652,736 $ 12,342,191
Net interest income
Net realized gain (loss) (17,107) (9,713)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,635,629 12,332,478
FROM OPERATIONS
Distributions to shareholders from net interest income (7,652,736) (12,342,191)
Share transactions at net asset value of $1.00 per share 614,026,881 705,315,091
Proceeds from sales of shares
Reinvestment of distributions from net interest income 7,302,849 11,594,514
Cost of shares redeemed (629,449,544) (678,018,565)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES (8,119,814) 38,891,040
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (8,136,921) 38,881,327
NET ASSETS
Beginning of period 402,277,591 363,396,264
End of period $ 394,140,670 $ 402,277,591
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED NOVEMBER 30, AUGUST 24, 1992
ENDED (COMMENCEMENT
MAY 31, 1997 OF OPERATIONS) TO
NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
Income from .016 .031 .035 .024 .025 .008
Investment
Operations
Net interest
income
Less Distributions
From net interest (.016) (.031) (.035) (.024) (.025) (.008)
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B 1.59% 3.17% 3.57% 2.47% 2.51% .78%
RATIOS AND SUPPLEMENTAL DATA
Net assets, $ 394,141 $ 402,278 $ 363,396 $ 337,530 $ 306,741 $ 49,467
end of period
(000 omitted)
Ratio of expenses to .50% A .50% .50% .46% .18% .00%
average net C C C
assets
Ratio of expenses .48% A, .47% .50% .46% .18% .00%
to average net D D
assets after
expense
reductions
Ratio of net interest 3.12% A 3.15% 3.52% 2.43% 2.48% 2.91%
income to A
average net
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE 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 May 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Florida Municipal Income Fund (the income fund) is a fund of
Fidelity Court Street Trust. Spartan Florida Municipal Money Market Fund
(the money market fund) 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 income 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. Securities (including
restricted securities) for which market quotations are not readily
available are valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the Board
of Trustees. Short-term securities with remaining maturities of sixty days
or less for which quotations are not readily available are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
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
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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
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 per-share 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds may invest in the Municipal
Central Cash Fund (the Cash Fund) managed by FMR Texas, an affiliate of
Fidelity Management & Research Company (FMR). The Cash Fund is an open-end
money market fund available only to investment companies and other accounts
managed by FMR and its affiliates. The Cash Fund seeks preservation of
capital, liquidity, and current income by investing in high-quality,
short-term municipal securities of various states and municipalities.
Income distributions from the Cash Fund are declared daily and paid monthly
from net interest income. Income distributions received by the funds are
recorded as interest income in the accompanying financial statements.
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. Losses may arise
from changes in the value of the underlying instruments, if
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS - CONTINUED
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.
WHEN-ISSUED SECURITIES. Each fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying securities
is fixed at the time the transaction is negotiated. The market values of
the securities purchased on a when-issued or forward commitment basis are
identified as such in each applicable fund's schedule of investments. With
respect to purchase commitments, each fund identifies securities as
segregated in its custodial records with a value at least equal to the
amount of the commitment. The payables and receivables associated with the
purchases and sales of when-issued securities having the same settlement
date and broker are offset. When-issued securities that have been purchased
from and sold to different brokers are reflected as both payables and
receivables in the applicable statements of assets and liabilities under
the caption "Delayed delivery." Losses may arise due to changes in the
market value of the underlying securities, if the counterparty does not
perform under the contract, or if the issuer does not issue the securities
due to political, economic, or other factors.
RESTRICTED SECURITIES. Certain funds are permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. Information regarding
restricted securities is included under the caption "Other Information" at
the end of each applicable fund's schedule of investments.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $60,420,176 and $46,446,781, respectively.
The market value of futures contracts opened and closed during the period
amounted to $23,911,967 and $27,500,336, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays all expenses,
except the compensation of the non-interested Trustees and certain
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. -
CONTINUED
MANAGEMENT FEE - CONTINUED
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.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 collect
certain transaction fees from the funds' shareholders which amounted to
$925 and $3,102 for the period for the income and money market funds,
respectively. Effective April 1, 1997, these transaction fees were
eliminated for the income fund.
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.
5. EXPENSE REDUCTIONS.
In addition, FMR has entered into arrangements on behalf of each fund with
its custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the income and money market fund's expenses
were reduced by $2,809 and $46,388 under these arrangements.
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.
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For directions and hours,
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ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
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 Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
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
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
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 Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
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
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
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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
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Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
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ACCOUNTS
BUYING SHARES
Fidelity Investments
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SELLING SHARES
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P.O. Box 660602
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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, 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
Scott Orr, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates * - INCOME FUND
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy * - INCOME FUND
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
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FIDELITY
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NEW JERSEY
MUNICIPAL
MONEY MARKET
FUND
SEMIANNUAL REPORT
MAY 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of 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 16 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 20 Notes to the financial statements.
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:
Through the first five months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will greatly
reduce your vulnerability to any single decline. We know from experience,
for example, that stock prices have gone up over longer periods of time,
have significantly outperformed other types of investments and have stayed
ahead of inflation.
Second, you can further manage your investing risk through diversification.
A stock mutual fund, for instance, is already diversified, because it
invests in many different companies. You can increase your diversification
further by investing in a number of different stock funds, or in such other
investment categories as bonds. You should also keep money you'll need in
the near future in a more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and capital
gains (the profits earned upon the sale of securities that have grown in
value). 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.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Fidelity New Jersey Municipal 1.47% 2.91% 13.78% 40.73%
Money Market Fund
New Jersey Tax-Free Money Market 1.47% 2.92% 13.88% 42.87%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on March 17, 1988. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the New Jersey tax-free money
market funds average, which reflects the performance of mutual funds with
similar objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 13 mutual funds. (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 MAY 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity New Jersey Municipal 2.91% 2.62% 3.78%
Money Market Fund
New Jersey Tax-Free Money Market 2.92% 2.63% 3.97%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/2/97 3/3/97 12/2/96 9/2/96 5/27/96
Fidelity New Jersey Municipa 3.17% 2.75% 2.88% 2.88% 3.10%
l
Money Market Fund
New Jersey Tax-Free 2.93% 2.69% 2.92% 2.81% 3.03%
Money Market Funds
Average
Fidelity New Jersey Municip 5.29% 4.59% 4.81% 4.81% 5.17%
al
Money Market Fund -
Tax-equivalent
Row: 1, Col: 1, Value: 3.17
Row: 1, Col: 2, Value: 2.93
Row: 2, Col: 1, Value: 2.75
Row: 2, Col: 2, Value: 2.69
Row: 3, Col: 1, Value: 2.88
Row: 3, Col: 2, Value: 2.92
Row: 4, Col: 1, Value: 2.88
Row: 4, Col: 2, Value: 2.81
Row: 5, Col: 1, Value: 3.1
Row: 5, Col: 2, Value: 3.03
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 1997 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: Scott Orr became Portfolio Manager of Fidelity New
Jersey Municipal Money Market Fund on April 1, 1997.
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS, SCOTT?
A. At the beginning of the period, the market had become complacent with
the Federal Reserve Board's monetary policy. At that time, the economy was
growing at a moderate pace and inflation remained well under control. The
Fed had stayed on the sidelines, keeping the rate banks charge each other
for overnight loans - known as the fed funds rate - steady at 5.25% since
January 1996. In February and March 1997, however, signs that the economy
was growing at a stronger clip changed market sentiment. Expectations of a
rate increase culminated in the Fed's announcement at its March 25 Open
Market Committee meeting that it had increased the fed funds rate by 0.25%
to 5.50%. From the end of March through the end of the period, yields in
the market reflected a strong belief that the Fed would continue to raise
rates. Although many in the market expected a rate increase at its May
meeting, the Fed decided to hold off because economic growth had moderated
again and inflation was still benign. Despite the weaker pace of growth at
the end of the period, the market continued to look for higher rates, but
perhaps over a more protracted time frame.
Q. WHAT WAS THE FUND'S STRATEGY IN THIS ENVIRONMENT?
A. The environment was one in which we expected rates to be higher in the
ensuing months. As a result, part of our strategy was to invest in
variable-rate securities because they move up or down with changes in
interest rates. At the same time, we sought to buy fixed-rate notes when
they were expected to provide higher yields than variable-rate securities
over the terms of the notes. In the New Jersey market, fixed-rate
instruments often offer a yield advantage over variable-rate notes because
there is much stronger demand for the latter. As a result of focusing more
on longer-term, fixed-rate securities in order to pick up extra yield, the
fund tended to maintain an average maturity in the high-50- to low-60-day
range, moderately longer than its peers.
Q. HOW DID THE FUND PERFORM?
A. Fidelity New Jersey Municipal Money Market Fund's seven-day yield on May
31, 1997, was 3.19%, compared to 2.87% six months ago. The latest yield was
the equivalent of a 5.32% taxable rate of return for New Jersey investors
in the 40.08% combined state and federal income tax bracket. Through May
31, 1997, the fund's six-month total return was 1.47%, the same as the
1.47% return of the New Jersey tax-free money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. Even though there has been some recent moderation in the economy, I
believe there will be enough sustained strength to encourage the Fed to
raise rates over the next six to nine months. At this point, the main
question is when the increases will come. As such, I believe the markets
will look much like they did last year, as investors look at statistics
week by week to try to discern the strength of the economy, the outlook for
inflation and, hence, Fed policy.
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
FUND NUMBER: 417
TRADING SYMBOL: FNJXX
START DATE: March 17, 1988
SIZE: as of May 31, 1997,
more than $469 million
MANAGER: Scott Orr, since
April 1997; manager, various
Fidelity and Spartan
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
5/31/97 11/30/96 5/31/96
0 - 30 65 63 72
31 - 90 16 16 9
91 - 180 6 7 8
181 - 397 13 14 11
WEIGHTED AVERAGE MATURITY
5/31/97 11/30/96 5/31/96
Fidelity New Jersey
Municipal Money Market
Fund 58 days 59 days 50 days
New Jersey Tax-Free
Money Market Funds
Average * 51 days 56 days 53 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Row: 1, Col: 1, Value: 51.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 31.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 51%
Commercial paper
(including CP
mode) 15%
Tender bonds 1%
Municipal
notes 32%
Other 1%
Variable rate
demand notes
(VRDNs) 50%
Commercial paper
(including CP
mode) 15%
Tender bonds 1%
Municipal
notes 33%
Other 1%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 83.8%
Atlantic County Impt. Auth. Rev. (Pooled Gov't. Loan Prog.)
Series 1986, 3.70%, LOC Kredietbank NV, VRDN $ 2,900,000 $ 2,900,000
Belleville Township (Essex County) BAN 3.67% 7/25/97 1,000,000 1,000,171
Bernardsville Borough BAN 4.50% 4/16/98 3,000,000 3,015,889
Bloomingdale BAN 4.25% 3/13/98 1,200,000 1,203,608
Bridgewater Special Assessment BAN 4.25% 5/20/98 1,700,000 1,704,896
Burlington Township (Burlington County) BAN
4% 10/1/97 1,000,000 1,000,880
Camden County Impt. Auth. Rev., VRDN:
(Jewish Commty. Center Proj.) Series 1995, 4%,
LOC Nat'l. Westminster Bank PLC 2,200,000 2,200,000
(Parkview Redev. Hsg. Proj.) 3.85%,
LOC General Electric Capital Corp. (b) 6,000,000 6,000,000
Cape May County BAN 4% 2/27/98 1,000,000 1,000,000
Cedar Grove Township BAN 4% 3/9/98 1,553,000 1,553,000
Clark Township BAN:
3.57% 9/26/97 3,485,600 3,485,814
4.14% 3/26/98 764,500 765,025
Clifton BAN 4.50% 6/26/97 2,500,000 2,500,987
Cranford Township BAN 4% 3/20/98 2,659,051 2,664,170
Delaware River Port Auth. Participating VRDN, Series SG-53,
4% (Liquidity Facility Societe Generale, France) (c) 9,000,000 9,000,000
Denville Board of Ed. BAN 4% 2/19/98 2,000,000 2,004,856
Denville Township BAN 4% 12/26/97 3,908,000 3,917,654
Emerson Borough BAN 4.125% 2/5/98 600,000 601,477
Essex County Impt. Auth. Rev. Series 1995, 3.75% (AMBAC
Insured) (BPA Morgan Guaranty Trust, NY) VRDN 10,500,000 10,500,000
Essex Falls BAN 4% 12/12/97 2,100,000 2,104,520
Fairlawn BAN 4% 12/12/97 3,668,092 3,675,990
Florham Park BAN 4.25% 11/7/97 1,700,000 1,703,562
Freehold Borough BAN 4.25% 2/6/98 1,000,000 1,003,732
Freehold Township BAN 4.125% 10/30/97 1,700,000 1,702,545
Gloucester County Poll. Cont. Fin. Auth. Rev. Rfdg.
(Monsanto Proj.) Series 1992, 3.70%, VRDN 1,500,000 1,500,000
Hamilton Township BAN 4% 9/25/97 3,600,000 3,604,549
Harding Township BAN 4.11% 7/11/97 1,000,000 1,000,114
Hillside BAN 4.50% 8/8/97 2,422,200 2,424,367
Hillside Township BAN 4.25% 3/9/98 1,000,000 1,003,150
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled
Gov't. Loan Prog.) Series 1986, 3.75%,
LOC Comerica Bank - Detroit, VRDN 20,095,000 20,095,000
Hunterdon County BAN 4.50% 5/22/98 6,100,000 6,137,123
Lacey Township BAN 4.50% 4/30/98 700,000 702,574
Lacey Township TAN 4.50% 8/15/97 800,000 800,807
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Lavallette Borough BAN:
4.25% 11/6/97 $ 2,481,900 $ 2,485,782
4% 2/27/98 1,316,750 1,319,191
4.50% 5/1/98 1,000,000 1,004,395
Longbranch BAN 4.25% 12/12/97 1,300,000 1,303,658
Mahwah Township BAN 4.50% 6/26/97 1,400,000 1,400,507
Mendham Township BAN 4.00% 10/7/97 1,300,000 1,301,774
Mercer County BAN 4.50% 6/17/97 8,135,000 8,137,187
Metuchen BAN 4.09% 10/3/97 500,000 500,146
Monmouth County Impt. Auth. Rev. (Pooled Gov't.
Loan Prog.) Series 1986, 3.75%,
LOC Union Bank of Switzerland, VRDN 15,050,000 15,050,000
Montclair BAN:
4.50% 6/27/97 1,483,000 1,483,559
4% 1/23/98 2,000,000 2,003,689
Mount Olive Township BAN 3.875% 10/15/97 2,400,000 2,401,950
Neptune Township BAN 4.50% 7/23/97 1,600,000 1,600,546
New Jersey Econ. Dev. Auth. Econ. Dev. Rev., VRDN:
Rfdg. (RJB Associates 1983 Proj.) 3.90%,
LOC PNC Bank NA 500,000 500,000
(AVP Realty Holdings, Inc.) Series 1989 A,
4%, LOC PNC Bank NA (b) 1,050,000 1,050,000
(Assoc. for Retarded Citizens) Series 1989 CC, 3.90%,
LOC PNC Bank NA 1,000,000 1,000,000
(Catholic Community Svcs.) Series 1995, 3.75%,
LOC First Union Nat'l. Bank 1,250,000 1,250,000
(Composite Issue A-C & E-L) Series 1989 E, 3.90%,
LOC PNC Bank NA 200,000 200,000
(Guttenplan's Bakery) Series 1989 G, 4%,
LOC PNC Bank NA (b) 600,000 600,000
(Hirsh Enterprises) Series 1989 II, 4%,
LOC PNC Bank NA (b) 350,000 350,000
(J.W. Holding Group) Series 1989 GG, 4%,
LOC PNC Bank NA (b) 550,000 550,000
(M & S Realty) Series 1988 N, 4%,
LOC PNC Bank NA (b) 750,000 750,000
(PVC Container Corp.) Series 1987 D, 4.10%,
LOC Nat'l. Westminster Bank PLC (b) 1,235,000 1,235,000
New Jersey Econ. Dev. Auth. Econ. Growth Rev. Series F,
3.85%, LOC Fleet Bank, VRDN 750,000 750,000
New Jersey Econ. Dev. Auth. First Mtg. Rev.
(Franciscan Oaks Proj.) Series 1992 B, 3.75%,
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) 10,000,000 10,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Ind. & Econ. Dev. Rev.
(Casa DiBertacchi Corp. Facs.) Series 1988, 4%,
LOC Marine Midland Bank, VRDN (b) $ 800,000 $ 800,000
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Hoffman-La Roche Proj.) Series 1985, 3.85%,
LOC Wachovia Bank of North Carolina, VRDN 3,000,000 3,000,000
New Jersey Econ. Dev. Auth. Rev.:
Bonds (b):
(Chambers Cogeneration LTP) Series 1991:
3.65%, CP mode 7/11/97, LOC Swiss Bank Corp. 6,700,000 6,700,000
3.50%, CP mode 7/14/97, LOC Swiss Bank Corp. 19,200,000 19,200,000
(Keystone Proj.) Series 1992:
3.45%, CP mode 6/10/97,
LOC Union Bank of Switzerland 5,000,000 5,000,000
3.65%, CP mode 7/11/97,
LOC Union Bank of Switzerland 3,000,000 3,000,000
3.50%, CP mode 7/14/97,
LOC Union Bank of Switzerland 3,000,000 3,000,000
VRDN:
(500 International Dr. Partners Proj.) Series 1995,
3.45%, LOC First Union Nat'l. Bank 2,800,000 2,800,000
(Paterson Composite):
Series B, 3.90%, LOC Chase Manhattan Bank (b) 2,000,000 2,000,000
Series C, 3.90%, LOC Chase Manhattan Bank (b) 400,000 400,000
(Peddie School Proj.) 3.75% (BPA PNC Bank NA) 500,000 500,000
(Philly Venture Fund) Series 1988 P, 3.90%,
LOC PNC Bank NA 950,000 950,000
New Jersey Gen. Oblig. Participating VRDN (c):
Series BT-104, 4%
(Liquidity Facility Bankers Trust Company, NY) 2,500,000 2,500,000
Series SG-48, 4%
(Liquidity Facility Societe Generale, France) 4,000,000 4,000,000
Series 1995-CB1, 4.05%
(Liquidity Facility Chase Manhattan Bank) 5,900,000 5,900,000
Series 1997 L, 4%
(Liquidity Facility Caisse des Depots et Consignations) 4,600,000
4,600,000
New Jersey Health Care Facs. Fing. Auth. Rev. (Hosp. Cap.
Asset Fing. Prog.) Series 1985 B, 3.65%,
LOC Chase Manhattan Bank, VRDN 8,100,000 8,100,000
New Jersey Higher Ed. Assistance Auth. Student Loan Rev.
Bonds Series 1997 B, 3.90%, tender 6/1/98
(MBIA Insured) (BPA Landesbank Hessen - Thurgingen) (b) 1,600,000
1,600,000
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c):
Series 1994 C-3003, 4.16% (MBIA Insured)
(Liquidity Facility Citibank, NA) 6,800,000 6,800,000
Series 1994 C-3004, 4.01% (MBIA Insured)
(Liquidity Facility Citibank, NA) 3,500,000 3,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN (c): - continued
Series 1996 F, 3.94%
(Liquidity Facility Bank of America) $ 5,310,000 $ 5,310,000
Series PA-117, 4%
(Liquidity Facility Merrill Lynch & Co., Inc.) (b) 4,580,000 4,580,000
Series PT-92, 4.05%
(Liquidity Bayerische Hypotheken - und Weschel) (b) 5,300,000
5,300,000
New Jersey Sports and Exposition Auth. Rev., Series 1992 C,
3.65% (MBIA Insured) (BPA Barclays Bank, PLC) VRDN 12,700,000 12,700,000
New Jersey Tax and Rev. Series 1997 A, CP:
3.80% 6/9/97
(Liquidity Facility Union Bank of Switzerland) 2,300,000 2,300,000
3.65% 6/10/97
(Liquidity Facility Union Bank of Switzerland) 3,000,000 3,000,000
3.40% 6/11/97
(Liquidity Facility Union Bank of Switzerland) 2,000,000 2,000,000
3.65% 6/12/97
(Liquidity Facility Union Bank of Switzerland) 7,000,000 7,000,000
3.70% 6/12/97
(Liquidity Facility Union Bank of Switzerland) 10,000,000 10,000,000
4% 6/13/97
(Liquidity Facility Union Bank of Switzerland) 4,000,000 4,000,000
New Jersey Trans. Sys. Auth. Bond 5% 6/15/97 2,805,000 2,806,255
New Jersey Turnpike Auth. Turnpike Rev., Series 1991 D,
3.20% (FGIC Insured)
LOC Societe Generale, France, VRDN 800,000 800,000
Newark Gen. Impt. Gen. Oblig. Bonds 5%
10/1/97 (MBIA Insured) 679,000 682,043
North Brunswick BAN 4.50% 8/29/97 3,000,000 3,004,364
North Plainfield BAN 4.50% 6/20/97 1,786,132 1,786,534
Nutley BAN 4% 7/31/97 1,092,500 1,093,333
Ocean City BAN:
4.50% 6/12/97 2,200,000 2,200,350
4.25% 4/3/98 3,900,000 3,911,505
Ocean County BAN 4.25% 6/20/97 2,300,000 2,300,426
Passaic County BAN:
4.10% 9/26/97 1,130,000 1,131,757
4.50% 4/3/98 6,000,000 6,029,527
Passaic County Utils. Auth. Solid Waste Sys. Rev. Proj. BAN
Series B, 3.95% 9/3/97 (MBIA Insured) 600,000 600,000
Pennington BAN 4.50% 6/27/97 500,000 500,171
Pennsauken Township BAN 4.10% 9/26/97 1,900,000 1,900,171
Pequannock Township BAN 4% 12/4/97 1,000,000 1,001,717
Roselle Park BAN 4.50% 10/16/97 1,322,000 1,325,007
Salem County Ind. Poll. Cont. Fing. Auth. Poll. Cont. Rev.
Bonds (Philadelphia Elec. Co.) Series 1993 A,
3.45%, CP mode 6/10/97,
LOC Toronto Dominion Bank (b) 4,600,000 4,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Salem County Poll. Cont. Fin. Auth. Poll. Cont. Rfdg. Rev.
(Pub. Svc. Elec. & Gas) Series 1997 A, 3.70%
(MBIA Insured) (BPA Swiss Bank Corp.) VRDN (b) $ 3,000,000 $ 3,000,000
Somerset County Ind. Poll. Cont. Fing. Auth. Rev.
(Minnesota Mining & Manufacturing 3M) Series 1982,
3.90%, VRDN 600,000 600,000
Sussex County BAN 4% 2/10/98 4,000,000 4,009,381
Upper Freehold BAN 4.50% 10/16/97 740,000 741,522
Vernon Township Board of Ed. BAN 4.25% 12/5/97 2,250,000 2,256,329
Verona Township BAN 4.10% 11/19/97 1,523,000 1,525,890
Voorhees BAN 4.50% 8/6/97 920,000 920,880
Wall Township BAN:
4.50% 6/26/97 1,800,000 1,800,652
4.125% 3/20/98 1,900,000 1,904,969
West Windsor Plainsboro BAN 4% 2/10/98 2,300,000 2,306,180
Willingboro BAN 4.50% 6/26/97 1,716,000 1,716,566
Woodbridge Township BAN:
3.91% 7/2/97 12,100,000 12,101,246
3.96% 8/1/97 16,620,000 16,632,009
396,432,628
NEW YORK & NEW JERSEY - 14.7%
New York & New Jersey Port Auth. Equip. Rev., VRDN:
Series 1996 - 1, 3.95% 5,000,000 5,000,000
Series 1996 - 2, 4.10% (b) 3,500,000 3,500,000
Series 1996 - 4, 3.95% 4,200,000 4,200,000
Series 1997 - 1A, 3.95% 2,800,000 2,800,000
New York & New Jersey Port Auth. Participating VRDN (c):
Series PA-67, 3.95%
(Liquidity Facility Merrill Lynch & Co., Inc.) 2,000,000 2,000,000
Series SG-52, 4.10%
(Liquidity Facility Societe Generale, France) 4,600,000 4,600,000
Series 6:
4.15% (Liquidity Facility Societe Generale, France) (b) 2,400,000
2,400,000
Series 1997:
4% (Liquidity Facility Bank of New York) 1,900,000 1,900,000
4% (Liquidity Facility Bank of New York) (b) 5,200,000 5,200,000
New York & New Jersey Port Auth. Rev.:
VRDN :
Series 1991, 3.95% (b) 8,800,000 8,800,000
Series 1992, 3.825% 6,800,000 6,800,000
Series 1995, 3.825% (b) 9,400,000 9,400,000
Bonds:
(JFK Int'l. Air Terminal) Series 6, 4%, tender 8/14/97
(Liquidity Facility Societe Generale, France) (b) (d) 3,200,000
3,200,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
New York & New Jersey Port Auth. Versatile Structure
Rev. Special Gen. Oblig., VRDN:
Series 3, 4.10% (BPA Morgan Guaranty Trust, NY) $ 1,300,000 $ 1,300,000
Series 4, 4.05% (BPA Landesbank Hessen-Thuringen) (b) 5,600,000
5,600,000
Series 5, 4.10% (BPA Bayerische Landesbank) 2,700,000 2,700,000
69,400,000
PUERTO RICO - 1.5%
Puerto Rico Commonwealth Pub. Impt. Participating
VRDN, Series BT-165, 3.91%
(Liquidity Facility Bankers Trust Company, NY) (c) 5,712,000 5,712,000
Puerto Rico Pwr. Auth. Rev. Bonds
Series AA, 3.80%, tender 8/8/97
(Liquidity Facility Societe Generale, France) (d) 1,100,000 1,100,000
Univ. of Puerto Rico Sys. Rev. Participating VRDN, Series SG-21,
3.95% (Liquidity Facility Societe Generale, France) (c) 500,000 500,000
7,312,000
TOTAL INVESTMENTS - 100% $ 473,144,628
Total Cost for Income Tax Purposes $ 473,144,628
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
TAN - Tax Anticipation Notes
TRAN - Tax and Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
ACQUISITION ACQUISITION
SECURITY DATE COST
New York & New
Jersey Port Auth.
Rev. Bonds Series 6, 4%,
tender 8/14/97
(Liquidity Facility
Societe Generale,
France 5/15/97 $ 3,200,000
Puerto Rico Pwr. Auth.
Rev. Participating
VRDN, Series SG-44,
3.80% (Liquidity Facility
Societe Generale,
France) 5/20/97 $ 1,100,000
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>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 473,144,628
See accompanying schedule
Cash 584,289
Interest receivable 5,002,908
TOTAL ASSETS 478,731,825
LIABILITIES
Payable for investments purchased $ 5,511,505
Share transactions in process 3,112,634
Distributions payable 27,967
Accrued management fee 151,682
Other payables and accrued expenses 109,425
TOTAL LIABILITIES 8,913,213
NET ASSETS $ 469,818,612
Net Assets consist of:
Paid in capital $ 469,873,323
Accumulated net realized gain (loss) on investments (54,711)
NET ASSETS, for 469,873,323 shares outstanding $ 469,818,612
NET ASSET VALUE, offering price and redemption price per $1.00
share ($469,818,612 (divided by) 469,873,323 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 8,088,021
EXPENSES
Management fee $ 897,181
Transfer agent, accounting and custodian fees and 468,483
expenses
Registration fees 20,040
Audit 14,825
Legal 6,953
Miscellaneous 454
Total expenses before reductions 1,407,936
Expense reductions (4,064) 1,403,872
NET INTEREST INCOME 6,684,149
NET REALIZED GAIN (LOSS) ON INVESTMENTS (25,838)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,658,311
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 6,684,149 $ 12,600,168
Net interest income
Net realized gain (loss) (25,838) 517
Increase (decrease) in net unrealized gain from - (353)
accretion of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 6,658,311 12,600,332
FROM OPERATIONS
Distributions to shareholders from net interest income (6,684,149) (12,600,168)
Share transactions at net asset value of $1.00 per share 695,311,219 1,156,682,684
Proceeds from sales of shares
Reinvestment of distributions from net interest income 6,516,366 12,239,915
Cost of shares redeemed (655,206,959) (1,180,407,784)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 46,620,626 (11,485,185)
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 46,594,788 (11,485,021)
NET ASSETS
Beginning of period 423,223,824 434,708,845
End of period $ 469,818,612 $ 423,223,824
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .015 .029 .033 .022 .019 .028
Investment
Operations
Net interest income
Less Distributions
From net interest (.015) (.029) (.033) (.022) (.019) (.028)
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B 1.47% 2.93% 3.33% 2.19% 1.94% 2.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 469,819 $ 423,224 $ 434,709 $ 399,548 $ 359,587 $ 359,093
period (000 omitted)
Ratio of expenses to .62% A .63% .62% .62% .63% .64%
average net assets
Ratio of expenses to .61% A, .61% .62% .62% .63% .64%
average net assets C C
after expense
reductions
Ratio of net interest 2.93% A 2.89% 3.28% 2.17% 1.92% 2.78%
income to average
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 4 OF NOTES TO THE FINANCIAL STATEMENTS).
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 4 OF
NOTES TO THE FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity New Jersey Municipal Money Market Fund (the fund) is a fund of
Fidelity Court Street Trust II (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware business trust. The financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
amounted to $4,300,000 or 0.9% of net assets.
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 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
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
based on the monthly average net assets of all the mutual funds advised by
FMR. The rates ranged from 1100% to .3700% for the period. The annual
individual fund fee rate is .25%. In the event that these rates were lower
than the contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to an
annualized rate of .39% of average net assets .
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the fund. UMB has entered
into a sub-contract with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under which FSC performs the activities associated with the fund's
transfer and shareholder servicing agent and accounting functions. The fund
pays account fees and asset-based fees that vary according to account size
and type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $406,514 and $45,454, respectively.
For the period, the transfer agent fees were equivalent to an annualized
rate of .18% of average net assets.
Shareholders participating in the Fidelity Ultra Service Account(registered
trademark) Program (the Program) 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 $25,704.
4. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the fund's custodian and transfer agent fees
were reduced by $2,490 and $1,574, respectively, under these arrangements.
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
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Sarah H. Zenoble, Vice President
Scott Orr, 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 *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
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
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY CONNECTICUT
MUNICIPAL MONEY MARKET
FUND
(registered trademark)
SEMIANNUAL REPORT
MAY 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of 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 13 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 17 Notes to the financial statements.
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:
Through the first five months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will greatly
reduce your vulnerability to any single decline. We know from experience,
for example, that stock prices have gone up over longer periods of time,
have significantly outperformed other types of investments and have stayed
ahead of inflation.
Second, you can further manage your investing risk through diversification.
A stock mutual fund, for instance, is already diversified, because it
invests in many different companies. You can increase your diversification
further by investing in a number of different stock funds, or in such other
investment categories as bonds. You should also keep money you'll need in
the near future in a more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and capital
gains (the profits earned upon the sale of securities that have grown in
value). Yield measures the income paid by a fund. Since a money market fund
tries to maintain a $1 share price, yield is an important measure of
performance. If Fidelity had not reimbursed certain fund expenses, the past
five years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Fidelity Connecticut Municipal 1.48% 2.94% 13.59% 29.68%
Money Market Fund
Connecticut Tax-Free 1.43% 2.83% 13.47% 26.81%
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on August 29, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the Connecticut tax-free money
market funds average, which reflects the performance of mutual funds with
similar objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 11 mutual funds. (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 MAY 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity Connecticut Municipal 2.94% 2.58% 3.41%
Money Market Fund
Connecticut Tax-Free 2.83% 2.56% 3.11%
Money Market Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/2/97 3/3/97 12/2/96 9/2/96 5/27/96
Fidelity Connecticut Municipa 3.18% 2.77% 2.99% 2.90% 3.17%
l
Money Market Fund
Connecticut Tax-Free 2.91% 2.72% 2.84% 2.70% 2.91%
Money Market Funds Averag
e
Fidelity Connecticut Municip 5.19% 4.50% 4.86% 4.72% 5.17%
al
Money Market Fund -
Tax-equivalent
Portion of fund's income 4.87% 15.71% 12.89% 8.99% 5.09%
subject to state taxes
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 1997 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
An interview with Deborah Watson, Portfolio Manager of Fidelity Connecticut
Municipal Money Market Fund
Q. WHAT HAS THE INVESTMENT ENVIRONMENT BEEN LIKE, DEB?
A. At the beginning of the period, most market participants expected the
Federal Reserve Board to keep short-term interest rates steady as a result
of moderate economic growth and no signs of inflation. However, that
sentiment changed during the first quarter of 1997, as unemployment fell
and fears arose that higher labor costs would translate into higher prices.
Fed Chairman Alan Greenspan, speaking before the Joint Economic Committee
of Congress on March 20, said that the Fed's objective was to fight
inflation pre-emptively. That is, he indicated the Fed might raise rates to
head off potential inflation in the future, even though any increase in
price indices had been marginal. Shortly thereafter on March 25, the Fed
followed through and raised the rate banks charge each other for overnight
loans - known as the fed funds rate - by 0.25% to 5.50%. As the Fed's May
meeting approached, many in the market expected the Fed to raise rates
again.
Q. BUT THE FED HELD OFF . . .
A. That's right. Preliminary information indicated that economic growth
started to slow in the second quarter. In addition, such price indices as
the producer price index (PPI) and the consumer price index (CPI) continued
to show no signs of inflation. As a result, the Fed stood pat and indicated
that it was reverting to its usual posture - waiting to react to inflation
news before changing rates - rather than maintaining its pre-emptive
strategy.
Q. WHAT WAS YOUR STRATEGY OVER THIS PERIOD?
A. At the beginning of the period, the fund's average maturity was at 50
days. It rolled down somewhat through January as I focused new investments
on shorter-term securities due to the limited supply of longer-term
instruments in the Connecticut market. I maintained the maturity in the 37-
to 40-day range through the end of April. Toward the end of the period, I
sought to extend it by purchasing longer-term investments that were
offering attractive yields because they incorporated the expectation of
future interest rate increases. In addition, the yield advantage offered by
longer-term fixed-rate securities compared to shorter-term variable rate
notes tends to be more pronounced in the Connecticut market than
elsewhere. As a result, it's often advantageous to buy the longer
securities. By the end of May, the fund's average maturity was 48 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1997, was 3.20%, compared to 2.97%
six months earlier. The latest yield was the equivalent of a taxable yield
of 5.24% for Connecticut investors in the 38.88% combined federal and state
tax bracket, and does not reflect the portion of the fund's income that was
subject to state income taxes. The fund's total return during the six-month
period was 1.48%. That beat the total return of 1.43% for the Connecticut
tax-free money market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I think the Fed and the markets will continue to scrutinize every
economic number released. Any indications of economic weakening continuing
into the third quarter should postpone additional rate increases by the
Fed. However, I believe it is quite possible for growth to pick up in the
second half of the year, and we may see the Fed raise rates at that time.
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
FUND NUMBER: 418
TRADING SYMBOL: FCMXX
START DATE: August 29, 1989
SIZE: as of May 31, 1997,
more than $363 million
MANAGER: Deborah Watson,
since 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.
NOTE TO SHAREHOLDERS: Effective
July 1, 1997, after the period
covered by this report, Scott
Orr was named Portfolio
Manager of Fidelity
Connecticut Municipal Money
Market Fund.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND % OF FUND % OF FUND
ASSETS ASSETS ASSETS 5/31/96
5/31/97 11/30/96
0 - 30 60 75 59
31 - 90 27 2 29
91 - 180 2 10 4
181 - 397 11 13 8
WEIGHTED AVERAGE MATURITY
5/31/97 11/30/96 5/31/96
Fidelity Connecticut Municipal 48 days 50 days 45 days
Money Market Fund
Connecticut Tax-Free 46 days 57 days 27 days
Money Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Row: 1, Col: 1, Value: 13.0
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 13.0
Row: 1, Col: 5, Value: 54.0
Row: 1, Col: 6, Value: 0.0
Variable rate demand
notes (VRDNs) 64%
Commercial paper
(including CP mode) 13%
Tender bonds 12%
Municipal
notes 6%
Other 5%
Variable rate demand
notes (VRDNs) 54%
Commercial paper
(including CP mode) 13%
Tender bonds 9%
Municipal
notes 11%
Other 13%
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 13.0
Row: 1, Col: 5, Value: 64.0
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 81.5%
Bridgeport Gen. Oblig. Bonds 8.30% 8/15/97
(FGIC Insured) $ 1,000,000 $ 1,009,118
Clipper Tax Exempt Trust Participating VRDN, Series 94-1,
3.91% (Liquidity Facility State Street Bank & Trust Co.) (c) 10,156,998
10,156,998
Connecticut Dev. Auth. Arpt. Facs. Rev. (Bradley Arpt. Hotel)
Series 1997 A, 3.80%, LOC Kredietbank N.V., VRDN 4,300,000 4,300,000
Connecticut Dev. Auth. Health. Care Rev.
(Corp. for Independent Living Proj.)
Series 1990, 3.70%, LOC Chase Manhattan Bank, VRDN 15,890,000 15,890,000
Connecticut Dev. Auth. Ind. Dev. Rev., VRDN:
(Cap. Dist. Energy Ctr. Proj.):
Series 1986, 3.95%, LOC Bank of Nova Scotia (b) 6,900,000 6,900,000
Series 1988, 3.95%, LOC Bank of Nova Scotia (b) 100,000 100,000
(Lindenmaier Precision Co. Ohaus Proj.) Series 1988,
4.05%, LOC Morgan Guaranty Trust Co. (b) 8,000,000 8,000,000
(Rojo Enterprises LLC) 4.10%, LOC Fleet Bank NA 2,000,000 2,000,000
(W.E. Bassett Co. Proj.) Series 1986, 4.10%,
LOC Bank of Boston (b) 1,000,000 1,000,000
Connecticut Dev. Auth. Poll. Cont. Rev.:
(Lt. & Pwr. Co. Proj.) VRDN :
Series 1993 A, 3.80%, LOC Deutsche Bank 5,500,000 5,500,000
Series 1993 B, 3.90%, LOC Union Bank of Switzerland (b) 21,500,000
21,500,000
Series 1996 A, 4% (BPA Societe Generale, France)
(AMBAC Insured) (b) 7,500,000 7,500,000
(United Illuminating Co.) Series 1996 A, 3.80%,
LOC Union Bank of Switzerland, VRDN 2,800,000 2,800,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev.:
(Exeter Energy Proj.) VRDN:
Series 1989 A, 3.85%, LOC Sanwa Bank (b) 5,800,000 5,800,000
Series 1989 B, 3.85%, LOC Sanwa Bank (b) 5,700,000 5,700,000
(Rand-Whitney Containerboard)
3.60%, LOC Chase Manhattan Bank, VRDN (b) 6,700,000 6,700,000
Connecticut Gen. Oblig.:
Bonds:
Series 1995 B, 4.50% 10/1/97 2,000,000 2,007,242
Series 1996 D, 3.75% 12/1/97 4,500,000 4,503,719
Series 1997 A, 6% 3/1/98 6,000,000 6,106,952
4.75% 8/15/97 4,250,000 4,258,872
(Economic Recovery):
5% 12/15/97 4,600,000 4,632,545
4.75% 6/15/97 1,300,000 1,300,509
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.: - continued
Participating VRDN, Series MGT-27, 3.95% (Liquidity
Facility Morgan Guaranty Trust Co.) (c) $ 5,200,000 $ 5,200,000
Connecticut Health. & Ed. Facs. Auth. Rev.:
(Charlotte Hungerford Hosp.) Series B, 3.60%,
LOC Bank of Boston, VRDN 1,600,000 1,600,000
(Pomfret School Issue) Series A, 3.60%,
LOC Credit Local de France, VRDN 1,000,000 1,000,000
Bonds (Yale Univ.):
Series L, 3.55% 6/30/97, CP mode 5,050,000 5,050,000 Series M, 3.55%
6/30/97, CP mode 4,800,000 4,800,000
Series N, 3.55% 6/30/97, CP mode 4,300,000 4,300,000
Series O, 3.55% 6/30/97, CP mode 4,700,000 4,700,000
Series S:
3.60% 7/15/97, CP mode 1,000,000 1,000,000
3.80% 7/21/97, CP mode 8,400,000 8,400,000
3.70% 8/13/97, CP mode 4,500,000 4,500,000
Participating VRDN, Series BT-203,
4% (Liquidity Facility Bankers Trust) (c) 7,200,000 7,200,000
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.):
Bonds Series 1989 D:
3.70% 6/12/97, CP mode (b) 500,000 500,000
3.85% 7/21/97, CP mode (b) 6,700,000 6,700,000
3.80% 8/13/97, CP mode (b) 1,500,000 1,500,000 Series 1995 G, 3.80%
(BPA Morgan Guaranty Trust Co.)
(AMBAC Insured) VRDN 2,000,000 2,000,000
Participating VRDN, Series PT-81, 4.05%, (Liquidity
Facility Rabobank Nederland, N.V.) (b)(c) 2,730,000 2,730,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Pwr. Supply Sys.) Series 1995 A,:
3.25% 6/11/97, LOC Fleet Bank NA, CP mode 1,800,000 1,800,000
3.60% 7/11/97, LOC Fleet Bank NA, CP mode 800,000 800,000 3.70%
7/18/97, LOC Fleet Bank NA, CP mode 1,000,000 1,000,000
Connecticut Spl. Assessment Unemployment Rev.
Bonds Series 1993 C, 3.90%, tender 7/1/97 (FGIC Insured)
(Liquidity Facility FGIC Security Purchase, Inc.) 30,400,000 30,400,000
Connecticut Second Lien Spl. Tax Oblig.
(Transport Infrastructure Purp.) Series 1, 3.85%,
LOC Commerzbank, VRDN 26,175,000 26,175,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Reg. School Dist.:
(Dist. #1) BAN 4% 1/28/98 $ 1,250,000 $ 1,252,550
(Dist. #14) BAN 4% 6/4/98 (f) 3,200,000 3,212,352
Danbury Gen. Oblig.:
BAN 3.75% 8/8/97 735,000 735,674
BAN 3.75% 8/8/97 8,800,000 8,802,732
East Haven Gen. Oblig.:
BAN 4% 9/3/97 1,300,000 1,300,483
BAN 4.25% 9/3/97 4,500,000 4,504,683
Guilford Gen. Oblig. BAN 4.25% 10/15/97 1,000,000 1,001,980
Hartford Gen. Oblig. Bond 6.50% 6/15/97 (FGIC Insured) 500,000 500,578
Hartford Redev. Auth. (Underwood Towers Proj.)
3.65%, (FSA Insured) (BPA Barclays Bank ) VRDN 2,000,000 2,000,000
New Canaan Gen. Oblig. BAN 3.75% 3/10/98 9,800,000 9,823,373
New Haven Rev. (Starter Sportswear) Series 1986,
3.80%, LOC Fleet Bank NA, VRDN (b) 2,400,000 2,400,000
Newtown Gen. Oblig.Bond 6% 6/15/97 (MBIA Insured) 1,500,000 1,501,502
Stamford Gen. Oblig. BAN 4% 4/1/98 (f) 9,900,000 9,931,086
Stamford Hsg. Auth. Mutimodal Rev. (Morgan Street Proj.)
Series 1994, 3.90%, LOC Deutsche Bank, VRDN (b) 5,000,000 5,000,000
Waterbury Gen. Oblig. Bond 4.50% 8/15/97 (MBIA Insured) 1,155,000
1,157,486
302,145,434
PUERTO RICO - 14.5%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Participating VRDN (c):
Series PA-114, 3.85% (Liquidity Facility Merrill
Lynch & Co., Inc.) 7,900,000 7,900,000
Series PA-125, 3.85% (Liquidity Facility Merrill
Lynch & Co., Inc.) 2,900,000 2,900,000
Puerto Rico Commonwealth Pub. Impt.:
Participating VRDN (c):
Series BT-165, 3.91% (Liquidly Facility Bankers Trust
Company, NY) 4,620,600 4,620,600
Series PA-97, 3.85%, (MBIA Insured) (Liquidity Facility
Merrill Lynch & Co.) 4,100,000 4,100,000
Series PT-63, 3.85% (Liquidity Facility Bayerische
Hypotheken) 8,600,000 8,600,000
Rfdg. Series 1987, 7.25% 7/1/97 800,000 818,413
Gen. Oblig. Bond Series 1989 A, 7% 7/1/97
(FGIC Insured) 2,600,000 2,607,640
Puerto Rico Gov't. Dev. Bank Rev.
3.55%, LOC Credit Suisse First Boston Bank, VRDN 1,500,000 1,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Elec. Pwr. Auth. Rev.:
Bonds:
Series K, 9.25% 7/1/97 $ 500,000 $ 512,253
8.40% 7/1/97 2,160,000 2,211,651
9.375% 7/1/97 1,000,000 1,024,697
(Muni. Sec. Trust Rec. SGA44) Series AA, 3.80%,
tender 8/8/97 (Liquidity Facility Societe
Generale, France) 2,000,000 2,000,000
Participating VRDN, Series BT-105, 3.725%
(Liquidity Facility Bankers Trust Co.) (c) 13,158,000 13,158,000
Puerto Rico Ind. Med. Higher Ed. & Cont. Facs. Fin. Auth.
Bonds (Inter. American Univ.) Series 1988, 3.55% 6/19/97,
LOC Bank Of Tokyo-Mitsubishi Ltd., CP mode 1,800,000 1,800,000
53,753,254
OTHER - 4.0%
Municipal Central Cash Fund (d)(e) 15,038,890 15,038,891
TOTAL INVESTMENTS - 100% $ 370,937,579
Total Cost for Income Tax Purposes $ 370,937,579
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.
4. Information in this report regarding holdings by state and security
types do not reflect the holdings of the Municipal Central Cash Fund. A
listing of the Municipal Central Cash Fund's holdings as of its most recent
fiscal period end is available upon request.
5. At the period end, the seven-day yield of the Municipal Central Cash
Fund was 3.90% The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
6. Security purchased on a delayed delivery or when-issued 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 $11,000 of which $8,100 and $2,900 will expire on November
30, 2002 and 2003 respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 370,937,579
See accompanying schedule
Cash 3,285,513
Interest receivable 2,926,860
TOTAL ASSETS 377,149,952
LIABILITIES
Payable for investments purchased $ 13,143,438
Delayed delivery
Distributions payable 51,791
Accrued management fee 116,635
Other payables and accrued expenses 68,311
TOTAL LIABILITIES 13,380,175
NET ASSETS $ 363,769,777
Net Assets consist of:
Paid in capital $ 363,782,362
Accumulated net realized gain (loss) on investments (12,585)
NET ASSETS, for 363,782,362 shares outstanding $ 363,769,777
NET ASSET VALUE, offering price and redemption price $1.00
per share ($363,769,777 (divided by) 363,782,362 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 6,349,793
EXPENSES
Management fee $ 707,896
Transfer agent, accounting and custodian fees and 310,264
expenses
Registration fees 19,069
Audit 12,247
Legal 6,065
Total expenses before reductions 1,055,541
Expense reductions (11,858) 1,043,683
NET INTEREST INCOME 5,306,110
NET GAIN (LOSS) (1,696)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,304,414
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED MAY 31, NOVEMBER 30,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,306,110 $ 9,700,822
Net interest income
Net realized gain (loss) (1,696) 18,636
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,304,414 9,719,458
FROM OPERATIONS
Distributions to shareholders from net interest income (5,306,110) (9,700,822)
Share transactions at net asset value of $1.00 per share 529,395,044 835,399,593
Proceeds from sales of shares
Reinvestment of distributions from net interest income 5,042,557 9,314,495
Cost of shares redeemed (510,153,368) (827,115,296)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 24,284,233 17,598,792
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 24,282,537 17,617,428
NET ASSETS
Beginning of period 339,487,240 321,869,812
End of period $ 363,769,777 $ 339,487,240
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED MAY 31,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .015 .029 .032 .022 .019 .027
Investment
Operations
Net interest income
Less Distributions
From net interest (.015) (.029) (.032) (.022) (.019) (.027)
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B, C 1.48% 2.98% 3.29% 2.19% 1.87% 2.74%
RATIOS AND SUPPLEMENTAL DATA
Net assets, $ 363,770 $ 339,487 $ 321,870 $ 300,885 $ 288,566 $ 331,909
end of period
(000 omitted)
Ratio of expenses to .59% A .59% .61% .60% .61% .43%
average net assets E
Ratio of expenses to .58% A, .58% .61% .60% .61% .43%
average net assets D D
after expense
reductions
Ratio of net interest 2.94% A 2.93% 3.24% 2.16% 1.87% 2.76%
income to average
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAS CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Connecticut Municipal Money Market Fund (the fund) is a fund of
Fidelity Court Street Trust II (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware business trust. The 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
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. 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund may invest in the Municipal
Central Cash Fund (the Cash Fund) managed by FMR Texas, an affiliate of
Fidelity Management & Research Company (FMR). The Cash Fund is an open-end
money market fund available only to investment companies and other accounts
managed by FMR and its affiliates. The Cash Fund seeks preservation of
capital, liquidity, and current income by investing in high-quality,
short-term municipal securities of various states and municipalities.
Income distributions from the Cash Fund are declared daily and paid monthly
from net interest income. Income distributions received by the fund are
recorded as interest income in the accompanying financial statements.
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying securities
is fixed at the time the transaction is negotiated. The market values of
the securities purchased 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 when-issued
security. With respect to purchase commitments, the fund identifies
securities as segregated in its custodial records with a value at least
equal to the amount of the commitment. The payables and receivables
associated with the purchases and sales of when-issued securities having
the same settlement date and broker are offset. When-issued securities that
have been purchased from and sold to different brokers are reflected as
both payables and receivables in the statement of assets and liabilities
under the caption "Delayed delivery." Losses may arise due to changes in
the market value of the underlying securities, if the counterparty does not
perform under the contract, or if the issuer does not issue the securities
due to political, economic, or other factors.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. 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 annualized rate of .39%
of the fund's average net assets.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the fund. The Bank has
entered into a sub-contract with Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, under which FSC performs the activities associated with
the fund's transfer and shareholder servicing agent and accounting
functions. The fund pays account fees and asset-based fees that vary
according to account size and type of account. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
The accounting fee is based on the level of
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES - CONTINUED
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$263,616 and $36,793, respectively.
For the period, the transfer agent fees were equivalent to an annualized
rate of .15% 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 $10,595.
4. EXPENSE REDUCTIONS.
The fund has entered into an arrangement with its transfer agent whereby
credits realized as a result of uninvested cash balances were used to
reduce a portion of the fund's expenses. During the period, the fund's
transfer agent fees were reduced by $11,858 under this arrangement.
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
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
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 Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
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
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
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 Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
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
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
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
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
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
AUTOMATED LINE FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(registered trademark)
CONNECTICUT
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
MAY 31, 1997
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
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 18 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE 22 How the fund has done over time.
FUND TALK 24 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 26 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 27 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 31 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 35 Notes to the financial statements.
</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:
Through the first five months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
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. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income, as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, the life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan Connecticut Municipal 1.39% 7.75% 39.21% 107.42%
Income Fund
Lehman Brothers Connecticut 4 Plus 1.60% 7.95% n/a n/a
Year Enhanced Municipal Bond Index
Connecticut Municipal 1.50% 7.39% 37.78% n/a
Debt Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on October 29, 1987. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Lehman Brothers Connecticut 4 Plus Year Enhanced
Municipal Bond Index - a total return performance benchmark for Connecticut
investment-grade municipal bonds with maturities of at least four years. 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 mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past six months average represents a peer
group of 21 mutual funds. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 7.75% 6.84% 7.90%
Income Fund
Lehman Brothers Connecticut 4 Plus 7.95% n/a n/a
Year Enhanced Municipal Bond Index
Connecticut Municipal 7.39% 6.62% n/a
Debt Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking an arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns by annualizing the result.)
$10,000 OVER LIFE OF FUND
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
1996/12/31 20415.19 21722.82
1997/01/31 20485.95 21763.87
1997/02/28 20658.58 21963.67
1997/03/31 20377.29 21670.89
1997/04/30 20537.78 21852.28
1997/05/30 20813.45 22180.93
$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 May 31, 1997, the value of your
investment would have grown to $20,813 a 108.13% increase on your initial
investment. 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 $22,181 a 121.81% 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
SIX YEARS ENDED NOVEMBER 30,
MONTHS
ENDED
MAY 31,
1997 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Dividend return 2.55% 5.29% 6.62% 5.27% 6.29% 6.59%
Capital appreciation return -1.16% 0.35% 12.78% -12.89% 5.52% 3.12%
Total return 1.39% 5.64% 19.40% -7.62% 11.81% 9.71%
</TABLE>
TOTAL RETURN COMPONENTS include both returns and capital appreciation
returns. A dividend return reflects the actual dividends paid by the fund.
A capital appreciation return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's share
price. Both returns assume the dividends or gains are reinvested, if any.
For the periods through November 30, 1996 capital appreciation and total
returns include the effect of a $5 account closeout fee on an average sized
account.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED MAY 31, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.76(cents) 28.20(cents) 56.48(cents)
Annualized dividend rate 5.07% 5.11% 5.12%
30-day annualized yield 4.69% - -
30-day annualized tax-equivalent yield 7.67% - -
</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 $11.05 over
the past one month, $11.07 over the past six months and $11.03 over the
past one 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% 1997 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
An interview with George Fischer, Portfolio Manager of Spartan Connecticut
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended May 31, 1997, the fund had a total
return of 1.39%. For the same period, the Connecticut municipal debt funds
average, as tracked by Lipper Analytical Services, returned 1.50%, while
the Lehman Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index
returned 1.60%. For the 12 months that ended May 31, 1997, the fund
returned 7.75%, the Lipper average returned 7.39% and the index had a total
return of 7.95%.
Q. HOW WOULD YOU CHARACTERIZE THE MUNICIPAL BOND MARKET OVER THE PAST SIX
MONTHS?
A. I'd characterize it as a somewhat choppy period for all bonds, although
municipals actually performed better than U.S. Treasury bonds. Evidence
that the economy was growing at a much-quicker-than-expected pace sent bond
prices lower and, correspondingly, bond yields higher. Bond holders, of
course, fear a fast-growing economy because they worry that it can whip up
inflation, which has been nearly non-existent over the past couple of
years. Inflation can spell trouble for bond investors because it can eat
away at the fixed-income payments bonds provide. While inflation remained
low during the period, investors continued to worry that the future
wouldn't
be so predictable. Fortunately, there was a limited supply of municipals
available and demand for them grew, which helped support municipal prices.
Q. WHAT CHANGES DID YOU MAKE OVER THE PAST SIX MONTHS?
A. Compared to six months ago, the fund has fewer bonds with maturities of
about 10 years and more bonds with maturities of about five years. The
reason for the switch had to do with the changing shape of the yield curve
- - a graphical representation of the yields on bonds with various
maturities. The yield curve flattened during the period, which meant that
there was a smaller difference in yield between five- and 10-year bonds. So
when possible, I sold 10-year bonds. I didn't believe they offered
investors adequate reward in the way of yield for their additional interest
rate sensitivity. I replaced them with bonds in the five-year maturity
range where the risk/reward profile seemed more attractive.
Q. THE FUND HAD SIZABLE HOLDINGS IN GENERAL OBLIGATION BONDS DURING THE
PERIOD. WHAT'S YOUR PHILOSOPHY IN EVALUATING THE FUND'S POSITIONS IN THAT
SECTOR?
A. Let's start by defining the terms. A general obligation bond, or GO, is
a municipal bond backed by the full faith and credit - which includes the
taxing power - of a city, county or state. A GO bond is repaid with general
revenue such as taxes. In contrast, revenue bonds are repaid by revenue
generated from a specific facility, say a toll road or water system. In
choosing GOs, I look at different issuers apart from the major Connecticut
issuer - the state - for what I believe is a good combination of high
income and low risk. Fortunately, there are some local issuers in
Connecticut that meet these criteria, although I put an emphasis on staying
diversified and not taking on very large positions in any one security.
General revenues are sensitive to both the economy and the municipality's
fiscal health, both of which were relatively strong during the period in
many of the areas the fund emphasized.
Q. OF THE TOTAL AMOUNT OF NEW MUNICIPAL BONDS ISSUED IN CONNECTICUT OVER
THE PAST YEAR, ROUGHLY HALF WAS INSURED. WHAT CHALLENGES DID THAT PRESENT
TO YOU AS A MUTUAL FUND MANAGER?
A. It made it increasingly more difficult to find relatively
higher-yielding bonds. Because of the limited number of opportunities to
pick up yield through an analysis of credit quality, I focused on
exploiting
opportunities that arose due to a bond's structure. For example, I'd
analyze a bond's call feature, which determines whether it can be redeemed
by its issuer before maturity. Depending on their price and their potential
for appreciation, I would overweight non-callable bonds, which can't be
redeemed by their issuers before maturity, when I thought the market would
reward me for doing so. I also looked for opportunities that arose when
bonds were selling at prices cheaper than I believed to be their fair value
based on their coupon, maturity or other factors.
Q. WHAT'S YOU OUTLOOK FOR THE NEXT SIX MONTHS?
A. One development I'll be keeping an eye on is the state's takeover of the
Hartford school district. The state supreme court ruled that the state
needed to take steps to improve school funding in poorer areas of the
state, including Hartford. The question is how much money the state will
spend to fix the problem in Hartford's school district and other areas. As
far as the overall bond market, I think that until investors feel like they
have a good handle on where the economy, interest rates and inflation are
headed, the bond market will likely remain choppy. The past six months have
been a relatively good period for municipal bonds relative to U.S.
Treasuries and, by the end of the period, munis seemed fairly valued in
relation to their taxable counterparts. I think that the municipal market
will need to continue to experience strong demand and weak supply in order
to continue outperforming Treasuries.
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
FUND NUMBER: 407
TRADING SYMBOL: FICNX
START DATE: October 29,
1987
SIZE: as of May 31, 1997,
more than $328 million
MANAGER: George Fischer,
since 1996; manager, various
Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
GEORGE FISCHER ON THE
CONNECTICUT ECONOMY:
"The Connecticut economy
has continued to do very well
over the past six months,
which has helped to improve
the state's revenue
collections. The previous
engines of job growth -
defense and financial services
- - seem to be on the mend.
The defense industry appears
to be turning the corner with
new orders from the
aerospace sector, while the
insurance sector looks like it
has put the worst behind it.
What remains to be seen is
how the state's recent tax cuts
will play out over the next
several years and whether
spending will also be curtailed
so that the budget remains in
balance. So far, the state has
successfully managed this
process, but I'll continue to
keep a close eye on future
developments."
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE MARKET SECTORS AS OF MAY 31, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
General Obligation 33.8 32.7
Health Care 13.2 13.2
Escrowed/Pre-Refunded 10.9 10.5
Education 9.1 8.7
Special Tax 9.0 8.8
AVERAGE YEARS TO MATURITY AS OF MAY 31, 1997
6 MONTHS AGO
Years 12.4 13.1
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 MAY 31, 1997
6 MONTHS AGO
Years 6.7 7.2
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Aaa 52.7%
Aa, A 33.1%
Baa 11.2%
Short-term
investments 3.0%
Aaa 51.7%
Aa, A 33.8%
Baa 12.9%
Short-term
investments 1.6%
Row: 1, Col: 1, Value: 52.7
Row: 1, Col: 2, Value: 33.1
Row: 1, Col: 3, Value: 11.2
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 1, Value: 51.7
Row: 1, Col: 2, Value: 33.8
Row: 1, Col: 3, Value: 12.9
Row: 1, Col: 4, Value: 1.6
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS. AMOUNTS
SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Investments in Securities
MUNICIPAL BONDS - 97.0%
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
CONNECTICUT - 94.1%
Branford Gen. Oblig. Unltd. Tax:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 580,625
7% 6/15/09 (FGIC Insured) Aaa 500,000 580,625
Bridgeport Gen. Oblig.:
Series A:
5.40% 9/1/08 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 576,813
5.50% 9/1/09 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 580,250
5.60% 9/1/10 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 584,375
5.70% 9/1/11 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 550,000 587,813
5.70% 9/1/15 (AMBAC Insured)
(Pre-Refunded to 9/1/05 @ 101) (d) Aaa 2,000,000 2,130,000
Series B, 7.75% 11/15/10
(Pre-Refunded to 11/15/00 @ 102) (d) Baa 3,235,000 3,623,200
Unltd. Tax Series A:
Rfdg. 6.50% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,556,213
7.20% 3/1/98 (Escrowed to Maturity) (d) Baa 930,000 951,929
7.40% 3/1/00
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,080,000 1,156,950
7.625% 1/15/09
(Pre-Refunded to 3/1/99 @ 102) (d) Baa 1,500,000 1,614,375
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,760,281
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 837,500
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,280,000
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aaa 2,500,000 2,750,000
5.875% 11/1/03 Aaa 1,000,000 1,073,750
5.875% 5/1/04 Aaa 1,000,000 1,075,000
6.80% 7/1/05 Aaa 1,000,000 1,092,500
6% 10/1/12 (e) Aaa 6,000,000 6,390,000
Connecticut Dev. Auth. Health Care Rfdg.
(Duncaster, Inc. Proj.) 6.75% 9/1/15 A2 3,000,000 3,161,250
Connecticut Dev. Auth. Poll. Cont. Rev.
(New England Pwr. Co. Proj.)
7.25% 10/15/15 A2 3,000,000 3,195,000
Connecticut Dev. Auth. Rev.
(Hartford Civic Ctr.) Series A:
6% 11/15/07 A1 1,525,000 1,631,750
6% 11/15/08 A1 1,525,000 1,631,750
6% 11/15/09 A1 1,525,000 1,624,125
4.75% 11/15/13 A1 1,525,000 1,385,844
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.:
Series A:
6.10% 3/15/02 Aa3 $ 3,000,000 $ 3,187,500
7% 3/15/03 Aa3 3,000,000 3,345,000
6.90% 3/15/09
(Pre-Refunded to 3/15/00 @ 102) (d) Aa 3,000,000 3,243,750
(College Savings Plan):
0% 11/1/06 Aa3 2,800,000 1,743,000
0% 5/15/07 Aa3 2,250,000 1,355,625
Series B, 6% 10/1/05 Aa3 6,430,000 6,912,250
(Cap. Appreciation College Savings Plan):
Series A, 0% 12/1/07 Aa3 4,000,000 2,345,000
Unltd. Tax Series B, 0% 11/1/09 Aa3 7,000,000 3,657,500
6% 3/15/01 Aa3 2,405,000 2,528,256
Connecticut Health & Edl. Facs. Auth. Rev.:
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,881,250
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,483,050
(Connecticut College Issue) Series B,
6.625% 7/1/11 (MBIA Insured)
(Pre-Refunded to 7/1/01 @ 102) (d) Aaa 1,200,000 1,315,500
(Greenwich Hosp.) 5.80% 7/1/26
(MBIA Insured) Aaa 5,400,000 5,393,250
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa2 850,000 831,938
(Kent School) Series B:
3.90% 7/1/97 (MBIA Insured) Aaa 250,000 250,015
5.10% 7/1/07 (MBIA Insured) Aaa 265,000 265,994
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 307,288
5.375% 7/1/09 (MBIA Insured) Aaa 345,000 347,588
5.40% 7/1/10 (MBIA Insured) Aaa 685,000 685,856
(Loomis Chaffee School) Series C,
5.50% 7/1/26 (MBIA Insured) Aaa 1,430,000 1,396,038
(Lutheran Gen. Health Care Sys.) 7.375%
7/1/19 (Escrowed to Maturity) (d) Aaa 3,195,000 3,734,156
(New Britain Mem. Hosp.) Series A,
7.75% 7/1/22 BBB- 6,500,000 6,971,250
(Quinnipiac College):
Series C, 7.75% 7/1/20
(Pre-Refunded to 7/1/00 @ 102) (d) BBB- 1,970,000 2,186,700
Series D, 6% 7/1/13 BBB- 3,500,000 3,443,125
Series D, 6% 7/1/23 BBB- 1,975,000 1,923,156
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22 LOC Fleet Nat'l.
Bank (Pre-Refunded to 7/1/02 @ 102) (d) Baa3 1,000,000 1,112,500
Series C, 6% 7/1/06 Baa3 250,000 253,750
Series C, 6.50% 7/1/16 Baa3 4,000,000 4,105,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev.: - continued
(St. Mary's Hosp.) Issue B:
7.60% 7/1/03 A3 $ 900,000 $ 935,730
7.80% 7/1/09 (AMBAC Insured) A3 4,525,000 4,700,389
(St. Raphael Hosp.) Series H:
6.50% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,134,450
6.50% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,515,625
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,356,000
(Sharon Healthcare, Inc.) Series A:
9.20% 7/1/02
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 1,500,000 1,798,125
8.75% 7/1/06
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 450,000 532,125
9% 7/1/13
(Pre-Refunded to 7/1/01 @ 103) (d) AAA 1,300,000 1,548,625
(Veterans Mem. Med. Ctr.) Series A,
6.25% 7/1/05 (MBIA Insured) Aaa 2,265,000 2,460,356
(Yale-New Haven Hosp.):
Series F, 7.10% 7/1/25 (MBIA Insured)
(Pre-Refunded to 7/1/00 @ 102) (d) Aaa 5,000,000 5,468,750
6% 7/1/03 (MBIA Insured) Aaa 1,000,000 1,061,250
(Yale Univ.) 5.929% 6/10/30 Aaa 10,000,000 10,025,000
Connecticut Higher Ed. Supplemental Loan
Auth. Rev. Series A:
(Family Ed. Loan Prog.) 7.20% 11/15/10 A 850,000 897,813
7.375% 11/15/05 (b) A1 500,000 520,000
7.50% 11/15/10 A1 1,730,000 1,801,363
Connecticut Hsg. Fin. Auth. (Mtg. Fin. Prog.):
Series A, Subseries A-2, 6.45% 5/15/22 (b) Aa 5,500,000 5,630,625
Series B, 6.20% 5/15/12 Aa 2,500,000 2,556,250
Series E, 6.20% 5/15/14 Aa 1,000,000 1,023,750
Series E, Subseries E-1, 6.30% 5/15/17 Aa 1,950,000 2,013,375
Connecticut Muni. Elec. Energy Coop.
Pwr. Supply Sys. Rev.:
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,385,388
6% 1/1/05 (MBIA Insured) Aaa 3,380,000 3,591,250
6% 1/1/06 (MBIA Insured) Aaa 2,000,000 2,132,500
Connecticut Resources Recovery Auth. Rev.:
Rfdg. Series A, 5.5% 11/15/11
(MBIA Insured) Aaa 2,500,000 2,506,250
(American Refuse Fuel Co.) 8.10% 11/15/15 A2 4,500,000 4,809,375
5.25% 11/15/08 (MBIA Insured) Aaa 4,000,000 4,000,000
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 995,000
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 2,067,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
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 $ 2,652,463
Series A:
6.50% 6/1/03 A1 2,800,000 3,031,000
7.125% 6/1/10 A1 3,550,000 4,171,250
Series B:
6.50% 10/1/07 A1 2,250,000 2,494,688
0% 6/1/08 A1 3,500,000 1,981,875
6.15% 9/1/09 A1 1,500,000 1,627,500
6.50% 10/1/10 A1 3,250,000 3,615,625
6.125% 9/1/12 A1 5,000,000 5,381,250
6.50% 10/1/12 A1 4,000,000 4,460,000
Eastern Resources Recovery Auth. Solid Waste
Rev. (Wheelabrator Lisbon Proj.) Series A:
5.50% 1/1/15 (b) A- 8,000,000 7,510,000
5% 1/1/24 (b) A- 1,000,000 985,000
Meriden Gen. Oblig. Unltd. Tax:
6.25% 8/1/05 (FGIC Insured) Aaa 2,000,000 2,180,000
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,190,000
7% 10/1/07 (MBIA Insured) Aaa 500,000 580,625
Milford Gen. Oblig. Unltd. Tax 6.70% 2/1/05 Aa3 400,000 447,000
Monteville Gen. Oblig.:
7% 3/15/13 Aa 220,000 257,125
7% 3/15/14 Aa 220,000 257,125
Naugatuck Gen. Oblig. Unltd. Tax:
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 246,981
6.90% 6/15/07 (FGIC Insured) Aaa 485,000 555,931
7.40% 9/1/07 (MBIA Insured) Aaa 370,000 439,375
7.40% 9/1/08 (MBIA Insured) Aaa 370,000 441,225
New Britain Gen. Oblig.:
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,140,000
Unltd. Tax:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 427,500
6%, 4/15/06 (AMBAC Insured) Aaa 1,615,000 1,732,088
7% 4/1/07 (MBIA Insured) Aaa 580,000 665,550
6% 4/15/07 (AMBAC Insured) Aaa 1,615,000 1,728,050
7% 4/1/08 (MBIA Insured) Aaa 580,000 669,175
5% 2/1/12 (MBIA Insured) Aaa 885,000 856,238
5% 2/1/13 (MBIA Insured) Aaa 885,000 850,706
New Haven Gen. Oblig.:
Rfdg. Series A, 5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,739,500
Series A, 7.40% 3/1/12 Baa1 1,000,000 1,135,000
Unltd. Tax 6% 2/15/05 (FGIC Insured) Aaa 1,650,000 1,761,375
8.25% 8/15/01 Baa1 3,280,000 3,497,300
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,108,750
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,290,875
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
New Haven Gen. Oblig.: - continued
7% 2/15/05 (FGIC Insured) Aaa $ 1,250,000 $ 1,414,063
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,652,953
Newtown Gen. Oblig. Unltd. Tax:
6% 6/15/05 (MBIA Insured) Aaa 1,700,000 1,833,875
6% 6/15/06 (MBIA Insured) Aaa 1,700,000 1,840,250
North Thompsonville Fire Dist.:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 205,200
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 216,838
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 228,250
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 244,831
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 262,200
Norwalk Hsg. Auth. Mtg. Rev. (Monterey Village)
Series 1985 B, Section 8, 9% 11/1/99 BBB 145,000 142,100
South Central Connecticut Wtr. Sys.
Auth. Rev. 11th Series:
5.625% 8/1/05 (FGIC Insured) Aaa 5,000,000 5,200,000
5.75% 8/1/12 (FGIC Insured) Aaa 5,000,000 5,112,500
Stamford Gen. Oblig. Unltd. Tax
6.25% 2/15/03 Aaa 1,725,000 1,860,844
6.25% 2/15/04 Aaa 1,725,000 1,869,469
6.25% 2/15/05 Aaa 1,725,000 1,882,406
6.60% 1/15/07 Aaa 295,000 334,088
6.60% 1/15/08 Aaa 1,480,000 1,687,200
6.60% 1/15/09 Aaa 1,000,000 1,140,000
Stratford Gen. Oblig. Unltd. Tax
7% 6/15/08 (FGIC Insured) Aaa 500,000 579,375
Univ. of Connecticut 5.5% 2/1/06
(FGIC Insured) Aaa 3,070,000 3,215,825
Voluntown Gen. Oblig. Unltd. Tax:
6.75% 10/1/03 A 210,000 230,475
6.75% 10/1/04 A 210,000 231,788
6.80% 10/1/06 A 210,000 236,775
6.80% 10/1/07 A 210,000 238,088
6.80% 10/1/08 A 210,000 239,138
6.80% 10/1/09 A 185,000 211,363
West Hartford Gen. Oblig. Unltd. Tax:
6.50% 7/15/05 Aaa 2,000,000 2,222,500
6.50% 7/15/06 Aaa 2,000,000 2,235,000
5% 7/15/11 Aaa 2,000,000 1,942,500
West Haven Impt. Unltd. Tax 6.70%
2/15/04 (MBIA Insured) Aaa 710,000 788,988
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09 (FGIC Insured) Aaa 445,000 515,088
7% 6/15/10 (FGIC Insured) Aaa 440,000 509,300
Woodstock Spl. Oblig. Rev. (Woodstock
Academy) 7% 3/1/08 (AMBAC Insured) Aaa 725,000 783,906
305,499,388
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PUERTO RICO - 2.9%
Puerto Rico Commonwealth Gen. Oblig.
Unltd. Tax 6.40% 7/1/11 Baa1 $ 1,500,000 $ 1,603,125
Puerto Rico Commonwealth Hwy. & Trans.
Auth. Rev. Rfdg. Series V, 6.625% 7/1/12 Baa1 1,750,000 1,879,063
Puerto Rico Elec. Pwr. Auth. Rev.:
Rfdg. Series W, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,335,000
7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,332,500
Puerto Rico Indl. Med. & Envir. Poll. Cont. Facs.
Fing. Auth. Rev. (Motorola, Inc. Proj.)
Series A, 6.75% 1/1/14 (f) Aa3 1,285,000 1,394,225
9,543,913
TOTAL MUNICIPAL BONDS
(Cost $302,398,609) 315,043,301
MUNICIPAL NOTES (A) - 3.0%
CONNECTICUT - 3.0%
Connecticut Dev. Auth. Poll. Cont. Rev.
(Connecticut Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.65% LOC Deutsche Bank VMIG 1 3,800,000 3,800,000
Series 1993 B, 3.90% LOC Union Bank of
Switzerland, VRDN (b) VMIG 1 1,400,000 1,400,000
Connecticut Health & Edl. Facs. Auth.
Rev. (Yale Univ.) Series M,
3.55% 6/30/97, CP mode VMIG 1 2,000,000 1,999,800
Connecticut Spl. Tax Oblig. Rev. (2nd Lien)
(Trans. Infrastructure) Series 1, 3.85%
LOC Industrial Bank of Japan, VRDN VMIG 1 2,500,000 2,500,000
TOTAL MUNICIPAL NOTES
(Cost $9,699,800) 9,699,800
TOTAL INVESTMENTS - 100%
(Cost $312,098,409) $ 324,743,101
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
78 Treasury Bond Contracts Sept. 97 $ 8,501,864 $ 48,886
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.6%
SECURITY TYPE ABBREVIATIONS
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. 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 $410,025.
6. 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 $1,394,225 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:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 82.0% AAA, AA, A 83.3%
Baa 6.7% BBB 9.2%
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 distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 33.8%
Health Care 13.2
Escrowed/Pre-Refunded 10.9
Education 9.1
Special Tax 9.0
Electric Revenue 6.8
Water and Sewer 6.3
Others (individually less than 5%) 10.9
TOTAL 100.0%
INCOME TAX INFORMATION
At May 31, 1997, the aggregate cost of investment securities for income tax
purposes was $312,098,409. Net unrealized appreciation aggregated
$12,644,692, of which $13,586,100 related to appreciated investment
securities and $941,408 related to depreciated investment securities.
At November 30, 1996, the fund was required to defer approximately
$1,854,185 of losses on futures contracts.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $312,098,409) - $ 324,743,101
See accompanying schedule
Interest receivable 5,358,271
Receivable for daily variation on futures contracts 39,647
TOTAL ASSETS 330,141,019
LIABILITIES
Payable to custodian bank $ 190,072
Payable for fund shares redeemed 491,755
Distributions payable 309,297
Accrued management fee 152,581
Other payables and accrued expenses 5,192
TOTAL LIABILITIES 1,148,897
NET ASSETS $ 328,992,122
Net Assets consist of:
Paid in capital $ 316,904,583
Accumulated undistributed net realized gain (loss) on (606,039)
investments
Net unrealized appreciation (depreciation) on 12,693,578
investments
NET ASSETS, for 29,647,485 shares outstanding $ 328,992,122
NET ASSET VALUE, offering price and redemption price $11.10
per share ($328,992,122 (divided by) 29,647,485 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 9,239,416
EXPENSES
Management fee $ 895,204
Non-interested trustees' compensation 6,009
Total expenses before reductions 901,213
Expense reductions (7,271) 893,942
NET INTEREST INCOME 8,345,474
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,224,686
Futures contracts 105,202 1,329,888
Change in net unrealized appreciation (depreciation) on:
Investment securities (5,442,044)
Futures contracts 48,886 (5,393,158)
NET GAIN (LOSS) (4,063,270)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 4,282,204
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 8,345,474 $ 17,455,439
Net interest income
Net realized gain (loss) 1,329,888 3,260,268
Change in net unrealized appreciation (depreciation) (5,393,158) (2,313,786)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,282,204 18,401,921
FROM OPERATIONS
Distributions to shareholders (8,345,474) (17,455,439)
From net interest income
From net realized gain (296,996) -
TOTAL DISTRIBUTIONS (8,642,470) (17,455,439)
Share transactions 20,653,662 29,600,748
Net proceeds from sales of shares
Reinvestment of distributions 6,729,960 13,513,939
Cost of shares redeemed (28,659,371) (68,305,755)
Redemption fees 8,132 15,649
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (1,267,617) (25,175,419)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (5,627,883) (24,228,937)
NET ASSETS
Beginning of period 334,620,005 358,848,942
End of period $ 328,992,122 $ 334,620,005
OTHER INFORMATION
Shares
Sold 1,864,864 2,674,315
Issued in reinvestment of distributions 607,589 1,222,501
Redeemed (2,589,059) (6,175,401)
Net increase (decrease) (116,606) (2,278,585)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1997
(UNAUDITED) 1996 1995 1994 E 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 11.240 $ 11.200 $ 9.960 $ 11.840 $ 11.220 $ 10.880
beginning of period
Income from Investment .282 .569 .617 .640 .680 .689
Operations
Net interest income
Net realized and (.130) .039 1.270 (1.472) .619 .338
unrealized gain
(loss)
Total from investment .152 .608 1.887 (.832) 1.299 1.027
operations
Less Distributions (.282) (.569) (.617) (.640) (.680) (.689)
From net interest
income
From net (.010) - (.020) (.410) - -
realized gain
In excess of net - - (.010) - - -
realized gain
Total distributions (.292) (.569) (.647) (1.050) (.680) (.689)
Redemption fees added .000 .001 .000 .002 .001 .002
to paid in capital
Net asset value, end $ 11.100 $ 11.240 $ 11.200 $ 9.960 $ 11.840 $ 11.220
of period
TOTAL RETURN B, C 1.39% 5.65% 19.41% (7.61) 11.81% 9.72%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 328,992 $ 334,620 $ 358,849 $ 315,582 $ 450,113 $ 413,748
(000 omitted)
Ratio of expenses to .55% .55% .55% .55% .55% .55%
average net assets A
Ratio of expenses to .55% .52% .55% .55% .55% .55%
average net assets A D
after expense
reductions
Ratio of net interest 5.09% 5.15% 5.73% 5.83% 5.81% 6.21%
income to average A
net assets
Portfolio turnover rate 9% 30% 39% 11% 45% 11%
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
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.
E 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 the value of an
investment, assuming reinvestment of the fund's dividend income and capital
gains (the profits earned upon the sale of securities that have grown in
value), and the effect of the fund's $5 account closeout fee on an average
sized account. Yield measures the income paid by a fund. Since a money
market fund tries to maintain a $1 share price, yield is an important
measure of performance. If Fidelity had not reimbursed certain fund
expenses, the past five years and life of fund total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan Connecticut Municipal 1.52% 3.04% 14.66% 20.07%
Money Market Fund
Connecticut Tax-Free 1.43% 2.83% 13.47% 26.81%
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on March 4, 1991. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the Connecticut tax-free money
market funds average, which reflects the performance of mutual funds with
similar objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 11 mutual funds. (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 MAY 31, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Connecticut Municipal 3.04% 2.77% 2.97%
Money Market Fund
Connecticut Tax-Free 2.83% 2.56% 3.11%
Money Market Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/2/97 3/3/97 12/2/96 9/2/96 5/27/96
Spartan Connecticut 3.26% 2.89% 3.06% 3.02% 3.19%
Municipal
Money Market Fund
Connecticut Tax-Free 2.91% 2.72% 2.84% 2.70% 2.91%
Money Market Funds
Average
Spartan Connecticut 5.31% 4.68% 4.97% 4.90% 5.19%
Municipal
Money Market Fund -
Tax-equivalent
Portion of fund's income 9.73% 20.77% 17.51% 18.51% 13.63%
subject to state taxes
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
An interview with Deborah Watson, Portfolio Manager of Spartan Connecticut
Municipal Money Market Fund
Q. WHAT HAS THE INVESTMENT ENVIRONMENT BEEN LIKE, DEB?
A. At the beginning of the period, most market participants expected the
Federal Reserve Board to keep short-term interest rates steady as a result
of moderate economic growth and no signs of inflation. However, that
sentiment changed during the first quarter of 1997, as unemployment fell
and fears arose that higher labor costs would translate into higher prices.
Fed Chairman Alan Greenspan, speaking before the Joint Economic Committee
of Congress on March 20, said that the Fed's objective was to fight
inflation pre-emptively. That is, he indicated the Fed might raise rates to
head off potential inflation in the future, even though any increase in
price indices had been marginal. Shortly thereafter on March 25, the Fed
followed through and raised the rate banks charge each other for overnight
loans - known as the fed funds rate - by 0.25% to 5.50%. As the Fed's May
meeting approached, many in the market expected the Fed to raise rates
again.
Q. BUT THE FED HELD OFF . . .
A. That's right. Preliminary information indicated that economic growth
started to slow in the second quarter. In addition, such price indices as
the producer price index (PPI) and the consumer price index (CPI) continued
to show no signs of inflation. As a result, the Fed stood pat and indicated
that it was reverting to its usual posture - waiting to react to inflation
news before changing rates - rather than maintaining its pre-emptive
strategy.
Q. WHAT WAS YOUR STRATEGY OVER THIS PERIOD?
A. At the beginning of the period, the fund's average maturity was at 52
days. It rolled down somewhat through January, as I focused new investments
on shorter-term securities due to the limited supply of longer-term
instruments in the Connecticut market. I maintained the maturity in the 37-
to 40-day range through the end of April. Toward the end of the period, I
sought to extend it by purchasing longer-term investments that offered
attractive yields because they incorporated the expectation of future
interest rate increases. In addition, the yield advantage offered by
longer-term fixed-rate securities compared to shorter-term variable rate
notes tends to be more pronounced in the Connecticut market than elsewhere.
As a result, it's often advantageous to buy the longer securities. By the
end of May, the fund's average maturity was 48 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1997, was 3.27%, compared to 3.05%
six months earlier. The latest yield was the equivalent of a taxable yield
of 5.35% for Connecticut investors in the 38.88% combined federal and state
tax bracket, and does not reflect that a portion of the fund's income was
subject to state income taxes. The fund's total return during the six-month
period was 1.52%. That beat the total return of 1.43% for the Connecticut
tax-free money market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. I think the Fed and the markets will continue to scrutinize every
economic number released. Any indications of economic weakening continuing
into the third quarter should postpone additional rate increases by the
Fed. However, I believe it is quite possible for growth to pick up in the
second half of the year, and we may see the Fed raise rates at that time.
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
FUND NUMBER: 425
TRADING SYMBOL: SPCXX
START DATE: March 4, 1991
SIZE: as of May 31, 1997,
more than $189 million
MANAGER: Deborah Watson,
since 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.
NOTE TO SHAREHOLDERS:
effective July 1, 1997, after
the period covered by this
report, Scott Orr was named
Portfolio Manager of Spartan
Connecticut Municipal Money
Market Fund.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND % OF FUND % OF FUND
ASSETS ASSETS ASSETS
5/31/97 11/30/96 5/31/96
0 - 30 62 73 59
31 - 90 24 3 28
91 - 180 3 12 8
181 - 397 11 12 5
WEIGHTED AVERAGE MATURITY
5/31/97 11/30/96 5/31/96
Spartan Connecticut 48 days 52 days 47 days
Municipal Money Market
Fund
Connecticut Tax-Free 46 days 57days 27 days
Money Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1997 AS OF NOVEMBER 30, 1996
Row: 1, Col: 1, Value: 16.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 12.0
Row: 1, Col: 5, Value: 51.0
Variable rate demand
notes (VRDNs) 60%
Commercial paper
(including CP mode) 17%
Tender bonds 11%
Municipal
notes 6%
Other 6%
Variable rate demand
notes (VRDNs) 51%
Commercial paper
(including CP mode) 12%
Tender bonds 9%
Municipal
notes 12%
Other 16%
Row: 1, Col: 1, Value: 6.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 3, Value: 11.0
Row: 1, Col: 4, Value: 17.0
Row: 1, Col: 5, Value: 60.0
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1997 (UNAUDITED)
Showing Percentage of Investments in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 0.5%
Kern County Gen. Oblig. TRAN 4.50% 10/2/97 $ 1,000,000 $ 1,003,236
CONNECTICUT - 77.6%
Clipper Tax Exempt Trust Participating VRDN,
Series 94-1, 3.91% (Liquidity Facility State Street
Bank & Trust Co.) (c) 4,898,125 4,898,126
Connecticut Dev. Auth. Arpt. Facs. Rev.
(Bradley Arpt. Hotel) VRDN:
Series 1997 A, 3.80%, LOC Kredietbank N.V. 1,200,000 1,200,000
Series 1997 B, 3.80%, LOC Royal Bank of Canada 1,000,000 1,000,000
Connecticut Dev. Auth. Health Care Rev.
(Corp. for Independent Living Proj.) Series 1990, 3.70%,
LOC Chase Bank, VRDN 8,500,000 8,500,000
Connecticut Dev. Auth. Ind. Dev. VRDN:
(Rojo Enterprises LLC) 4.10%, LOC Fleet Bank NA 1,000,000 1,000,000
(W.E. Bassett Co. Proj.) Series 1986, 4.10%,
LOC Bank of Boston (b) 1,000,000 1,000,000
Connecticut Dev. Auth. Poll. Cont. Rev. VRDN
(Lt. & Pwr. Co. Proj.):
Series 1993 A, 3.80%, LOC Deutsche Bank 2,900,000 2,900,000
Series 1993 B, 3.90%,
LOC Union Bank of Switzerland (b) 7,500,000 7,500,000
Series 1996 A, 4% (BPA Societe Generale, France)
(AMBAC Insured) (b) 4,700,000 4,700,000
(United Illuminating Co. Proj.) Series 1996 A, 3.80%
LOC Union Bank of Switzerland (b) 1,300,000 1,300,000
Connecticut Dev. Auth. Solid Waste Disp. Facs. Rev. VRDN:
(Exeter Energy Proj.):
Series 1989 A, 3.85%, LOC Sanwa Bank (b) 2,600,000 2,600,000
Series 1989 B, 3.85%, LOC Sanwa Bank (b) 2,800,000 2,800,000
Series 1989 C, 3.85%, LOC Sanwa Bank (b) 400,000 400,000
(Rand-Whitney Containerboard Proj.) 3.60%,
LOC Chase Manhattan Bank (b) 3,300,000 3,300,000
Connecticut Gen. Oblig.:
Bonds:
4.75% 8/15/97 880,000 881,660
5% 6/15/98 1,000,000 1,012,574
Series 1996 D, 3.75% 12/01/97 2,250,000 2,251,859
Series 1997 A, 6% 3/01/98 3,000,000 3,053,476
Econ. Recovery Notes:
4.75%, 6/15/97 700,000 700,274
5% 12/15/97 2,400,000 2,416,980
Participating VRDN, Series MGT-27, 3.95%,
(Liquidity Facility Morgan Guaranty Trust Co.) (c) 775,000 775,000
(BPA Bayerische Landesbank) Series B, 3.90%, VRDN 3,000,000 3,000,000
Connecticut Health & Ed. Facs. Auth. Rev.:
Participating VRDN, (Yale Univ.) Series BT-203, 4%
(Liquidity Facility Bankers Trust) (c) 3,000,000 3,000,000
(Charlotte Hungerford Hosp.) Series B, 3.60%,
LOC Bank of Boston, VRDN 2,900,000 2,900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. Rev. Bonds:
(Yale Univ.):
Series L, 3.55% 6/30/97, CP mode $ 1,900,000 $ 1,900,000
Series N, 3.55% 6/30/97, CP mode 2,700,000 2,700,000
Series O, 3.55% 6/30/97, CP mode 3,200,000 3,200,000
Series S, 3.60% 7/15/97, CP mode 1,000,000 1,000,000
Series S, 3.80% 7/21/97, CP mode 7,000,000 7,000,000
Connecticut Hsg. Fin. Auth.:
Bonds (Hsg. Mtg. Fin. Prog.):
Series 1989 D, 3.85% 7/21/97, CP mode (b) 1,800,000 1,800,000
Series 1989 D, 3.80% 8/13/97, CP mode (b) 800,000 800,000
Series 1990 C, 3.65% 7/25/97
(BPA Sakura Bank Ltd.), CP mode (b) 1,600,000 1,600,000
Participating VRDN, Series PT-81, 4.05%,
(Liquidity Facility Rabobank Nederland, N.V.) (b)(c) 1,480,000
1,480,000
Series 1995 G, 3.80% (BPA Morgan Guaranty Trust Co.)
(AMBAC Insured) VRDN 5,200,000 5,200,000
Connecticut Muni. Elec. Energy Coop. Rev. Bonds
(Pwr. Supply Sys.) Series 1995 A:
3.25% 6/11/97, LOC Fleet Bank NA, CP mode 1,100,000 1,100,000
3.70% 7/18/97, LOC Fleet Bank NA, CP mode 500,000 500,000
Connecticut Reg. School (District #14) BAN 4% 6/4/98 1,700,000 1,706,562
Connecticut Second Lien Spl. Tax Oblig.
(Transport Infrastructure Purp.) Series1, 3.85%,
LOC Commerzbank, VRDN 16,080,000 16,080,000
Connecticut Spl. Assessment Unemployment Rev. Bonds
Series 1993 C, 3.90%, tender 7/1/97 (FGIC Insured)
(Liquidity Facility FGIC Security Purchase Inc.) 15,600,000 15,600,319
Danbury Gen. Oblig. BAN:
3.75% 8/08/97 390,000 390,358
3.75% 8/08/97 4,300,000 4,301,335
East Haven Gen. Oblig. BAN:
4.00% 9/3/97 1,200,000 1,200,446
4.25% 9/3/97 3,000,000 3,003,122
Guilford Gen. Oblig. BAN 4.25% 10/15/97 725,000 726,435
Hartford Redev. Auth. (Underwood Towers Proj.) 3.65%,
(FSA Insured) (BPA Barclays Bank) VRDN 1,600,000 1,600,000
New Canaan Gen. Oblig. BAN 3.75% 3/10/98 5,200,000 5,212,402
Newtown Gen. Oblig. Bonds 6% 6/15/97 (MBIA Insured) 81,5000 815,816
Stamford Gen. Oblig. BAN 4% 4/01/98 5,100,000 5,116,014
Stamford Hsg. Auth. Mutimodal Rev. (Morgan Street Proj.)
Series 1994, 3.90%, LOC Deutsche Bank, VRDN (b) 2,500,000 2,500,000
149,622,758
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - 13.0%
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Participating VRDN (c):
Series PA-114, 3.85%
(Liquidity Merrill Lynch & Co. Inc.) $ 4,235,000 $ 4,235,000
Series PA-125, 3.85%
(Liquidity Merrill Lynch & Co. Inc.) 1,610,000 1,610,000
Puerto Rico Commonwealth Pub. Impt.:
Gen. Oblig. Bonds, Series 1989 A,
7% 7/01/97, (FGIC Insured) 1,400,000 1,404,114
Participating VRDN (c):
Series BT-165, 3.91%
(Liquidity Facility Bankers Trust Co.) 2,142,000 2,142,000
Series PA-97, 3.85%, (MBIA Insured)
(Liquidity Facility Merrill Lynch & Co.) 2,145,000 2,145,000
Series PT-63, 3.85%,
(Liquidity Facility Bayerische Hypotheken) 3,655,000 3,655,000
Rev. Rfdg. Bonds: Series 1987, 7.25% 7/1/97 400,000 409,207
Puerto Rico Gov't. Dev. Bank Rev., 3.55%,
LOC Credit Suisse First Boston 1,000,000 1,000,000
Puerto Rico Elec. Pwr. Auth. Rev.:
Bonds:
Series K, 9.25% 7/1/97 500,000 512,253
9.375% 7/1/97 1,650,000 1,690,749
Participating VRDN, Series BT-105, 3.725%
(Liquidity Facility Bankers Trust Co.) (c) 3,978,000 3,978,000
(Muni. Sec. Trust Rec. SGA 44) Series AA,
3.80%, tender 8/08/97,
(Liquidity Facility Societe Generale France) 1,235,000 1,235,000
Puerto Rico Ind. Med. Higher Ed. & Cont. Facs. Fin. Auth.
Bonds (Inter. American Univ.) Series 1988, 3.55% 6/19/97,
LOC Bank Of Tokyo-Mitsubishi Ltd., CP mode 1,000,000 1,000,000
25,016,323
OTHER - 8.9%
Municipal Central Cash Fund (d)(e) 17,063,592 17,063,593
TOTAL INVESTMENTS - 100% $ 192,705,910
Total Cost for Income Tax Purposes $ 192,705,910
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
TRAN - Tax and Revenue 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.
4. Information in this report regarding holdings by state and security
types do not reflect the holdings of the Municipal Central Cash Fund. A
listing of the Municipal Central Cash Fund's holdings as of its most recent
fiscal period end is available upon request.
5. At the period end, the seven-day yield of the Municipal Central Cash
Fund was 3.90% The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
On 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>
MAY 31, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 192,705,910
See accompanying schedule
Cash 93,957
Receivable for investments sold 1,800,380
Interest receivable 1,516,549
TOTAL ASSETS 196,116,796
LIABILITIES
Payable for investments purchased $ 6,822,576
Distributions payable 14,820
Accrued management fee 78,486
Other payables and accrued expenses 1,163
TOTAL LIABILITIES 6,917,045
NET ASSETS $ 189,199,751
Net Assets consist of:
Paid in capital $ 189,204,014
Accumulated net realized gain (loss) on investments (4,263)
NET ASSETS, for 189,204,014 shares outstanding $ 189,199,751
NET ASSET VALUE, offering price and redemption price per $1.00
share ($189,199,751 (divided by) 189,204,014 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
INTEREST INCOME $ 3,285,905
EXPENSES
Management fee $ 462,914
Non-interested trustees' compensation 1,704
Total expenses before reductions 464,618
Expense reductions (1,964) 462,654
NET INTEREST INCOME 2,823,251
REALIZED AND UNREALIZED GAIN (LOSS) (312)
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from (353)
accretion of market discount
NET GAIN (LOSS) (665)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,822,586
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,823,251 $ 5,492,417
Net interest income
Net realized gain (loss) (312) 9,482
Increase (decrease) in net unrealized gain from (353) 353
accretion of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,822,586 5,502,252
FROM OPERATIONS
Distributions to shareholders from net interest income (2,823,251) (5,492,417)
Share transactions at net asset value of $1.00 per share 105,440,185 204,280,325
Proceeds from sales of shares
Reinvestment of distributions from net interest income 2,757,791 5,308,500
Cost of shares redeemed (105,971,863) (198,246,723)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 2,226,113 11,342,102
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,225,448 11,351,937
NET ASSETS
Beginning of period 186,974,303 175,622,366
End of period $ 189,199,751 $ 186,974,303
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED NOVEMBER 30,
ENDED
MAY 31, 1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .015 .030 .034 .023 .022 .030
Investment
Operations
Net interest income
Less Distributions
From net interest (.015) (0.30) (.034) (.023) (.022) (.030)
income
Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
TOTAL RETURN B, C 1.52% 3.08% 3.41% 2.28% 2.21% 3.08%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 189,200 $ 186,974 $ 175,622 $ 167,056 $ 163,102 $ 86,672
period (000 omitted)
Ratio of expenses to .50% A .50% .50% .50% .24% .02%
average net assets D D
Ratio of net interest 3.04% A 3.04% 3.36% 2.25% 2.17% 2.90%
income to average
net 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.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Connecticut Municipal Income Fund (the income fund) is a fund of
Fidelity Court Street Trust. Spartan Connecticut Municipal Money Market
Fund (the money market fund) 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 income 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. Securities including
restricted securities for which quotations are not readily available are
valued at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
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.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
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 income 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds may invest in the Municipal
Central Cash Fund (the Cash Fund) managed by FMR Texas, an affiliate of
Fidelity Management & Research Company (FMR). The Cash Fund is an open-end
money market fund available only to investment companies and other accounts
managed by FMR and its affiliates. The Cash Fund seeks preservation of
capital, liquidity, and current income by investing in high-quality,
short-term municipal securities of various states and municipalities.
Income distributions from the Cash Fund are declared daily and paid monthly
from net interest income. Income distributions received by the funds are
recorded as interest income in the accompanying financial statements.
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. Information regarding
restricted securities is included under the caption "Other Information" at
the end of each applicable fund's schedule of investments. At the end of
the period, the funds had no investments in restricted securities
(excluding 144A issues).
2. OPERATING POLICIES -
CONTINUED
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.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $14,404,136 and $19,723,101, respectively.
The market value of futures contracts opened and closed during the period
amounted to $16,806,294 and $8,409,632, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, 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 $790
and $1,163 for the income and money market funds, respectively. Effective
April 1, 1997, the transaction fees were eliminated for the income fund.
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.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund with the fund's
custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of the fund's
expenses. During the period, the income and money market funds' expenses
were reduced by $7,271 and $1,964 respectively, under these arrangements.
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.
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(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
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Sarah H. Zenoble, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant
Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates * - INCOME FUND
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy * - INCOME FUND
Gerald C. McDonough *
Thomas R. Williams *
* INDEPENDENT TRUSTEES
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINES FOR QUICKEST SERVICE
