SPARTAN(REGISTERED TRADEMARK)
FLORIDA
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1998
(2_FIDELITY_LOGO_GRAPHICS) (REGISTERED TRADEMARK)
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.
INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 21 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE 25 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 27 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 29 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS
AND ONE YEAR.
INVESTMENTS 30 A COMPLETE LIST OF THE FUND'S INVESTMENTS.
FINANCIAL STATEMENTS 37 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 41 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 44 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 45
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Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
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:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. 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 NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL INCOME 7.40% 35.97% 69.69%
LB FLORIDA MUNICIPAL BOND 7.73% 37.78% N/A
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 6.93% 32.05% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period
- - in this case, 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 market
value-weighted index of Florida investment-grade municipal bonds with
maturities of one year or more. 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 one year average represents a peer group of 62 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 NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL INCOME 7.40% 6.34% 8.20%
LB FLORIDA MUNICIPAL BOND 7.73% 6.62% N/A
FLORIDA MUNICIPAL DEBT FUNDS AVERAGE 6.93% 5.71% N/A
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
Spartan FL Muni Income LB Municipal Bond
00427 LB015
1992/03/31 10000.00 10000.00
1992/04/30 10172.61 10089.00
1992/05/31 10350.03 10207.75
1992/06/30 10575.20 10379.03
1992/07/31 11028.26 10690.20
1992/08/31 10779.40 10585.97
1992/09/30 10823.45 10655.20
1992/10/31 10580.52 10550.46
1992/11/30 10944.39 10739.42
1992/12/31 11095.24 10849.07
1993/01/31 11245.75 10975.24
1993/02/28 11812.46 11372.22
1993/03/31 11626.24 11252.01
1993/04/30 11765.70 11365.54
1993/05/31 11841.80 11429.42
1993/06/30 12066.54 11620.18
1993/07/31 12101.29 11635.40
1993/08/31 12393.62 11877.65
1993/09/30 12566.59 12012.93
1993/10/31 12600.06 12036.12
1993/11/30 12423.65 11930.08
1993/12/31 12745.45 12181.92
1994/01/31 12914.00 12321.04
1994/02/28 12524.91 12001.93
1994/03/31 11935.22 11513.21
1994/04/30 12024.45 11610.84
1994/05/31 12139.04 11711.51
1994/06/30 12056.43 11639.95
1994/07/31 12310.26 11853.31
1994/08/31 12320.58 11894.32
1994/09/30 12130.96 11719.71
1994/10/31 11814.13 11511.57
1994/11/30 11530.36 11303.44
1994/12/31 11886.42 11552.23
1995/01/31 12279.67 11882.39
1995/02/28 12704.70 12227.93
1995/03/31 12848.58 12368.43
1995/04/30 12858.11 12383.03
1995/05/31 13293.09 12778.17
1995/06/30 13130.49 12667.00
1995/07/31 13237.10 12787.08
1995/08/31 13405.68 12949.22
1995/09/30 13499.13 13031.19
1995/10/31 13706.26 13220.67
1995/11/30 13961.59 13440.00
1995/12/31 14100.58 13569.15
1996/01/31 14182.96 13671.60
1996/02/29 14061.09 13579.32
1996/03/31 13892.16 13405.77
1996/04/30 13847.66 13367.84
1996/05/31 13843.25 13362.49
1996/06/30 14002.86 13508.01
1996/07/31 14127.09 13630.93
1996/08/31 14122.39 13627.66
1996/09/30 14310.34 13818.45
1996/10/31 14461.71 13974.73
1996/11/30 14742.11 14230.47
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
1997/05/31 14946.39 14469.55
1997/06/30 15099.85 14623.65
1997/07/31 15539.17 15028.73
1997/08/31 15369.96 14887.91
1997/09/30 15538.41 15064.63
1997/10/31 15627.27 15161.49
1997/11/30 15728.03 15250.64
1997/12/31 15941.23 15473.15
1998/01/31 16156.40 15632.83
1998/02/28 16143.45 15637.52
1998/03/31 16136.19 15651.28
1998/04/30 16043.28 15580.69
1998/05/31 16289.98 15827.34
1998/06/30 16323.37 15889.70
1998/07/31 16400.59 15929.58
1998/08/31 16649.55 16175.69
1998/09/30 16825.46 16377.24
1998/10/31 16816.46 16376.91
1998/11/30 16892.27 16434.40
IMATRL PRASUN SHR__CHT 19981130 19981216 085531 R00000000000083
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Florida Municipal Income Fund on March 31, 1992,
shortly after the fund started. As the chart shows, by November 30,
1998, the value of the investment would have grown to $16,892 - a
68.92% increase on the initial investment. For comparison, look at how
the Lehman Brothers Municipal Bond Index - a market value-weighted
index of investment-grade municipal bonds with maturities of one year
or more, did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 would have grown to $16,434 - a
64.34% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL
DO TOMORROW. BOND PRICES,
FOR EXAMPLE, GENERALLY MOVE
IN THE OPPOSITE DIRECTION OF
INTEREST RATES. IN TURN, THE SHARE
PRICE, RETURN AND YIELD OF A
FUND THAT INVESTS IN BONDS WILL
VARY. THAT MEANS IF YOU SELL
YOUR SHARES DURING A MARKET
DOWNTURN, YOU MIGHT LOSE
MONEY. BUT IF YOU CAN RIDE
OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
DIVIDEND RETURNS 4.77% 5.00% 5.10% 6.31% 5.01%
CAPITAL RETURNS 2.63% 1.69% 0.49% 14.78% -12.20%
TOTAL RETURNS 7.40% 6.69% 5.59% 21.09% -7.19%
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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, if
any, paid by the fund are reinvested.
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DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.26(CENTS) 26.17(CENTS) 52.57(CENTS)
ANNUALIZED DIVIDEND RATE 4.46% 4.50% 4.55%
30-DAY ANNUALIZED YIELD 3.82% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.97% - -
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DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $11.62 over the past one
month, $11.59 over the past six months and $11.55 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% 1998 federal tax bracket,
but does not reflect the payment of the federal alternative minimum
tax, if applicable.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Prospects were bright for
fixed-income markets at the
beginning of the 12-month period
ending November 30, 1998, with
positive U.S. economic news and
the Federal Reserve Board's
reluctance to raise interest rates
playing key roles. However,
near-record issuance of municipal
bonds, greeted by only moderate
enthusiasm, continued to contribute
to their underperformance
relative to taxable bonds. For the
12-month period, the Lehman
Brothers Municipal Bond Index -
a popular measure of the
municipal bond market - returned
7.76%. By comparison, the
Lehman Brothers Aggregate Bond
Index - a widely followed
measure of taxable bond
performance - returned 9.45%
during the period. Year-to-date
municipal bond issuance of over
$253 billion has already exceeded
all of last year's total, and is on
track to top the record $293 billion
muni-bond issuance during 1993.
Despite the tepid demand, munis
were yielding at the end of the
period about the same as 30-year
Treasuries - the safe haven of
choice during the market's
downdraft in the late summer and
early fall. While the recent equity
rally has put further pressure on
municipal bond prices, their yields
are historically high, which may
stimulate demand in the near
term. Munis, like the majority of
fixed-income issues, also have
been bolstered by three recent
interest-rate cuts by the Federal
Reserve Board, which dropped the
fed funds rate to 4.75%.
An interview with Christine Thompson, Portfolio Manager of Spartan
Florida Municipal Income Fund
Q. HOW DID THE FUND PERFORM, CHRISTINE?
A. For the 12-month period that ended November 30, 1998, the fund had
a total return of 7.40%. To get a sense of how the fund did relative
to its competitors, the Florida municipal debt funds average returned
6.93% during the same one-year period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers Florida Municipal Bond
Index - which tracks the types of securities in which the fund invests
- - returned 7.73% for the same 12-month period.
Q. WHAT WERE THE KEY FACTORS BEHIND THE FUND'S PERFORMANCE?
A. Among the fund's top performers were lower-quality,
investment-grade bonds - such as those rated Baa by Moody's Investors
Service, which made up roughly 10% of the fund's investments during
much of the period. In the face of falling interest rates, investors
increasingly sought out Baa-rated bonds because they offered an
attractive combination of investment-grade credit quality and yields
in excess of higher-rated bonds. Not only was there a growing demand
for Baa-rated bonds, but there also was a limited supply of them.
Taken together, the stronger demand and weaker supply helped Baa-rated
bonds outpace their higher-rated counterparts during much of the
period.
Q. GIVEN THEIR RELATIVELY ATTRACTIVE YIELDS AND GOOD PERFORMANCE, WHY
DID YOU CUT BACK THE FUND'S STAKE IN BAA-RATED BONDS COMPARED TO SIX
MONTHS AGO?
A. For one thing, less than two percent of the Florida municipal
market is rated Baa. Because availability of those bonds was limited
and demand was strong, the Baa securities that were available often
were priced expensively in my view. That created market conditions
which provided attractive opportunities for me to lighten up the
fund's holdings in this sector. The additional yield Baa-rated bonds
offered compared to higher-quality municipals diminished throughout
most of the period. Essentially, investors were less worried about
defaults and consequently were not demanding a lot of additional yield
from Baa-rated securities to compensate for their lower credit
quality. However, because I became increasingly more concerned that
global economic turmoil might translate into slower U.S. economic
growth, and that lower-quality securities would lag higher-quality
bonds as a result, I reduced the fund's investments in the Baa-rated
sector.
Q. IN TERMS OF BONDS OF VARIOUS MATURITIES, WHICH DID THE FUND
EMPHASIZE THROUGHOUT THE YEAR?
A. The fund's investments were concentrated in bonds with intermediate
maturities of between five and 15 years, a strategy that generally was
a plus during the past 12 months. Based on Fidelity's quantitative
models, intermediate-maturity bonds offered the most attractive value
for their given interest-rate sensitivity.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Some of the fund's industrial development bonds were
disappointments because they lagged the overall municipal market
during the past several months. Industrial development bonds are
issued by a municipality to finance a fixed asset, such as a road to a
new factory, an airline terminal or other purpose deemed in the public
interest. Because an industrial development bond ultimately depends on
a corporation's ability to pay back interest and principal, the bond's
fortunes are tied to the health of that business. As investors became
more concerned about corporate profitability amid fears of a slowing
economy, industrial development bonds languished. I sold some of the
fund's bonds backed by corporate issuers in the paper and forest
industry where paper company earnings were curtailed due to a poor
pricing environment.
Q. CHRISTINE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
A. From historical measures, municipals were priced quite attractively
compared to their U.S. Treasury counterparts at the end of the period.
One indication of munis' cheap prices is that their yields are roughly
90% of Treasury yields; historically, municipals yield between 65% and
80% of Treasuries. If municipal bond yields - which move in the
opposite direction of their prices - move back to their historical
relationship with Treasuries because of more favorable supply and
demand conditions, they are likely to perform relatively well.
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.
CHRISTINE THOMPSON ON
FLORIDA'S ECONOMY:
"Florida's economy presently is quite
healthy, thanks in large part to the
strength in both employment and
tourism. The state's unemployment
rate fell to around 4%, while tourism
from U.S. residents remained strong
and helped to offset a decreasing
number of Latin American tourists.
"Looking ahead to 1999, I see
continued, albeit somewhat slower,
economic growth. Protracted
problems in Latin America could
put pressure on Florida's
export-related industries and serve
to curtail travelers from these
countries. Tourism from U.S.
residents is also predicted to slow if
the national economy weakens.
That said, I believe that Florida's
economy will do better than that of
the nation as a whole as job growth
is strong and the state's favorable
climate and quality of life continue
to attract new residents."
FUND FACTS
GOAL: high current income
exempt from federal income tax
and 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 November 30,
1998, more than $448 million
MANAGER: Christine Thompson,
since July 1998; manager,
various Spartan and Fidelity
municipal income funds;
joined Fidelity in 1985
(checkmark)
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
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TOP FIVE SECTORS AS OF NOVEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
TRANSPORTATION 19.1 16.1
ELECTRIC UTILITIES 15.3 15.7
GENERAL OBLIGATIONS 11.0 9.6
HEALTH CARE 10.5 15.4
ESCROWED/PRE-REFUNDED 10.5 10.4
</TABLE>
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 11.3 12.0
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 6.5 6.7
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
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 65.90000000000001
ROW: 1, COL: 2, VALUE: 19.8
ROW: 1, COL: 3, VALUE: 6.8
ROW: 1, COL: 4, VALUE: 3.6
ROW: 1, COL: 5, VALUE: 3.9
AAA 65.9%
AA, A 19.8%
BAA 6.8%
NOT RATED 3.6%
SHORT-TERM
INVESTMENTS 3.9%
AAA 64.2%
AA, A 17.8%
BAA 10.5%
NOT RATED 3.5%
SHORT-TERM
INVESTMENTS 4.0%
ROW: 1, COL: 1, VALUE: 64.2
ROW: 1, COL: 2, VALUE: 17.8
ROW: 1, COL: 3, VALUE: 10.5
ROW: 1, COL: 4, VALUE: 3.5
ROW: 1, COL: 5, VALUE: 4.0
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 NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
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MUNICIPAL BONDS - 96.1%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - 94.8%
Alachua County Health Facilities Auth. Health
Facilities Rev. Rfdg. (Avmed/Santa Fe Health
Sys. Proj.):
6% 11/15/09 (Escrowed to Maturity) (f) Baa1 $ 2,780,000 $ 3,055,496
6.05% 11/15/16 (Escrowed to Maturity) (f) Baa1 6,230,000 7,087,871
Broward County Hsg. Fin. Auth. Single Family Aaa 1,225,000 1,312,808
Mtg. Rev. 6.65% 8/1/21 (e)
Broward County Resource Recovery Rev. (SES A3 10,770,000 11,449,587
Broward Co. LP South Proj.) 7.95% 12/1/08
Broward County Spl. Oblig. Rfdg.:
5.5% 1/1/02 (AMBAC Insured) Aaa 1,365,000 1,435,816
5.5% 1/1/04 (AMBAC Insured) Aaa 2,320,000 2,492,051
5.5% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,803,562
Dade County Aviation Rev.:
(Miami Int'l. Arpt.) Series B, 5% 10/1/11 (FSA Aaa 3,300,000 3,401,574
Insured) (e)
Rfdg.:
(Miami Int'l. Arpt.) Series A:
5.75% 10/1/03 (FSA Insured) (e) Aaa 1,800,000 1,942,884
5.75% 10/1/04 (FSA Insured) (e) Aaa 5,000,000 5,444,300
Series B, 6.3% 10/1/05 (AMBAC Insured) Aaa 1,200,000 1,379,340
Series C, 5.5% 10/1/11 (MBIA Insured) Aaa 5,200,000 5,646,056
Series D, 5.75% 10/1/09 (AMBAC Aaa 2,125,000 2,334,631
Insured) (e)
Series Y, 5.3% 10/1/05 Aa3 3,460,000 3,689,398
Dade County Gen. Oblig.:
Rfdg.:
(Pub. Impt.) 7.5% 6/1/04 (FSA Insured) Aaa 2,400,000 2,831,016
(Seaport):
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,405,555
6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,813,660
Series DD, 7.7% 10/1/07 (AMBAC Insured) Aaa 1,820,000 2,304,957
Dade County Gtd Entitlement Rev.:
(Cap. Appreciation) 0% 8/1/18 (AMBAC Aaa 14,835,000 4,470,972
Insured) (Pre-Refunded to 2/1/06 @
40.446) (f)
Rfdg. (Cap. Appreciation) Series B, 0% Aaa 1,810,000 1,610,936
2/1/02 (MBIA Insured)
Dade County Resource Recovery Facilities Rev. Aaa 5,000,000 5,403,550
Rfdg. 5.5% 10/1/09 (AMBAC Insured) (e)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County School District Series 1995, 5.5% Aaa $ 2,000,000 $ 2,177,100
8/1/12 (MBIA Insured) (Pre-Refunded to
8/1/04 @ 101) (f)
Dade County Seaport Rev. Rfdg. Series 95:
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,549,208
6.2% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,164,480
Dade County Spl. Oblig. Rfdg. Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,463,491
0% 10/1/04 (AMBAC Insured) (Escrowed to Aaa 5,045,000 3,993,773
Maturity) (f)
Dade County Wtr. & Swr. Sys. Rev.:
5.25% 10/1/21 (FGIC Insured) Aaa 2,970,000 3,050,101
6.25% 10/1/06 (FGIC Insured) Aaa 1,500,000 1,728,390
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,186,180
Dunedin Hosp. Rev. Rfdg. (Mease Health Care Aaa 1,400,000 1,496,726
Sys.) 5.25% 11/15/06 (MBIA Insured)
Dunedin Util. Sys. Rev. Rfdg. 6.25% 10/1/11 Aaa 1,360,000 1,614,633
(FGIC Insured)
Duval County Hsg. Fin. Auth. Single Family Mtg. Aaa 510,000 537,974
Rev. Series C, 7.7% 9/1/24 (FGIC Insured),
LOC Govt. Nat'l. Mtg. Assoc.
Duval County School District Rfdg. 6.3% 8/1/06 Aaa 5,000,000 5,425,950
(AMBAC Insured)
Escambia County Sales Tax Rev. Rfdg. 5.55% Aaa 2,000,000 2,147,040
1/1/07 (FGIC Insured)
Escambia County Utils. Auth. Util. Sys. Rev. Aaa 1,500,000 1,765,815
Series B, 6.25% 1/1/15 (FGIC Insured)
Escambia County Health Facilities Auth. Health
Facilities Rev. Rfdg.:
(Baptist Hosp. & Baptist Manor):
6.75% 10/1/14 BBB+ 695,000 774,077
6.75% 10/1/14 (Pre-Refunded to 10/1/03 BBB+ 2,555,000 2,900,743
@ 102) (f)
(Baptist Hosp., Inc.) Series B, 6% 10/1/14 BBB+ 2,825,000 2,979,612
Florida Board of Ed. (Pub. Ed.):
Series 1994 C, 5.4% 6/1/06 Aa2 1,500,000 1,632,375
Series A, 5% 6/1/05 Aa2 2,810,000 2,983,967
Series B, 5.625% 6/1/08 Aa2 2,000,000 2,184,020
Series E, 5.25% 6/1/23 Aa2 1,750,000 1,774,483
Series F, 5.5% 6/1/17 Aa2 3,000,000 3,171,360
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Div. Board Fin. Dept. Gen. Svcs. Rev.:
(Dept. of Envir. Preservation 2000) Series A:
5.25% 7/1/10 (MBIA Insured) Aaa $ 5,000,000 $ 5,335,000
5.7% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,257,220
5.75% 7/1/11 (AMBAC Insured) Aaa 3,000,000 3,267,540
Rfdg. (Dept. of Envir. Protection 2000) Series Aaa 3,000,000 3,200,700
A, 5% 7/1/06 (FSA Insured)
Florida Gen. Oblig.:
(Jacksonville Trans.) Series A, 5.75% 7/1/04 Aa2 1,955,000 2,135,290
(Right of Way Trans.):
Series A, 5% 7/1/15 Aa2 3,000,000 3,048,690
Series B, 5.5% 7/1/09 Aa2 3,810,000 4,176,789
Florida Hsg. Fin. Agcy. Multi-family Hsg. Rev. Rfdg.:
(Multi-Family Park Colony Proj.) Series D, 5.1% AA- 2,500,000 2,537,675
4/1/13, LOC Mellon Bank NA, Pittsburgh
(Single Family Mtg.):
Series A:
6.35% 7/1/14 Aaa 1,180,000 1,257,314
6.55% 7/1/14 (e) Aaa 1,405,000 1,508,296
Series B, 6.55% 7/1/17 (e) Aaa 1,180,000 1,260,311
Florida Mid-Bay Bridge Auth. Rev. Series A:
6.875% 10/1/22 (Escrowed to Maturity) (f) - 3,000,000 3,754,620
7.5% 10/1/17 (c) - 1,700,000 1,887,986
Florida Muni. Pwr. Agcy. Rev. Rfdg. (Stanton II
Proj.):
4.5% 10/1/16 (AMBAC Insured) Aaa 4,400,000 4,216,916
4.5% 10/1/27 (AMBAC Insured) Aaa 7,000,000 6,479,550
Florida Tpk. Auth. Tpk. Rev.:
(Dept. of Trans.) Series A:
5.5% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,544,970
5.5% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,301,050
5.5% 7/1/14 (FGIC Insured) Aaa 1,500,000 1,591,500
Rfdg. Series A, 5.25% 7/1/09 (FGIC Insured) Aaa 6,740,000 7,251,094
Series A, 6.25% 7/1/09 (FGIC Insured) Aaa 1,825,000 1,995,546
(Pre-Refunded to 7/1/02 @ 101) (f)
Gainesville Utils. Sys. Rev.:
Rfdg. Series B, 5.5% 10/1/13 Aa3 1,500,000 1,588,980
Series B, 6.5% 10/1/10 Aa3 1,600,000 1,913,328
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Greater Orlando Aviation Auth. Orlando Arpt.
Facilities Rev.:
Series A, 6.5% 10/1/05 (FGIC Insured) (e) Aaa $ 3,550,000 $ 3,961,871
5.25% 10/1/23 (FGIC Insured) (e) Aaa 3,000,000 3,048,120
Hillsborough County Aviation Auth. Rev.
(Tampa Int'l. Arpt.) Series A:
6.9% 10/1/11 (FGIC Insured) Aaa 2,270,000 2,375,623
6.9% 10/1/11 (FGIC Insured) (Pre-Refunded Aaa 1,980,000 2,082,029
to 10/1/99 @ 102) (f)
Hillsborough County Cap. Impt. Prog. Rev. Rfdg. Aaa 1,000,000 1,133,070
6% 8/1/06 (FGIC Insured)
Hillsborough County Gen. Oblig. Rfdg. (Envir. Aaa 2,080,000 2,238,870
Sensitive LDS Acquisition & Protection) 6%
7/1/02 (AMBAC Insured) (Escrowed to
Maturity) (f)
Hillsborough County Port District Spl. Refing. Rev.
Rfdg. (Tampa Port Auth.):
6.5% 6/1/03 (FSA Insured) (e) Aaa 2,000,000 2,209,980
6.5% 6/1/05 (FSA Insured) (e) Aaa 2,000,000 2,274,860
Hillsborough County School Board Ctfs. of Ptrn. Aaa 4,370,000 4,762,645
Rfdg. (Master Lease Prog.) Series A, 5.5%
7/1/14 (MBIA Insured)
Hillsborough County Util. Rev. Rfdg. (Cap.
Appreciation) Series A:
0% 8/1/05 (MBIA Insured) Aaa 6,500,000 5,000,970
0% 8/1/06 (MBIA Insured) Aaa 5,000,000 3,671,350
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,937,520
Indian River County Wtr. & Swr. Rev. Rfdg. Aaa 2,000,000 2,194,680
Series A, 5.5% 9/1/11 (FGIC Insured)
Jacksonville Elec. Auth. Rev. Rfdg. (Saint John
River Issue 2):
Series 10, 6.5% 10/1/03 Aa2 1,500,000 1,673,535
Series 16, 5.375% 10/1/13 Aa2 4,000,000 4,172,400
Series 5, 7% 10/1/09 Aa2 2,490,000 2,595,999
Jacksonville Excise Tax Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Insured) Aaa 1,000,000 1,101,880
Series A, 6.5% 10/1/11 (AMBAC Insured) Aaa 1,200,000 1,258,452
(Pre-Refunded to 10/1/99 @ 102) (f)
Series B, 5.6% 10/1/08 (FGIC Insured) (e) Aaa 2,300,000 2,401,568
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Health Facilities Auth. Hosp. Rev.:
(Charity Obligated Group) Series A:
5.25% 8/15/08 (MBIA Insured) Aaa $ 3,720,000 $ 4,020,390
5.5% 8/15/05 (MBIA Insured) Aaa 1,600,000 1,737,728
Rfdg. (Baptist Med. Ctr. Proj.) Series A, 7.3% Aaa 500,000 520,455
6/1/19 (Pre-Refunded to 6/1/99 @ 102) (f)
Jacksonville Health Facilities Auth. Ind. Dev. Rev.:
(Cypress Village Proj./Nat'l. Benevolent Baa1 2,740,000 3,209,499
Assoc.) 8% 12/1/24
Rfdg. (Cypress Village Proj./Nat'l. Benevolent
Assoc.):
6.25% 12/1/23 Baa1 2,710,000 2,904,524
7% 12/1/14 Baa1 1,000,000 1,099,870
7% 12/1/22 Baa1 2,000,000 2,198,980
Jacksonville Ind. Dev. Rev. Rfdg. (Cargill, Inc. - 1,250,000 1,338,163
Proj.) 6.4% 3/1/11 (h)
Jacksonville Port Auth. Arpt. Rev. Rfdg. 5% Aaa 2,550,000 2,677,500
10/1/05 (FGIC Insured) (e)
Jacksonville Sales Tax Rev. (River City Aaa 1,900,000 2,028,345
Rennaissance Proj.) 5.65% 10/1/14
(FGIC Insured)
Lakeland Elec. & Wtr. Rev.:
(Cap. Appreciation) 0% 10/1/09 (FGIC Aaa 2,840,000 1,795,732
Insured)
Rfdg. (Jr. Sub- Lien):
6.25% 10/1/02 (FGIC Insured) Aaa 5,180,000 5,647,081
6.5% 10/1/06 (FGIC Insured) Aaa 2,200,000 2,573,296
6.5% 10/1/07 (FGIC Insured) Aaa 1,095,000 1,291,005
Leesburg Hosp. Rev. Rfdg. (Leesburg Reg'l. Med.
Ctr. Proj.):
Series A, 5.6% 7/1/08 A3 5,000,000 5,393,450
Series B, 5.625% 7/1/13 A3 2,795,000 2,894,614
Leon County Rev. Rfdg. 5.5% 10/1/07 Aaa 1,000,000 1,108,550
(MBIA Insured)
Leon County Cap. Impt. Rev. Rfdg. Series B:
5.25% 10/1/03 (AMBAC Insured) (b) Aaa 1,635,000 1,702,100
5.25% 10/1/04 (AMBAC Insured) (b) Aaa 1,720,000 1,794,872
5.25% 10/1/08 (AMBAC Insured) (b) Aaa 2,115,000 2,231,917
5.25% 10/1/09 (AMBAC Insured) (b) Aaa 2,225,000 2,350,179
5.25% 10/1/11 (AMBAC Insured) (b) Aaa 2,465,000 2,569,491
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Melbourne Arpt. Rev. Rfdg.:
5.75% 10/1/99 (MBIA Insured) (e) Aaa $ 215,000 $ 219,167
6.25% 10/1/00 (MBIA Insured) (e) Aaa 230,000 240,884
6.25% 10/1/01 (MBIA Insured) (e) Aaa 240,000 255,941
6.25% 10/1/02 (MBIA Insured) (e) Aaa 260,000 282,092
6.25% 10/1/03 (MBIA Insured) (e) Aaa 270,000 297,321
6.5% 10/1/04 (MBIA Insured) (e) Aaa 290,000 326,975
6.5% 10/1/05 (MBIA Insured) (e) Aaa 310,000 354,900
6.5% 10/1/06 (MBIA Insured) (e) Aaa 325,000 376,584
6.75% 10/1/07 (MBIA Insured) (e) Aaa 350,000 415,086
6.75% 10/1/08 (MBIA Insured) (e) Aaa 375,000 450,855
6.75% 10/1/09 (MBIA Insured) (e) Aaa 400,000 483,596
6.75% 10/1/10 (MBIA Insured) (e) Aaa 425,000 516,647
Miami Dade County Aviation Rev.:
Rfdg. Series A, 5% 10/1/05 (FGIC Insured) (e) Aaa 2,550,000 2,693,030
Series C, 5.25% 10/1/12 (MBIA Insured) (e) Aaa 5,185,000 5,445,961
Miami Dade County School Board Ctfs. of Prtn.
Rfdg. Series C:
5% 8/1/02 (FSA Insured) Aaa 2,000,000 2,095,140
5% 8/1/25 (FSA Insured) Aaa 2,000,000 1,977,020
Naples Hosp. Rev. Rfdg. (Naples Cmnty. Hosp., Aaa 1,500,000 1,581,105
Inc. Proj.) 5.1% 10/1/07 (MBIA Insured)
North Broward Hosp. District Hosp. Rev. Rfdg. Aaa 950,000 1,042,369
6.4% 1/1/06 (MBIA Insured) (Pre-Refunded to
1/1/02 @ 102) (f)
North Miami Edl. Facilities Rev. (Johnson & - 6,605,000 6,948,064
Wales Univ. Proj.) Series A, 6.125% 4/1/20
Orange County Health Facilities Auth. Rev.:
(Orlando Reg'l. Healthcare) Series A, 6.25% Aaa 2,500,000 2,935,750
10/1/18 (MBIA Insured)
Rfdg. (Adventist Health Sys.) 5.75% 11/15/05 Aaa 2,000,000 2,208,000
(AMBAC Insured)
Orange County Hsg. Fin. Auth. Single Family AAA 1,450,000 1,555,125
Mtg. Rev. (Mtg. Backed Securities Prog.) 6.4%
10/1/14 (e)
Orange County Tourist Dev. Tax Rev. Rfdg. Aaa 1,795,000 2,047,754
Series A, 5.85% 10/1/08 (MBIA Insured)
Orlando & Orange County Expressway Auth. Aaa 2,200,000 2,320,780
Rev. 5.097% 7/1/04 (FGIC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg.:
Sub-Series A, 5% 10/1/20 Aa2 $ 5,745,000 $ 5,722,307
Sub-Series D, 6.75% 10/1/17 Aa2 7,000,000 8,532,020
6% 10/1/10 Aa1 2,505,000 2,885,735
Series A, 6.5% 10/1/20 (Pre-Refunded to Aaa 5,055,000 5,536,893
10/1/01 @ 102) (f)
5.538% 10/31/13 Aa2 9,400,000 9,887,484
Palm Beach County Health Facilities Auth. Rev.:
(Retirement Cmnty.-Adult Cmnty. Total Svc., A- 2,500,000 2,602,200
Inc.) 5.625% 11/15/20
Rfdg. (Waterford Proj.) 5.5% 10/1/15 BBB 2,000,000 2,007,100
Pasco County Solid Waste Disp. & Resource
Recovery Sys. Rev. Rfdg.:
5.75% 4/1/04 (AMBAC Insured) (e) Aaa 3,380,000 3,656,856
6% 4/1/10 (AMBAC Insured) (e) Aaa 5,770,000 6,485,653
6% 4/1/11 (AMBAC Insured) (e) Aaa 5,000,000 5,636,400
Pensacola Arpt. Rev. Rfdg. Series A, 6.125% Aaa 1,500,000 1,673,610
10/1/18 (MBIA Insured) (e)
Plantation Health Facilities Auth. Rev. (Covenant - 2,500,000 2,910,875
Retirement Cmnty., Inc.) 7.75% 12/1/22
(Pre-Refunded to 12/1/02 @ 102) (f)
Polk County Ind. Dev. Auth. Ind. Dev. Rev. Aaa 1,445,000 1,586,292
(Winter Haven Hosp.) Series 2, 6.25% 9/1/15
(MBIA Insured)
Port of Saint Lucie Util. Rev. Rfdg. & Impt. Aaa 4,750,000 4,812,320
Series A, 5.125% 9/1/27 (MBIA Insured)
Sarasota County Util. Sys. Rev. Rfdg. Series A, Aaa 1,830,000 2,056,023
6% 10/1/05 (FGIC Insured)
Sarasota Wtr. & Swr. Util. Rev. Rfdg. 6.25% Aaa 1,450,000 1,628,220
10/1/04 (FGIC Insured)
South Miami Health Facilities Auth. Hosp. Rev. Aaa 1,980,000 2,153,329
Rfdg. (Baptist Health Sys. Oblig. Group) 5.5%
10/1/05 (MBIA Insured)
Sumter County School District Rev. (Multi-District Aaa 1,000,000 1,287,840
Ln. Prog.) 7.15% 11/1/15 (FSA Insured)
Sunrise Util. Sys. Rev. (Cap. Appreciation) Series A:
0% 10/1/00 (AMBAC Insured) Aaa 1,070,000 1,006,239
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 1,106,824
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 868,420
Sunshine State Govt. Fing. Commission Rev. Aaa 1,000,000 1,093,790
Series A, 5.5% 10/1/05 (FGIC Insured)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Tampa Health Sys. Rev.:
(Allegheny Health Sys. - St. Joseph):
6.7% 12/1/07 (MBIA Insured) Aaa $ 2,535,000 $ 2,801,758
(Pre-Refunded to 12/1/01 @ 102) (f)
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 165,996
(Pre-Refunded to 12/1/01 @ 102) (f)
(Catholic Heath East) Series A 1:
4.7% 11/15/10 (MBIA Insured) Aaa 2,000,000 2,039,680
5% 11/15/09 (MBIA Insured) Aaa 1,000,000 1,057,560
5.5% 11/15/08 (MBIA Insured) Aaa 1,000,000 1,105,280
5.5% 11/15/14 (MBIA Insured) Aaa 1,000,000 1,091,340
Tampa Sports Auth. Rev. (Stadium Proj.) 6% Aaa 2,235,000 2,483,934
1/1/05 (MBIA Insured)
Volusia County Edl. Facilities Auth. Rev. (Embry Baa2 2,500,000 2,735,675
Riddle Aeronaut Univ.) Series A, 6.125%
10/15/16
430,398,845
PUERTO RICO - 1.3%
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg. Series W:
6.5% 7/1/05 (MBIA Insured) Aaa 3,000,000 3,444,840
6.5% 7/1/06 (MBIA Insured) Aaa 2,000,000 2,328,620
5,773,460
TOTAL MUNICIPAL BONDS 436,172,305
(Cost $408,538,304)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL NOTES - 3.9%
FLORIDA - 3.9%
Dade County Ind. Dev. Auth. Facilities Rev. Rfdg. (Florida Pwr. 1,900,000 1,900,000
& Lt. Co. Proj.) Series 1993, 3.3%, VRDN (d)
Jacksonville Poll. Cont. Rev. Rfdg. (Florida Pwr. & Lt. Co. Proj.) 200,000 200,000
3.25%, VRDN (d)
Saint Lucie County Poll. Cont. Rev. Rfdg. (Florida Pwr. & Lt. Co. 1,500,000 1,500,000
Proj.) 3.25%, VRDN (d)
Tampa Sports Auth. Rev. Participating VRDN Series SGA 61, 13,900,000 13,900,000
3.45% (Liquidity Facility Societe Generale) (d)(g)
TOTAL MUNICIPAL NOTES 17,500,000
(Cost $17,500,000)
TOTAL INVESTMENT IN SECURITIES - 100% $ 453,672,305
(Cost $426,038,304)
</TABLE>
FUTURES CONTRACTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EXPIRATION UNDERLYING UNREALIZED
DATE FACE AMOUNT GAIN/LOSS
PURCHASED
50 Bond Buyer Municipal Bond Dec. 1998 $ 6,323,438 $ (160,769)
Index Contracts
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 1.4%.
</TABLE>
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(b) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(c) Security or 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 $249,881.
(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(e) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(f) Security collateralized by an amount sufficient to pay interest
and principal.
(g) Provides evidence of ownership in one or more underlying municipal
bonds.
(h) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISTION DATE ACQUISITION COST
JACKSONVILLE IND. DEV. REV. RFDG. 7/9/92 $ 1,250,000
(CARGILL, INC. PROJ.) 6.4% 3/1/11
OTHER INFORMATION
The fund invested in securities that are not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $1,338,163
or 0.3% of net assets (see Note 2 of Notes to Financial Statements).
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 84.2% AAA, AA, A 87.7%
Baa 4.9% BBB 1.9%
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 Moody's or S&P amounted to 3.6%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:
Transportation 19.1%
Electric Utilities 15.3
General Obligations 11.0
Health Care 10.5
Escrowed/Pre-Refunded 10.5
Special Tax 10.2
Water & Sewer 8.3
Resource Recovery 7.1
Others (individually less than 5%) 8.0
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $426,070,568. Net unrealized appreciation
aggregated $27,601,737, of which $27,622,910 related to appreciated
investment securities and $21,173 related to depreciated investment
securities.
The fund hereby designates approximately $1,996,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at value (cost $426,038,304) - $ 453,672,305
See accompanying schedule
Cash 5,125
Receivable for fund shares sold 652,464
Interest receivable 5,649,359
Receivable for daily variation on futures contracts 23,438
TOTAL ASSETS 460,002,691
LIABILITIES
Payable for investments purchased on a $ 10,317,806
delayed delivery basis
Payable for fund shares redeemed 264,331
Distributions payable 734,962
Accrued management fee 200,973
Other payables and accrued expenses 2,412
TOTAL LIABILITIES 11,520,484
NET ASSETS $ 448,482,207
Net Assets consist of:
Paid in capital $ 417,481,138
Accumulated undistributed net realized gain (loss) 3,527,837
on investments
Net unrealized appreciation (depreciation) on investments 27,473,232
NET ASSETS, for 38,442,003 shares outstanding $ 448,482,207
NET ASSET VALUE, offering price and redemption price per $11.67
share ($448,482,207 (divided by) 38,442,003 shares)
</TABLE>
<TABLE>
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STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 22,010,727
EXPENSES
Management fee $ 2,370,588
Non-interested trustees' compensation 1,328
Total expenses before reductions 2,371,916
Expense reductions (10,285) 2,361,631
NET INTEREST INCOME 19,649,096
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 4,069,181
Futures contracts 108,607 4,177,788
Change in net unrealized appreciation (depreciation) on:
Investment securities 6,975,183
Futures contracts (188,061) 6,787,122
NET GAIN (LOSS) 10,964,910
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 30,614,006
FROM OPERATIONS
</TABLE>
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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 19,649,096 $ 18,929,649
Net interest income
Net realized gain (loss) 4,177,788 3,031,450
Change in net unrealized appreciation (depreciation) 6,787,122 3,539,368
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 30,614,006 25,500,467
FROM OPERATIONS
Distributions to shareholders (19,649,096) (18,929,649)
From net interest income
From net realized gain (1,809,138) -
TOTAL DISTRIBUTIONS (21,458,234) (18,929,649)
Share transactions 72,078,855 58,696,099
Net proceeds from sales of shares
Reinvestment of distributions 13,227,479 11,745,882
Cost of shares redeemed (54,386,216) (59,766,704)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 30,920,118 10,675,277
FROM SHARE TRANSACTIONS
Redemption fees 15,554 14,605
TOTAL INCREASE (DECREASE) IN NET ASSETS 40,091,444 17,260,700
NET ASSETS
Beginning of period 408,390,763 391,130,063
End of period $ 448,482,207 $ 408,390,763
OTHER INFORMATION
Shares
Sold 6,244,717 5,240,127
Issued in reinvestment of distributions 1,145,917 1,048,112
Redeemed (4,716,574) (5,343,762)
Net increase (decrease) 2,674,060 944,477
</TABLE>
<TABLE>
<CAPTION>
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FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, $ 11.420 $ 11.230 $ 11.180 $ 9.740 $ 11.290
beginning of period
Income from Investment Operations .526 .539 .546 .573 .587
Net interest income
Net realized and unrealized .300 .190 .054 1.439 (1.352)
gain (loss)
Total from investment operations .826 .729 .600 2.012 (.765)
Less Distributions
From net interest income (.526) (.539) (.546) (.573) (.587)
From net realized gain (.050) - (.005) - (.200)
Total distributions (.576) (.539) (.551) (.573) (.787)
Redemption fees added to paid .000 .000 .001 .001 .002
in capital
Net asset value, end of period $ 11.670 $ 11.420 $ 11.230 $ 11.180 $ 9.740
TOTAL RETURN A 7.40% 6.69% 5.59% 21.09% (7.19)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 448,482 $ 408,391 $ 391,130 $ 395,991 $ 335,551
(000 omitted)
Ratio of expenses to average .55% .55% .55% .55% .54% B
net assets
Ratio of expenses to average net .55% .55% .54% C .55% .54%
assets after expense reductions
Ratio of net interest income to 4.56% 4.81% 4.96% 5.37% 5.49%
average net assets
Portfolio turnover rate 24% 25% 28% 65% 49%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income but does not include 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 certain fund expenses, the past five years and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL MONEY MARKET 3.17% 16.69% 20.55%
All Tax-Free Money Market Funds Average 2.99% 15.66% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on August 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 tax-free
money market funds with similar objectives tracked by IBC Financial
Data, Inc. The past one year average represents a peer group of 448
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 NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN FL MUNICIPAL MONEY MARKET 3.17% 3.13% 3.02%
All Tax-Free Money Market Funds Average 2.99% 2.96% n/a
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
11/30/98 8/31/98 6/1/98 3/2/98 12/1/97
Spartan Florida Municipal 2.85% 3.03% 3.45% 3.07% 3.46%
Money Market Fund
All Tax-Free Money Market 2.71% 2.80% 3.22% 2.92% 3.28%
Funds Average
Spartan Florida Municipal 4.45% 4.73% 5.39% 4.80% 5.41%
Money Market Fund -
Tax-equivalent
Portion of fund's income 3.80% 16.03% 20.13% 14.49% 1.32%
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 all
tax-free money market funds average. Or you can look at the fund's
tax-equivalent yield, which is based on an effective 1998 federal tax
rate of 36%. A portion of the fund's income may be subject to the
alternative minimum tax. Figures for the all tax-free money market
funds average are from IBC Financial Data, Inc.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields on
taxable investments. However, a
straight comparison between the
two may be misleading because
it ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the tax-free
yield - makes the comparison
more meaningful. Keep in mind
that the U.S. government
neither insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Spartan Florida
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the fund's fiscal
year, November 30, 1998. During this time, the Federal Reserve Board
lowered the rate banks charge each other for overnight loans - known
as the fed funds rate - three times. Each move consisted of an
"easing" of 0.25 percentage points; the fed funds rate fell from 5.50%
to 4.75%. These significant moves were unanticipated early in the
summer given the investment climate of the first eight months of the
reporting period. During that span, market sentiment reflected an
expectation of a fed "tightening," or raising of short-term interest
rates. Although inflation was generally non-existent, signs such as a
very low unemployment rate and sustained economic growth pointed to
the potential for the build-up of inflationary pressures.
International problems, especially in Asia, helped dampen economic
growth enough to keep the Fed on the sidelines - leaving interest
rates unchanged - through the second quarter of 1998. However, the
problems in global markets intensified starting in August.
Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?
A. Russia defaulted on some of its debt and the value of its currency,
the ruble, plummeted, sparking concerns that currency devaluations
would take place in other emerging market countries, such as those in
Latin America. Global stock markets went into a free fall, and
investors worldwide flocked to U.S. Treasuries in pursuit of a haven
safe enough to withstand this turmoil. Further problems arose in early
fall when rumors of the potential collapse of certain hedge funds hit
the market. Market sentiment quickly swung to an anticipation of Fed
rate cuts. The Fed followed through with 0.25 percentage point
decreases at the end of September, in a surprise move on October 15
between meetings of its Open Market Committee, and again on November
17. These moves were an attempt to bring stability back to world
markets, and appear to have succeeded.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?
A. For the first eight months of the period, I maintained the fund's
average maturity at a relatively neutral position, awaiting clearer
signs of the direction of interest rates. As the market began to
change in August, I looked aggressively to extend the fund's average
maturity. This strategy was typical for a falling rate environment, as
I sought to lock in attractive rates by buying longer-term securities.
From early August through the end of September 1998, I increased the
fund's average maturity from 25 to 48 days, and the maturity stood at
47 days at the end of the period. Typically, the fund receives large
inflows at the end of the calendar year, as many investors seek
shelter from the Florida intangible personal property tax. I have been
and will be investing this money - which will be in the fund only
temporarily - in short-term variable-rate securities. I'm doing so
because this money will not be in the fund for a long time and the
short-term, variable-rate securities will be easy to divest when
redemptions occur in early 1999. In addition, the fund's small 2.7%
short-term variable-rate stake in non-Florida securities will be
liquidated before the end of the calendar year, in order to protect
the fund from being subjected to the intangible tax.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 2.85%,
compared to 3.47% 12 months ago. The more recent seven-day yield was
the equivalent of a 4.45% taxable rate of return for Florida investors
in the 36% federal income tax bracket. Through November 30, 1998, the
fund's 12-month total return was 3.17%, compared to 2.99% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The market reflects uncertainty over the direction of the Fed's
interest rate policy. After three rate cuts, it appears that the Fed
wants to wait and see what effect its moves will have on the economy.
Typically, there is at least a six-month lag before the Fed's moves
start to influence the economy. Inflation remains tame, but
unemployment is low - often a harbinger of inflation as increased
labor costs are passed on to the consumer - and the economy has shown
signs of continued growth. While the Fed has gone a long way toward
addressing its concerns about the global markets, it appears poised to
lower rates further if some U.S. economic weakness develops or if
global turmoil resurfaces. However, it would be a surprise to most
market observers if the board did so before its Open Market Committee
meeting in February 1999.
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 EXEMPT FROM FEDERAL
INCOME TAX AND THE FLORIDA
INTANGIBLE TAX, AS IS CONSISTENT
WITH THE PRESERVATION OF CAPITAL
AND LIQUIDITY; THE FUND INVESTS
NORMALLY IN MUNICIPAL MONEY
MARKET SECURITIES
START DATE: AUGUST 24, 1992
FUND NUMBER: 428
TRADING SYMBOL: FSFXX
SIZE: AS OF NOVEMBER 30,
1998, MORE THAN $452 MILLION
MANAGER: SCOTT ORR, SINCE 1997;
MANAGER, VARIOUS FIDELITY AND
SPARTAN MONEY MARKET FUNDS:
JOINED FIDELITY IN 1989
(CHECKMARK)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 60 78 70
31 - 90 24 6 22
91 - 180 9 11 4
181 - 397 7 5 4
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Spartan Florida Municipal 47 DAYS 35 Days 33 Days
Money Market Fund
All Tax-Free Money Market Funds 45 DAYS 36 Days 50 Days
Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 56.0
ROW: 1, COL: 2, VALUE: 35.0
ROW: 1, COL: 3, VALUE: 3.0
ROW: 1, COL: 4, VALUE: 3.0
ROW: 1, COL: 5, VALUE: 3.0
ROW: 1, COL: 1, VALUE: 74.0
ROW: 1, COL: 2, VALUE: 15.0
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 1.0
ROW: 1, COL: 5, VALUE: 1.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 56%
COMMERCIAL PAPER
(INCLUDING CP MODE) 35%
TENDER BONDS 3%
MUNICIPAL NOTES 3%
OTHER 3%
VARIABLE RATE DEMAND
NOTES (VRDNS) 74%
COMMERCIAL PAPER
(INCLUDING CP MODE) 15%
TENDER BONDS 9%
MUNICIPAL NOTES 1%
OTHER 1%
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
<TABLE>
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MUNICIPAL SECURITIES - 100.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - 97.3%
Broward County Hsg. Fin. Auth. Multi-family Hsg. Rev. $ 1,800,000 $ 1,800,000
(Palm Aire-Oxford Proj.) Series 1990, 3.25% (Continental
Casualty Co. Guaranteed), VRDN (a)
Broward County Ind. Dev. Auth. Ind. Dev. Rev. 1,165,000 1,165,000
(RIB Associates Proj.) Series 1989, 3.3%, LOC SunTrust
Bank, Central FL NA, VRDN (a)(b)
Broward County Ind. Dev. Rev.:
(Femc & Fast Industries, Inc.) 3.3%, LOC Suntrust Bank, 1,500,000 1,500,000
South Florida NA, VRDN (a)(b)
(Heico Aerospace Corp. Proj.) 3.3%, LOC Suntrust Bank, 1,000,000 1,000,000
South Florida NA, VRDN (a)(b)
Clay County Hsg. Fin. Auth. Rev. Participating VRDN 2,845,000 2,845,000
Series PT 61, 3.35% (Liquidity Facility Bayerische
Hypo-und Vereinsbank AG) (a)(b)(d)
Dade County Aviation Rev. Participating VRDN Series PT 1083, 4,600,000 4,600,000
3.35% (Liquidity Facility Merrill Lynch & Co.) (a)(b)(d)
Dade County Gen. Oblig. Bonds Series I, 6.8% 7/1/99 3,605,000 3,675,106
(AMBAC Insured)
Dade County Ind. Dev. Auth. Ind. Dev. Rev.:
(Guastafeste Proj.):
Series 1987, 3.3%, LOC SunTrust Bank, Central FL NA, 2,475,000 2,475,000
VRDN (a)(b)
Series 1991, 3.3%, LOC SunTrust Bank, Miami NA, 1,275,000 1,275,000
VRDN (a)(b)
(Michael-Ann Russell Jewish Cmnty. Ctr.) 3.2%, LOC SunTrust 900,000 900,000
Bank, Miami NA, VRDN (a)(b)
(Royal Store Fixtures Corp. Proj.) 3.3%, LOC SunTrust Bank, 1,780,000 1,780,000
Miami NA, VRDN (a)(b)
Dade County Multi-family Hsg. Rev. (Biscayne View Apts. Proj.) 28,475,000 28,475,001
Series 1993, 3.5% (Commonwealth Life Ins. Co.
Guaranteed), VRDN (a)(b)
Dade County Wtr. & Swr. Sys. Rev. Participating VRDN 10,110,000 10,110,000
Series SG 74, 3.3% (Liquidity Facility Societe Generale) (a)(d)
Daytona Beach Halifax Med. Ctr. TAN Series 1998, 4% 2,650,000 2,653,302
4/15/99, LOC Barnett Bank NA
Escambia County Hsg. Fin. Auth. Single Family Mtg. Rev. 1,700,000 1,700,000
Participating VRDN Series PA 129, 3.35% (Liquidity Facility
Merrill Lynch & Co.) (a)(b)(d)
Escambia County Poll. Cont. Rev. Rfdg. (Monsanto Co. Proj.) 4,775,000 4,775,000
Series 1994, 3.25%, VRDN (a)
Escambia County Solid Waste Disp. Rev. (Monsanto Co. Proj.) 5,300,000 5,300,000
Series 1993, 3.35%, VRDN (a)(b)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Board of Ed. Participating VRDN:
Series 96C0905, Class A, 3.28% (Liquidity Facility Citibank, $ 9,900,000 $ 9,900,000
New York NA) (a)(d)
Series PA 339A, 3.3% (Liquidity Facility Merrill 4,600,000 4,600,000
Lynch & Co.) (a)(d)
Series ROC 35, 3.33% (Liquidity Facility Toronto 6,000,000 6,000,000
Dominion Bank) (a)(d)
Series SG 22, 3.3% (Liquidity Facility Societe 8,970,000 8,970,000
Generale) (a)(d)
Florida Board of Ed. Lottery Rev. Bonds Series B, 4,500,000 4,528,823
4.5% 7/1/99 (FGIC Insured)
Florida Board of Ed. Rfdg. Bonds (Pub. Ed.) Series C, 3,305,000 3,316,243
4% 6/1/99
Florida Gen. Oblig. Participating VRDN:
Series PA 163, 3.3% (Liquidity Facility Merrill 3,000,000 3,000,000
Lynch & Co.) (a)(d)
Series SG 43, 3.3% (Liquidity Facility Societe 10,110,000 10,110,000
Generale) (a)(d)
Florida Hsg. Fin. Agcy. Multi-family Hsg. Rev.:
(Ashley Lake Park II Proj.) Series 1989 J, 3.25%, 1,900,000 1,900,000
LOC Morgan Guaranty Trust Co., NY, VRDN (a)(b)
(Banyan Bay Apts. Proj.) 3.25%, LOC PNC Bank NA, 5,275,000 5,275,000
VRDN (a)(b)
(Heron Park Partners Ltd.) 3.25%, LOC NationsBank NA, 3,300,000 3,300,000
VRDN (a)(b)
Rfdg.:
(Brandon-Oxford Proj.) Series 1990 C, 3.25% (Continental 13,100,000 13,100,000
Casualty Co. Guaranteed), VRDN (a)
(Hillsborough-Oxford Proj.) Series D, 3.25% (Continental 5,590,000 5,590,000
Casualty Co. Guaranteed), VRDN (a)
Florida Hsg. Fin. Corp. Homeowner Mtg. Rev.:
Bonds Series 1998 5, 3.8%, tender 6/15/99 4,300,000 4,300,000
(FGIC Guaranteed)
Participating VRDN Series FRRI 12, 3.55% (Liquidity Facility 4,400,000 4,400,000
Bank of New York NA) (a)(b)(d)
Florida Local Govt. Fin. Commission:
Series A:
3.2% 2/18/99, LOC First Union Nat'l. Bank of North 3,500,000 3,500,000
Carolina, CP
3.35% 2/9/99, LOC First Union Nat'l. Bank of North 7,180,000 7,180,000
Carolina, CP
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Local Govt. Fin. Commission: - continued
Series A:
3.35% 2/10/99, LOC First Union Nat'l. Bank of $ 4,200,000 $ 4,200,000
North Carolina, CP
3.4% 2/8/99, LOC First Union Nat'l. Bank of 1,000,000 1,000,000
North Carolina, CP
3.65% 12/2/98, LOC First Union Nat'l. Bank of 1,430,000 1,430,000
North Carolina, CP
3.65% 12/3/98, LOC First Union Nat'l. Bank of 5,000,000 5,000,000
North Carolina, CP
Series B, 3.25% 1/20/99, LOC First Union Nat'l. Bank of 3,500,000 3,500,000
North Carolina, CP (b)
Florida Muni. Pwr. Agcy. Rev. Series A:
3.25% 3/12/99, LOC First Union Nat'l. Bank of 1,990,000 1,990,000
North Carolina, CP
3.35% 1/8/99, LOC First Union Nat'l. Bank of 1,480,000 1,480,000
North Carolina, CP
3.4% 1/13/99, LOC First Union Nat'l. Bank of 3,400,000 3,400,000
North Carolina, CP
3.7% 12/11/98, LOC First Union Nat'l. Bank of 990,000 990,000
North Carolina, CP
Fort Myers Impt. Rev. Participating VRDN Series PA 180, 1,560,000 1,560,000
3.35% (Liquidity Facility Merrill Lynch & Co.) (a)(d)
Gulf Breeze Rev. (Local Govt. Ln. Prog.) Series 1985 B, 3.1% 5,000,000 5,000,000
(FGIC Insured), VRDN (a)
Highlands County Health Facilities Auth. Rev. (Adventist Health
Sys. Sunbelt Proj.):
3.2% (MBIA Insured) (BPA First Nat'l. Bank of Chicago), 4,800,000 4,800,000
VRDN (a)
3.2%, LOC SunTrust Bank, Central FL NA, VRDN (a) 5,000,000 5,000,000
Hillsborough County Aviation Auth. Rev.:
2nd Series:
3.1% 3/9/99, LOC Nat'l. Westminster Bank PLC, CP (b) 5,100,000 5,100,000
3.4% 2/18/99, LOC Nat'l. Westminster Bank PLC, CP (b) 3,600,000 3,600,000
3.45% 2/24/99, LOC Nat'l. Westminster Bank PLC, CP (b) 1,000,000 1,000,000
3.1% 3/9/99, LOC Nat'l. Westminster Bank PLC, CP (b) 2,100,000 2,100,000
3.3% 2/24/99, LOC Nat'l. Westminster Bank PLC, CP (b) 600,000 600,000
3.4% 2/18/99, LOC Nat'l. Westminster Bank PLC, CP (b) 1,800,000 1,800,000
Hillsborough County Hsg. Fin. Auth. Multi-family Rev. 2,700,000 2,700,000
(Brandon Crossing Apts.) Series 1998 A, 3.25%, LOC
Amsouth Bank, Birmingham, VRDN (a)(b)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Hillsborough County Ind. Dev. Rev. (Vigo Importing Co. Proj.):
3.35%, LOC NationsBank NA, VRDN (a)(b) $ 1,175,000 $ 1,175,000
3.65%, LOC Barnett Bank NA, VRDN (a)(b) 1,300,000 1,300,000
Indian River County Hosp. District Hosp. Rev. Bonds:
Series 1988:
3.35% 2/18/99, LOC Kredietbank NV, CP mode 4,350,000 4,350,000
3.4% 2/24/99, LOC Kredietbank NV, CP mode 4,700,000 4,700,000
Series 1989:
3.05% 3/10/99, LOC Kredietbank NV, CP mode 2,500,000 2,500,000
3.4% 2/24/99, LOC Kredietbank NV, CP mode 1,800,000 1,800,000
Series 1990:
3.25% 3/19/99, LOC Kredietbank NV, CP mode 3,500,000 3,500,000
3.4% 2/24/99, LOC Kredietbank NV, CP mode 2,000,000 2,000,000
Jacksonville Elec. Auth. Rev.:
Series A, 3.35% 2/5/99, CP 4,500,000 4,500,000
Series C 1, 3.5% 2/23/99 (Liquidity Facility Morgan 3,500,000 3,500,000
Guaranty Trust Co., NY), CP
Jacksonville Health Facilities Auth. Hosp. Rev. Participating 14,820,000 14,820,000
VRDN Series 1996 M, 3.3% (Liquidity Facility Caisse des
Depots et Consignations) (a)(d)
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation Proj.) 4,600,000 4,600,000
Series 1987, 3.35%, LOC Barnett Bank NA, VRDN (a)
Jacksonville Poll. Cont. Rev. Rfdg. Bonds (Florida Pwr. & Lt. Co. 2,800,000 2,800,000
Proj.) Series 1992, 3.2% 2/12/99, CP mode
Lee County Hosp. Board Hosp. Rev. Bonds (Lee Memorial
Hosp. Proj.) Series 1997 B:
3.1% 3/11/99 (Liquidity Facility SunTrust Bank, 4,400,000 4,400,000
Central FL NA), CP mode
3.15% 3/11/99 (Liquidity Facility SunTrust Bank, 3,000,000 3,000,000
Central FL NA), CP mode
3.2% 3/9/99 (Liquidity Facility SunTrust Bank, 5,700,000 5,700,000
Central FL NA), CP mode
3.25% 2/12/99 (Liquidity Facility SunTrust Bank, 3,600,000 3,600,000
Central FL NA), CP mode
3.25% 2/12/99 (Liquidity Facility SunTrust Bank, 4,000,000 4,000,000
Central FL NA), CP mode
3.45% 12/1/98 (Liquidity Facility SunTrust Bank, 2,100,000 2,100,000
Central FL NA), CP mode
3.55% 12/17/98 (Liquidity Facility SunTrust Bank, 1,000,000 1,000,000
Central FL NA), CP mode
Miami Dade County School District TAN 4% 6/30/99 4,000,000 4,013,949
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Miami Dade County Single Family Mtg. Rev. Bonds Series 1998 B, $ 2,800,000 $ 2,800,000
3.45%, tender 10/1/99 (FGIC Guaranteed) (b)
Okeechobee County Solid Waste Rev. (Chambers Waste 8,600,000 8,600,000
Sys. Proj.) Series 1992, 3.35%, LOC Morgan Guaranty
Trust Co., NY, VRDN (a)(b)
Orange County Health Facilities Auth. Rev. Participating VRDN 3,985,000 3,985,000
Series PA 95, 3.7% (Liquidity Facility Merrill Lynch &
Co.) (a)(d)
Orange County Hsg. Fin. Auth. Hsg. Rev. (Westlake Club Proj.) 5,950,000 5,950,000
Series 1991 A, 3.3% (Continental Casualty Co.
Guaranteed), VRDN (a)
Orange County Hsg. Fin. Auth. Multi-family Hsg. Rev.:
(Regal Pointe Apts.) Series 1997 A, 3.25%, LOC 5,893,000 5,893,000
NationsBank NA, VRDN (a)(b)
(Wtr. View Club) Series 1997 D, 3.35%, LOC Key Bank, 4,000,000 4,000,000
NA, VRDN (a)(b)
Orange County School District TAN 3.1% 9/15/99 4,500,000 4,506,540
Orlando Util. Commission Wtr. & Elec. Rev.:
Rfdg. Participating VRDN Series SG 18, 3.3% (Liquidity 4,365,000 4,365,000
Facility Societe Generale) (a)(d)
Bonds Sub-Series C, 7% 10/1/23 (Pre-Refunded to 2,500,000 2,623,793
10/1/99 @ 102) (c)
Palm Beach County Hsg. Fin. Auth. Rev. (Lake Crystal Apts. 1,735,000 1,735,000
Proj. Phase II) Series 1988 A, 3.1%, LOC Citibank, New
York NA, VRDN (a)(b)
Palm Beach County Hsg. Fin. Auth. Single Family Mtg. 3,000,000 3,000,000
Purchase Rev. Bonds 3.75%, tender 7/1/99 (FGIC
Guaranteed) (b)
Palm Beach County Ind. Dev. Rev. (Benjamin Private School 3,000,000 3,000,000
Proj.) 3.2%, LOC Suntrust Bank, South Florida NA,
VRDN (a)
Pinellas County Hsg. Fin. Auth. Single Family Hsg. Rev. Bonds 3,305,000 3,305,000
3.7%, tender 2/1/99 (FGIC Guaranteed) (b)
Pinellas County Ind. Council Ind. Dev. Rev. (Hunter Douglas, 2,100,000 2,100,000
Inc.) 3.3%, LOC ABN-AMRO Bank NV, VRDN (a)(b)
Port of Saint Lucie Util. Rev. Participating VRDN Series PA 209, 2,800,000 2,800,000
3.3% (Liquidity Facility Merrill Lynch & Co.) (a)(d)
Saint Lucie County Poll. Cont. Rev. Rfdg. Bonds (Florida Pwr. & 3,500,000 3,500,000
Lt. Co. Proj.) Series 1994 A, 3.4% 1/4/99, CP mode
Saint Petersburg Cap. Impt. Rev. (Arpt. Proj.) Series 1997 C, 1,340,000 1,340,000
3.3%, LOC Suntrust Bank, Tampa Bay, VRDN (a)(b)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Sarasota County Hosp. District Rev. Bonds
(Sarasota Memorial Hosp.):
Series 1991, 3.5% 12/10/98, CP mode $ 4,300,000 $ 4,300,000
Series A:
3.05% 1/20/99 (Liquidity Facility SunTrust Bank, 3,500,000 3,500,000
Central FL NA), CP mode
3.1% 2/16/99 (Liquidity Facility SunTrust Bank, 2,000,000 2,000,000
Central FL NA), CP mode
3.3% 3/12/99 (Liquidity Facility SunTrust Bank, 4,400,000 4,400,000
Central FL NA), CP mode
3.35% 2/26/99 (Liquidity Facility SunTrust Bank, 4,400,000 4,400,000
Central FL NA), CP mode
Sunrise Util. Sys. Rev. Participating VRDN:
Series SGB 16, 3.33% (Liquidity Facility Societe 5,030,000 5,030,000
Generale) (a)(d)
Series SGB 17, 3.33% (Liquidity Facility Societe 2,325,000 2,325,000
Generale) (a)(d)
Sunshine State Govt. Fing. Commission Rev.:
Bonds Series 1986:
3.3% 1/22/99 (AMBAC Insured), CP mode 1,600,000 1,600,000
3.35% 2/1/99 (AMBAC Insured), CP mode 3,300,000 3,300,000
3.35% 2/1/99 (AMBAC Insured), CP mode 6,000,000 6,000,000
3.4% 1/4/99 (AMBAC Insured), CP mode 3,400,000 3,400,000
3.45% 2/17/99 (AMBAC Insured), CP mode 5,000,000 5,000,000
Series 1994 A:
3.25% 3/12/99 (Liquidity Facility Bank of Nova Scotia), CP 3,200,000 3,200,000
3.35% 2/19/99 (Liquidity Facility Bank of Nova Scotia), CP 4,500,000 4,500,000
3.4% 1/13/99 (Liquidity Facility Bank of Nova Scotia), CP 1,000,000 1,000,000
3.45% 2/17/99 (Liquidity Facility Bank of Nova Scotia), CP 4,400,000 4,400,000
432,465,757
ILLINOIS - 0.3%
Saint Charles Ind. Dev. Rev. (Pier 1 Imports-Midwest, Inc. Proj.) 1,300,000 1,300,000
Series 1986, 3.35%, LOC Bank One, Texas NA,
VRDN (a)(b)
NEVADA - 0.4%
Washoe County Gas Facilities Rev. (Sierra Pacific Pwr. Co.) 2,000,000 2,000,000
Series 1990, 3.45%, LOC Union Bank of Switzerland AG,
VRDN (a)(b)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK - 0.9%
Long Island Pwr. Auth. Elec. Sys. Rev. Sub Series 7, 3.3% $ 2,000,000 $ 2,000,000
(MBIA Insured) (BPA Cr. Suisse First Boston (BK)), VRDN (a)
New York City Gen. Oblig. Series 1995 B6, 3.35% 1,850,000 1,850,000
(MBIA Insured), VRDN (a)
3,850,000
TEXAS - 1.1%
Brazos River Poll. Cont. Rev. Rfdg. (Texas Utils. Elec. Co. Proj.) 2,000,000 2,000,000
Series 1996 A, 3.45% (AMBAC Insured) (BPA Bank of
New York NA), VRDN (a)(b)
Gulf Coast Waste Disp. Auth. Envir. Facilities Rev. 900,000 900,000
(Amoco Oil Co. Proj.) Series 1998, 3.45%, VRDN (a)(b)
Gulf Coast Waste Disp. Auth. Poll. Cont. & Solid Waste Rev. 2,000,000 2,000,000
(Amoco Oil Co. Proj.) Series 1996, 3.45%, VRDN (a)(b)
4,900,000
TOTAL INVESTMENT IN SECURITIES - 100% $ 444,515,757
Total Cost for Income Tax Purposes $ 444,515,757
</TABLE>
SECURITY TYPE ABBREVIATION
CP - COMMERCIAL PAPER
TAN - TAX ANTICIPATION NOTE
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Security collateralized by an amount sufficient to pay interest
and principal.
(d) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $54,000 of which $22,000, $4,000, $10,000 and $18,000
will expire on November 30, 2002, 2003, 2004 and 2005, respectively.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - SEE ACCOMPANYING $ 444,515,757
SCHEDULE
CASH 2,428
RECEIVABLE FOR INVESTMENTS SOLD 6,450,485
RECEIVABLE FOR FUND SHARES SOLD 5,265,550
INTEREST RECEIVABLE 3,126,201
TOTAL ASSETS 459,360,421
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 5,000,000
PAYABLE FOR FUND SHARES REDEEMED 1,234,647
DISTRIBUTIONS PAYABLE 65,569
ACCRUED MANAGEMENT FEE 180,880
OTHER PAYABLES AND ACCRUED EXPENSES 1,686
TOTAL LIABILITIES 6,482,782
NET ASSETS $ 452,877,639
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 452,931,703
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (54,064)
NET ASSETS, FOR 452,931,703 SHARES OUTSTANDING $ 452,877,639
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($452,877,639 (DIVIDED BY) 452,931,703 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 17,450,906
EXPENSES
MANAGEMENT FEE $ 2,411,851
NON-INTERESTED TRUSTEES' COMPENSATION 1,471
TOTAL EXPENSES BEFORE REDUCTIONS 2,413,322
EXPENSE REDUCTIONS (79,003) 2,334,319
NET INTEREST INCOME 15,116,587
NET REALIZED GAIN (LOSS) ON INVESTMENTS 1,483
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,118,070
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 15,116,587 $ 14,146,091
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 1,483 (18,438)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 15,118,070 14,127,653
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (15,116,587) (14,146,091)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 904,250,975 772,805,775
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 14,292,014 13,506,143
COST OF SHARES REDEEMED (887,072,623) (767,165,281)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 31,470,366 19,146,637
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,471,849 19,128,199
NET ASSETS
BEGINNING OF PERIOD 421,405,790 402,277,591
END OF PERIOD $ 452,877,639 $ 421,405,790
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT .031 .032 .031 .035 .024
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.031) (.032) (.031) (.035) (.024)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 3.17% 3.29% 3.17% 3.57% 2.47%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 452,878 $ 421,406 $ 402,278 $ 363,396 $ 337,530
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE NET .50% .50% .50% .50% .46% C
ASSETS
RATIO OF EXPENSES TO AVERAGE NET .48% D .49% D .47% D .50% .46%
ASSETS AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 3.13% 3.21% 3.15% 3.52% 2.43%
AVERAGE NET ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
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 require management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the income fund and
the money market fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. 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 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
among 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.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
generally accepted accounting principles. These differences, which may
result in distribution reclassifications, are primarily due to
differing treatments for futures transactions, market discount, and
losses deferred due to futures. 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 interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and
tax differences that will reverse in a subsequent period. Any taxable
gain remaining at fiscal year end is distributed in the following
year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading 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.
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. Each fund may receive compensation for
interest forgone in the purchase of a when-issued security. 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.
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
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS - CONTINUED period end. Losses may arise from
changes in the value of the underlying instruments or if the
counterparties do not perform under the contracts' terms. Gains
(losses) are realized upon the expiration or closing of the futures
contracts. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they
are traded.
RESTRICTED SECURITIES. 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 $152,664,132 and $100,480,315, respectively.
The market value of futures contracts opened and closed during the
period amounted to $21,198,824 and $21,865,018, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity
Management & Research Company (FMR) pays all expenses, except the
compensation of the non-interested Trustees and certain exceptions
such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate
of .55% and .50% of average net assets for the income and money market
funds, respectively.
FMR also bears the cost of providing shareholder services to each
fund. To offset the cost of providing these services, FMR or its
affiliates collected certain transaction fees from the money market
fund's shareholders which amounted to $5,023 for the period.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser,
Fidelity Investments Money Management, 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 certain funds with the
funds' custodian and transfer agent whereby credits realized as a
result of uninvested cash balances were used to reduce a portion of
each applicable fund's expenses. During the period, the income and
money market funds' expenses were reduced by $10,285 and $79,003,
respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court
Street Trust II and the Shareholders of Spartan Florida Municipal
Income Fund and Spartan Florida Municipal Money Market Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Florida Municipal Income Fund (a fund of Fidelity Court Street
Trust) and Spartan Florida Municipal Money Market Fund (a fund of
Fidelity Court Street Trust II) at November 30, 1998, and the results
of their operations, the changes in their net assets and the
financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the funds' management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used
and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits,
which included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 11, 1999
DISTRIBUTIONS
The Board of Trustees of Spartan Florida Municipal Income Fund voted
to pay to shareholders of record at the opening of business on record
date, the following distributions derived from capital gains realized
from sales of portfolio securities, and dividends derived from net
investment income:
PAY DATE 12/29/97 12/31/98
RECORD DATE 12/26/97 12/30/98
SHORT-TERM
CAPITAL GAINS $- $ .02
LONG-TERM
CAPITAL GAINS $ .05 $ .07
LONG-TERM
CAPITAL GAIN BREAKDOWN:
28% rate 33.96% -%
20% rate 66.04% 100%
During fiscal year ended 1998, 100% of the income and money market
funds' income dividends were free from federal income tax, and 15.82%
and 36.97%, respectively, of the funds' income dividends were subject
to the federal alternative minimum tax.
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 Xpress(registered trademark) provides 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.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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 500
Merrimack, NH 03054-0500
(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 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President -
INCOME FUND
Boyce I. Greer, Vice President -
MONEY MARKET FUND
Christine J. Thompson, Vice President -
INCOME FUND
Scott A. Orr, Vice President -
MONEY MARKET FUND
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
SFC-ANN-0199 68992
1.539163.101
ADVISORY BOARD
J. Gary Burkhead
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
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 (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(FIDELITY_LOGO_GRAPHIC) (REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
CONNECTICUT MUNICIPAL
FUNDS
AND
FIDELITY
CONNECTICUT MUNICIPAL
MONEY MARKET FUND
ANNUAL REPORT
NOVEMBER 30, 1998
(2_FIDELITY_LOGO_GRAPHICS) (REGISTERED TRADEMARK)
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENT CHANGES
11 INVESTMENTS
19 FINANCIAL STATEMENTS
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
23 PERFORMANCE
25 FUND TALK: THE MANAGER'S OVERVIEW
27 INVESTMENT CHANGES
28 INVESTMENTS
32 FINANCIAL STATEMENTS
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
36 PERFORMANCE
38 FUND TALK: THE MANAGER'S OVERVIEW
40 INVESTMENT CHANGES
41 INVESTMENTS
46 FINANCIAL STATEMENTS
NOTES 50 NOTES TO THE FINANCIAL STATEMENTS
REPORT OF INDEPENDENT 55 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 56
</TABLE>
Third party marks appearing herein are the property of their
respective owners. All other marks appearing herein are registered or
unregistered trademarks or service marks of FMR Corp. or an affiliated
company.
This report is printed on recycled paper using soy-based inks.
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:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. 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 past 10 years total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN CT MUNICIPAL INCOME 7.20% 33.54% 111.45%
LB CONNECTICUT 4 PLUS YEAR ENHANCED 7.80% 37.73% N/A
MUNICIPAL BOND
CONNECTICUT MUNICIPAL DEBT FUNDS 7.02% 31.09% 109.15%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Connecticut 4 Plus Year Enhanced Municipal Bond Index
- - a market value-weighted index of Connecticut investment-grade
municipal bonds with maturities of four years or more. 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 one year average represents a peer
group of 26 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 NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN CT MUNICIPAL INCOME 7.20% 5.96% 7.78%
LB CONNECTICUT 4 PLUS YEAR ENHANCED 7.80% 6.61% N/A
MUNICIPAL BOND
CONNECTICUT MUNICIPAL DEBT FUNDS 7.02% 5.56% 7.66%
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Spartan CT Muni Income LB Municipal Bond
00407 LB015
1988/11/30 10000.00 10000.00
1988/12/31 10149.30 10102.30
1989/01/31 10286.66 10311.22
1989/02/28 10188.38 10193.56
1989/03/31 10199.36 10169.20
1989/04/30 10477.25 10410.62
1989/05/31 10697.23 10626.85
1989/06/30 10876.06 10771.16
1989/07/31 10994.14 10917.76
1989/08/31 10878.24 10810.87
1989/09/30 10845.75 10778.65
1989/10/31 10974.37 10910.48
1989/11/30 11136.32 11101.41
1989/12/31 11208.26 11192.22
1990/01/31 11108.91 11139.28
1990/02/28 11209.89 11238.42
1990/03/31 11229.44 11241.79
1990/04/30 11054.14 11160.40
1990/05/31 11329.09 11404.03
1990/06/30 11444.20 11504.27
1990/07/31 11614.46 11673.39
1990/08/31 11405.63 11503.89
1990/09/30 11479.38 11510.45
1990/10/31 11652.60 11719.25
1990/11/30 11903.95 11954.92
1990/12/31 11958.27 12006.92
1991/01/31 12090.98 12168.06
1991/02/28 12167.11 12273.92
1991/03/31 12186.58 12278.34
1991/04/30 12341.46 12441.64
1991/05/31 12450.90 12552.25
1991/06/30 12354.65 12539.82
1991/07/31 12501.30 12692.55
1991/08/31 12637.12 12859.72
1991/09/30 12750.45 13027.15
1991/10/31 12876.14 13144.39
1991/11/30 12907.15 13181.07
1991/12/31 13223.47 13463.93
1992/01/31 13243.56 13494.63
1992/02/29 13250.10 13498.95
1992/03/31 13189.55 13503.94
1992/04/30 13259.26 13624.13
1992/05/31 13440.84 13784.48
1992/06/30 13705.64 14015.79
1992/07/31 14132.72 14435.98
1992/08/31 13932.69 14295.23
1992/09/30 14028.08 14388.72
1992/10/31 13789.00 14247.28
1992/11/30 14161.33 14502.45
1992/12/31 14310.16 14650.52
1993/01/31 14523.55 14820.90
1993/02/28 15114.06 15356.98
1993/03/31 14908.40 15194.65
1993/04/30 15045.81 15347.97
1993/05/31 15133.80 15434.22
1993/06/30 15401.89 15691.82
1993/07/31 15424.69 15712.38
1993/08/31 15774.56 16039.51
1993/09/30 15965.85 16222.20
1993/10/31 15974.40 16253.51
1993/11/30 15834.06 16110.31
1993/12/31 16167.29 16450.40
1994/01/31 16354.39 16638.26
1994/02/28 15904.46 16207.33
1994/03/31 15180.84 15547.37
1994/04/30 15311.27 15679.21
1994/05/31 15402.50 15815.15
1994/06/30 15306.85 15718.52
1994/07/31 15614.08 16006.64
1994/08/31 15649.21 16062.02
1994/09/30 15392.07 15826.23
1994/10/31 15049.24 15545.16
1994/11/30 14629.41 15264.10
1994/12/31 15033.03 15600.07
1995/01/31 15514.10 16045.92
1995/02/28 15988.43 16512.53
1995/03/31 16159.14 16702.26
1995/04/30 16177.61 16721.97
1995/05/31 16680.88 17255.57
1995/06/30 16530.79 17105.44
1995/07/31 16625.54 17267.60
1995/08/31 16856.91 17486.56
1995/09/30 16992.79 17597.25
1995/10/31 17208.69 17853.11
1995/11/30 17468.73 18149.29
1995/12/31 17606.77 18323.71
1996/01/31 17760.31 18462.05
1996/02/29 17673.52 18337.43
1996/03/31 17434.51 18103.08
1996/04/30 17397.94 18051.85
1996/05/31 17364.47 18044.63
1996/06/30 17583.59 18241.13
1996/07/31 17724.34 18407.13
1996/08/31 17704.51 18402.71
1996/09/30 17926.15 18660.35
1996/10/31 18133.83 18871.40
1996/11/30 18454.87 19216.74
1996/12/31 18352.79 19136.03
1997/01/31 18416.41 19172.20
1997/02/28 18571.60 19348.20
1997/03/31 18318.72 19090.29
1997/04/30 18463.01 19250.08
1997/05/31 18710.83 19539.60
1997/06/30 18905.82 19747.69
1997/07/31 19459.02 20294.71
1997/08/31 19249.46 20104.54
1997/09/30 19497.53 20343.18
1997/10/31 19612.49 20473.99
1997/11/30 19724.10 20594.38
1997/12/31 20029.24 20894.85
1998/01/31 20233.08 21110.49
1998/02/28 20219.45 21116.82
1998/03/31 20212.60 21135.40
1998/04/30 20133.07 21040.08
1998/05/31 20428.47 21373.14
1998/06/30 20490.18 21457.36
1998/07/31 20518.06 21511.21
1998/08/31 20833.33 21843.56
1998/09/30 21111.29 22115.73
1998/10/31 21084.46 22115.29
1998/11/30 21145.15 22192.91
IMATRL PRASUN SHR__CHT 19981130 19981215 140956 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Connecticut Municipal Income Fund on November 30,
1988. As the chart shows, by November 30, 1998, the value of the
investment would have grown to $21,145 - a 111.45% increase on the
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 and capital gains, if any, reinvested, the same $10,000
would have grown to $22,193 - a 121.93% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN
THE OPPOSITE DIRECTION OF
INTEREST RATES. IN TURN, THE SHARE
PRICE, RETURN AND YIELD OF A
FUND THAT INVESTS IN BONDS WILL
VARY. THAT MEANS IF YOU SELL
YOUR SHARES DURING A MARKET
DOWNTURN, YOU MIGHT LOSE
MONEY. BUT IF YOU CAN RIDE OUT
THE MARKET'S UPS AND DOWNS,
YOU MAY HAVE A GAIN.
(CHECKMARK)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
DIVIDEND RETURNS 4.92% 5.19% 5.29% 6.62% 5.28%
CAPITAL RETURNS 2.28% 1.69% 0.36% 12.79% -12.89%
TOTAL RETURNS 7.20% 6.88% 5.65% 19.41% -7.61%
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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, if
any, paid by the fund are reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.34(CENTS) 26.80(CENTS) 54.05(CENTS)
ANNUALIZED DIVIDEND RATE 4.58% 4.64% 4.71%
30-DAY ANNUALIZED YIELD 3.84% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.28% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect any tax reclassifications. If you annualize this
number, based on an average share price of $11.54 over the past one
month, $11.52 over the past six months and $11.48 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 bond 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% combined effective 1998
federal and state income tax bracket, but does not reflect the payment
of the alternative minimum tax, if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Prospects were bright for
fixed-income markets at the
beginning of the 12-month period
ending November 30, 1998, with
positive U.S. economic news and
the Federal Reserve Board's
reluctance to raise interest rates
playing key roles. However,
near-record issuance of municipal
bonds, greeted by only moderate
enthusiasm, continued to contribute
to their underperformance
relative to taxable bonds. For the
12-month period, the Lehman
Brothers Municipal Bond Index -
a popular measure of the
municipal bond market - returned
7.76%. By comparison, the
Lehman Brothers Aggregate Bond
Index - a widely followed
measure of taxable bond
performance - returned 9.45%
during the period. Year-to-date
municipal bond issuance of over
$253 billion has already exceeded
all of last year's total, and is on
track to top the record $293 billion
muni-bond issuance during 1993.
Despite the tepid demand, munis
were yielding at the end of the
period about the same as 30-year
Treasuries - the safe haven of
choice during the market's
downdraft in the late summer and
early fall. While the recent equity
rally has put further pressure on
municipal bond prices, their yields
are historically high, which may
stimulate demand in the near
term. Munis, like the majority of
fixed-income issues, also have
been bolstered by three recent
interest-rate cuts by the Federal
Reserve Board, which dropped the
fed funds rate to 4.75%.
An interview with George Fischer, Portfolio Manager of Spartan
Connecticut Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the 12-month period that ended November 30, 1998, the fund had
a total return of 7.20%. To get a sense of how the fund did relative
to its competitors, the Connecticut municipal debt funds average
returned 7.02% for the same one-year period, according to Lipper
Analytical Services. Additionally, the Lehman Brothers Connecticut 4
Plus Year Enhanced Municipal Bond Index - which tracks the types of
securities in which the fund invests - returned 7.80% for the same
12-month period.
Q. WHAT FACTORS HELPED THE FUND OUTPACE ITS PEERS?
A. The fund's relatively large stake in intermediate-term bonds with
maturities of between five and 15 years were good performers and
helped the fund beat the average Connecticut municipal debt fund over
the past 12 months. I emphasized intermediate-maturity bonds because I
felt they offered the best combination of reward - or income - for the
risk. With regard to maturity, longer-term bonds are considered to
have more risk because they generally are more sensitive to changes in
interest rates; they usually fall more in price when interest rates
rise, and vice versa. In my view, investors were paid an appropriate
amount of added income for each additional year of maturity up to
about 15 years. However, I didn't feel that the extra income for each
successive year offered by longer-term bonds was adequate given the
level of risk inherent in them. Throughout the past six months,
intermediate-maturity bond prices rose more in percentage terms than a
combination of longer- and shorter-term bonds.
Q. WERE THERE ANY DISAPPOINTMENTS OVER THE PAST 12 MONTHS?
A. The main disappointment came late in the period when investors
became worried that a slowing global economy would hurt lower-quality
bonds of all stripes. In the case of the municipal-bond market, the
laggards were Baa-rated securities, which made up 9.3% of the fund's
investments at the end of the period. Although Baa-rated securities
are still considered investment-grade, investors began to avoid them
in favor of higher-quality municipals. After leading their
higher-quality counterparts during the past winter, spring and summer,
Baa-rated securities performed poorly this past fall in response to
the flight to quality that bolstered the Treasury market.
Q. HAVE YOU CHANGED THE WAY THE FUND'S INVESTMENTS ARE SPREAD AMONG
VARIOUS SECTORS OF THE MUNICIPAL MARKET?
A. Yes, I have. One of the more noticeable changes is the fund's
shrinking stake in industrial development bonds, which are issued
through a municipality to finance a fixed asset for a purpose deemed
in the public interest, such as a road to a new corporate facility or
the expansion of an airline terminal. The performance of industrial
development bonds depends on a corporation's ability to pay the bond's
interest and principal - which ultimately turns on the health of that
corporation. As I grew more concerned that corporate profitability
would slow in response to a weaker global economy, I cut the fund's
holdings in industrial development bonds.
Q. ROUGHLY HALF OF THE FUND'S INVESTMENTS WERE IN INSURED BONDS AT THE
END OF THE PERIOD. WHAT'S ATTRACTIVE ABOUT THESE BONDS?
A. First of all, I was able to buy them at fairly cheap prices -
relative to what I believed to be their intrinsic value - mainly
because they were in abundant supply. I also liked them because the
insurer guarantees the timely payment of a bond's principal and
interest. However, shareholders should remember that insured bonds,
like all bonds, rise and fall in value in response to interest-rate
moves, supply and demand and other factors.
Q. GEORGE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
A. Municipal bonds are priced relatively cheaply right now, which
could bode well for their prospects. Economic turmoil overseas,
combined with falling interest rates, significantly boosted U.S.
Treasury prices - considered a safe haven among global investors in
times of uncertainty. But because their appeal is mostly from domestic
investors, municipals didn't rally as much as Treasuries, even though
they, too, benefited from falling rates. That's why municipals were as
cheap relative to Treasuries as they have been in nearly a decade at
the end of the period. The yield on a Aaa-rated insured 30-year
municipal bond was about 100% of the yield of a comparable maturity
U.S. Treasury bond. Using history as a guide, we know that such
municipals typically yield about 85% of Treasuries. Since bond yields
and bond prices move in the opposite direction, municipals should gain
ground on their Treasury counterparts if their yield moves closer to
the historical 85% average.
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.
GEORGE FISCHER ON
CONNECTICUT'S ECONOMY:
"CONNECTICUT'S ECONOMY CONTINUED
TO POST SOLID GROWTH DURING THE
PAST YEAR AND THE STATE ENJOYED THE
HIGHEST PER CAPITA INCOME AND
MEDIAN FAMILY INCOME IN THE
UNITED STATES. EMPLOYMENT TRENDS
WERE PARTICULARLY STRONG, WITH NEW
JOBS CREATED PRIMARILY FROM THE
FINANCIAL SERVICES, REAL ESTATE,
CONSTRUCTION AND SERVICES SECTORS.
THE EXPANSION OF THE STATE'S TWO
NATIVE AMERICAN CASINOS HAS
FUELED CONSTRUCTION AND SERVICE
JOB GROWTH, WHILE THE FINANCIAL
SERVICES SECTOR HAS BENEFITED FROM
GROWTH IN THE INVESTMENT FIELD.
EVEN THE LAYOFF-PRONE INSURANCE
SECTOR POSTED POSITIVE, IF WEAK, JOB
GROWTH. THAT SAID, THE STATE IS NOT
WITHOUT CHALLENGES, INCLUDING A
POTENTIAL LABOR SHORTAGE, HIGH
LIVING EXPENSES AND HIGH CORPORATE
TAX RATES, AND ITS CONTINUED
DEPENDENCE ON THE SHRINKING
DEFENSE INDUSTRY. GIVEN THESE
STRENGTHS AND WEAKNESSES, I THINK
THE STATE WILL CONTINUE TO GROW,
ALBEIT AT A SLOWER PACE THAN IT DID
IN 1998 AND SLOWER THAN THE NATION
AS A WHOLE."
(SOLID BULLET) AT THE END OF THE PERIOD, 10.1% OF
THE FUND'S INVESTMENTS WERE IN BONDS
ISSUED BY PUERTO RICO AND GUAM. AS
TERRITORIES OF THE UNITED STATES, EACH
CAN ISSUE MUNICIPAL DEBT THAT IS FREE
FROM FEDERAL TAXES IN ALL 50 STATES
AND STATE INCOME-TAXES IN THOSE
STATES THAT LEVY THEM. BECAUSE THE
SUPPLY OF CONNECTICUT MUNICIPALS
WAS LIMITED, THE MANAGER BOUGHT
HIGHER-YIELDING PUERTO RICO AND
GUAM BONDS.
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 NOVEMBER 30,
1998, MORE THAN $373 MILLION
MANAGER: GEORGE FISCHER,
SINCE 1996; MANAGER, VARIOUS
FIDELITY AND SPARTAN MUNICIPAL
INCOME FUNDS; JOINED FIDELITY
IN 1989
(CHECKMARK)
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENT CHANGES
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TOP FIVE SECTORS AS OF NOVEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
GENERAL OBLIGATIONS 36.4 36.4
SPECIAL TAX 12.9 9.8
HEALTH CARE 11.2 11.5
ESCROWED/PRE-REFUNDED 10.2 10.8
EDUCATION 8.6 9.4
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AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 12.0 12.0
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 6.4 6.5
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 NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 65.59999999999999
ROW: 1, COL: 2, VALUE: 24.1
ROW: 1, COL: 3, VALUE: 9.300000000000001
ROW: 1, COL: 4, VALUE: 1.0
AAA 64.0%
AA, A 23.3%
BAA 10.9%
SHORT-TERM
INVESTMENTS 1.8%
AAA 66.5%
AA, A 24.1%
BAA 9.3%
SHORT-TERM
INVESTMENTS 0.1%
ROW: 1, COL: 1, VALUE: 64.0
ROW: 1, COL: 2, VALUE: 23.3
ROW: 1, COL: 3, VALUE: 10.9
ROW: 1, COL: 4, 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 CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
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MUNICIPAL BONDS - 99.9%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - 89.8%
Branford Gen. Oblig.:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 607,100
7% 6/15/09 (FGIC Insured) Aaa 500,000 615,145
Bridgeport Gen. Oblig.:
Rfdg. Series A:
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,892,831
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,468,560
6.5% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,691,116
Series A:
5.7% 9/1/15 (AMBAC Insured) Aaa 2,000,000 2,220,680
(Pre-Refunded to 9/1/05 @ 101) (c)
7.4% 3/1/00 (Pre-Refunded to Baa2 1,080,000 1,112,821
3/1/99 @ 102) (c)
7.625% 1/15/09 (Pre-Refunded to Baa2 1,500,000 1,549,035
3/1/99 @ 102) (c)
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 853,165
Connecticut Clean Wtr. Fund Rev.:
5.75% 3/1/07 Aaa 2,615,000 2,920,510
5.875% 11/1/03 Aaa 1,000,000 1,093,220
5.875% 5/1/04 Aaa 1,000,000 1,096,780
6% 10/1/12 Aaa 6,000,000 6,924,600
6.8% 7/1/05 Aaa 1,000,000 1,083,100
7% 1/1/11 Aaa 2,500,000 2,709,775
Connecticut Dev. Auth. Health Care Proj. Rfdg. A2 3,000,000 3,264,450
(Duncaster, Inc. Proj.) 6.75% 9/1/15
Connecticut Dev. Auth. Poll. Cont. Rev. (New A1 3,000,000 3,148,740
England Pwr. Co. Proj.) 7.25% 10/15/15
Connecticut Dev. Auth. Rev. Series A:
4.75% 11/15/13 A1 1,525,000 1,523,048
6% 11/15/07 A1 1,525,000 1,734,627
6% 11/15/08 A1 1,525,000 1,736,441
6% 11/15/09 A1 1,525,000 1,738,973
Connecticut Gen. Oblig.:
(Cap. Appreciation) (College Savings Plan-A) Aa3 4,000,000 2,752,160
0% 12/1/07
(College Savings Plan):
Series A, 0% 5/15/07 Aa3 2,250,000 1,583,415
Series B 0% 11/1/06 Aa3 2,800,000 2,029,104
Series B, 0% 11/1/09 Aa3 7,000,000 4,382,280
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Gen. Oblig.: - continued
Series A:
6% 3/15/01 Aa3 $ 2,405,000 $ 2,526,501
6% 3/1/06 Aa3 2,700,000 3,033,153
6.1% 3/15/02 Aa3 3,000,000 3,221,460
7% 3/15/03 Aa3 3,000,000 3,378,540
Series B, 6% 10/1/05 Aa3 6,430,000 7,228,220
Connecticut Health & Edl. Facilities Auth. Rev.:
(Bristol Hosp.):
Series A 7% 7/1/09 (MBIA Insured) Aaa 1,750,000 1,867,320
Series A 7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,460,227
(Choate Rosemary Hall) Series B, 5% 7/1/27 Aaa 3,000,000 2,998,380
(MBIA Insured)
(Connecticut College) Series B, 6.625% Aaa 1,200,000 1,310,448
7/1/11 (MBIA Insured) (Pre-Refunded to
7/1/01 @ 102) (c)
(Greenwich Hosp.) Series A, 5.8% 7/1/26 Aaa 5,400,000 5,836,806
(MBIA Insured)
(Hosp. for Spl. Care Issue) Series B, 5.375% Baa2 2,700,000 2,727,999
7/1/17
(Kent School) Series B:
5.1% 7/1/07 (MBIA Insured) Aaa 265,000 282,464
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 325,713
5.375% 7/1/09 (MBIA Insured) Aaa 345,000 369,857
5.4% 7/1/10 (MBIA Insured) Aaa 685,000 734,512
(Loomis Chaffee School) Series C, 5.5% Aaa 1,430,000 1,499,241
7/1/26 (MBIA Insured)
(Lutheran Gen. Health Care Sys.) 7.375% Aaa 3,195,000 4,036,946
7/1/19 (Escrowed to Maturity) (c)
(Masonicare Proj.) Series A, 5% 7/1/20 Aaa 2,400,000 2,409,072
(AMBAC Insured)
(New Britain Memorial Hosp.) Series A, 7.75% AAA 6,500,000 7,488,325
7/1/22 (Pre-Refunded to 7/1/02 @ 102) (c)
(Quinnipiac College) Series C, 7.75% 7/1/20 BBB- 1,940,000 2,103,717
(Pre-Refunded to 7/1/00 @ 102) (c)
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22, LOC Fleet Nat'l. Baa3 1,000,000 1,120,360
Bank, Providence (Pre-Refunded to
7/1/02 @ 102) (c)
Series B, 5.5% 7/1/09 Baa3 1,500,000 1,528,710
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facilities Auth. Rev.: -
continued
(Sharon Healthcare, Inc.) Series A:
8.75% 7/1/06 (Pre-Refunded to AAA $ 450,000 $ 518,859
7/1/01 @ 103) (c)
9% 7/1/13 (Pre-Refunded to AAA 1,300,000 1,505,101
7/1/01 @ 103) (c)
9.2% 7/1/21 (Pre-Refunded to AAA 1,500,000 1,743,960
7/1/01 @ 103) (c)
(Veterans Memorial Med. Ctr.) Series A:
5.5% 7/1/26 (MBIA Insured) Aaa 2,275,000 2,389,615
6.25% 7/1/05 (MBIA Insured) Aaa 2,265,000 2,552,882
(Yale Univ.) 5.929% 6/10/30 Aaa 10,000,000 10,687,400
Rfdg.:
(Hosp. For Spl. Care Issue) Series B, Baa2 2,500,000 2,530,775
5.5% 7/1/27
(Quinnipiac College) Series D:
6% 7/1/13 BBB- 3,500,000 3,604,545
6% 7/1/23 BBB- 1,975,000 2,024,118
(Sacred Heart Univ.) Series C:
6% 7/1/06 Baa3 250,000 266,420
6.5% 7/1/16 Baa3 4,000,000 4,350,240
(Saint Raphael Hosp.) Series H:
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,674,560
6.5% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,308,951
6.5% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,750,250
(Yale Univ.) Series H, 6% 7/1/03 (MBIA Aaa 1,000,000 1,088,600
Insured)
Connecticut Higher Ed. Supplemental Ln. Auth. Rev.:
(Family Ed. Ln. Prog.) Series A, 7.2% A 780,000 825,412
11/15/10 (b)
Series A:
7.375% 11/15/05 (b) A1 460,000 475,700
7.5% 11/15/10 (b) A1 1,570,000 1,624,448
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin.
Prog.):
Series A, 6.45% 5/15/22 (b) Aa2 4,765,000 4,842,431
Series B, 6.2% 5/15/12 Aa2 2,500,000 2,643,925
Series E, 6.2% 5/15/14 Aa2 1,000,000 1,071,870
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Muni. Elec. Energy Coop. Pwr.
Supply Sys. Rev. Rfdg.:
Series A:
6% 1/1/05 (MBIA Insured) Aaa $ 3,380,000 $ 3,744,871
6% 1/1/06 (MBIA Insured) Aaa 2,000,000 2,240,560
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,493,337
Connecticut Resource Recovery Auth. Rev. Rfdg.: Baa1 4,500,000 4,649,400
(American Fuel Co.) 8.1% 11/15/15 (b)
(Fuel Co.) Series A, 5.5% 11/15/09 (MBIA Aaa 2,000,000 2,182,760
Insured) (b)
(Mid-Connecticut Sys.) Series A:
5.25% 11/15/08 (MBIA Insured) Aaa 4,000,000 4,309,960
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 1,077,440
5.5% 11/15/11 (MBIA Insured) Aaa 2,500,000 2,707,950
Connecticut Spl. Tax Oblig. Rev.:
(Trans. Infrastructure):
Series A:
5.5% 11/1/06 (FSA Insured) Aaa 1,925,000 2,115,325
6.5% 6/1/03 (Escrowed to Maturity) (c) Aaa 2,800,000 3,109,652
6.75% 6/1/11 (Pre-Refunded to AAA 2,395,000 2,684,388
6/1/03 @ 100) (c)
7.125% 6/1/10 A1 3,550,000 4,367,530
Series B:
5.25% 11/1/14 (FSA Insured) Aaa 6,300,000 6,644,673
6.125% 9/1/12 A1 5,000,000 5,774,850
6.15% 9/1/09 A1 1,500,000 1,727,790
6.5% 10/1/07 A1 2,250,000 2,638,148
6.5% 10/1/10 A1 3,250,000 3,849,950
6.5% 10/1/12 A1 7,100,000 8,516,237
(Trans. Infrastructure)(Cap. Appreciation) A1 3,500,000 2,308,775
Series B, 0% 6/1/08
Rfdg. (Trans. Infrastructure) Series A, A1 2,500,000 2,660,850
5.125% 9/1/05
Eastern Connecticut Resource Recovery Auth. BBB+ 1,000,000 1,017,550
Solid Waste Rev. (Wheelabrator Lisbon Proj.)
Series A, 5% 1/1/04 (b)
Hartford Gen. Oblig.:
5% 11/15/10 (FGIC Insured) (b) Aaa 1,385,000 1,462,463
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Hartford Gen. Oblig.: - continued
5% 11/15/13 (FGIC Insured) (b) Aaa $ 1,425,000 $ 1,472,695
Meriden Gen. Oblig.:
6.25% 8/1/05 (FGIC Insured) Aaa 2,000,000 2,260,740
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,287,540
7% 10/1/07 (MBIA Insured) Aaa 500,000 604,590
Naugatuck Gen. Oblig.:
6.9% 6/15/07 (FGIC Insured) Aaa 485,000 582,112
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 250,860
7.4% 9/1/07 (MBIA Insured) Aaa 370,000 457,549
7.4% 9/1/08 (MBIA Insured) Aaa 370,000 462,378
New Britain Gen. Oblig.:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 462,464
Series B, 6% 3/1/12 (MBIA Insured) Aaa 2,000,000 2,313,780
5% 2/1/12 (MBIA Insured) Aaa 885,000 935,560
5% 2/1/13 (MBIA Insured) Aaa 885,000 930,763
6% 4/15/06 (AMBAC Insured) Aaa 1,615,000 1,813,936
6% 4/15/07 (AMBAC Insured) Aaa 1,615,000 1,830,812
7% 4/1/07 (MBIA Insured) Aaa 580,000 695,524
7% 4/1/08 (MBIA Insured) Aaa 580,000 702,003
New Haven Gen. Oblig.:
Rfdg. Series A:
5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,866,981
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,805,117
Series A, 7.4% 3/1/12 (Pre-Refunded to Baa1 1,000,000 1,131,470
3/1/02 @ 102) (c)
6% 2/15/05 (FGIC Insured) Aaa 1,650,000 1,829,355
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,119,760
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,311,897
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,450,225
8.25% 8/15/01 Baa1 1,900,000 2,003,379
Newtown Gen. Oblig.:
6% 6/15/05 (MBIA Insured) Aaa 1,700,000 1,893,698
6% 6/15/06 (MBIA Insured) Aaa 1,700,000 1,913,588
North Thompsonville Fire District #10:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 214,270
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 227,873
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 241,352
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 262,330
6.75% 6/1/11 (MBIA Insured) Aaa 230,000 280,244
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
South Central Connecticut Reg'l. Wtr. Auth. Wtr.
Sys. Rev. Series 11:
5.625% 8/1/05 (FGIC Insured) Aaa $ 5,000,000 $ 5,427,900
5.75% 8/1/12 (FGIC Insured) Aaa 5,000,000 5,425,250
Stamford Gen. Oblig.:
Rfdg.:
5.25% 7/15/10 Aaa 5,000,000 5,409,500
5.25% 7/15/12 Aaa 1,580,000 1,683,601
6.25% 2/15/03 Aaa 1,725,000 1,889,582
6.25% 2/15/04 Aaa 1,725,000 1,917,010
6.25% 2/15/05 Aaa 535,000 603,255
6.25% 2/15/05 (Escrowed to Maturity) (c) Aaa 1,190,000 1,342,618
6.6% 1/15/07 Aaa 295,000 347,551
6.6% 1/15/08 Aaa 1,480,000 1,758,403
6.6% 1/15/09 Aaa 1,000,000 1,195,760
Stratford Gen. Oblig. 7% 6/15/08 (FGIC Aaa 500,000 607,100
Insured)
Univ. of Connecticut Series A, 5.5% 2/1/06 Aaa 3,070,000 3,348,265
(FGIC Insured)
West Hartford Gen. Oblig.:
5% 7/15/11 Aaa 2,000,000 2,097,320
6.5% 7/15/05 Aaa 2,000,000 2,299,340
6.5% 7/15/06 Aaa 2,000,000 2,331,480
West Haven Gen. Oblig. 6.7% 2/15/04 Aaa 710,000 801,810
(MBIA Insured)
Wolcott Gen. Oblig.:
7% 6/15/09 (FGIC Insured) Aaa 445,000 547,479
7% 6/15/10 (FGIC Insured) Aaa 440,000 545,213
Woodstock Spl. Oblig. Rev. (Woodstock Aaa 725,000 775,301
Academy) 7% 3/1/08 (AMBAC Insured)
326,952,751
GUAM - 0.7%
Guam Govt. Ltd. Oblig. Rev. Rfdg. (Infrastructure Aaa 2,400,000 2,604,720
Impt.) Series A, 5.25% 11/1/09
(AMBAC Insured)
PUERTO RICO - 9.4%
Puerto Rico Commonwealth Pub. Impt. 6.6% Aaa 3,500,000 3,889,375
7/1/13 (MBIA Insured) (Pre-Refunded to
7/1/02 @ 101.5) (c)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Hwy. & Trans. Auth. Baa1 $ 1,750,000 $ 1,915,218
Hwy. Rev. Rfdg. Series V, 6.625% 7/1/12
Puerto Rico Commonwealth Infrastructure Fing.
Auth. Spl. Tax Rev.:
Rfdg. Series A, 5.25% 7/1/10 (AMBAC Aaa 11,065,000 12,015,255
Insured)
Series A, 5% 7/1/28 (AMBAC Insured) Aaa 6,500,000 6,530,095
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.:
Rfdg. Series Y, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,429,460
Series AA, 5.375% 7/1/14 (MBIA Insured) Aaa 3,500,000 3,699,605
Series W, 7% 7/1/07 (MBIA Insured) Aaa 2,000,000 2,429,460
Puerto Rico Ind. Med. & Envir. Poll. Cont. Aa3 1,285,000 1,407,435
Facilities Fing. Auth. Rev. (Motorola, Inc. Proj.)
Series A, 6.75% 1/1/14
34,315,903
TOTAL MUNICIPAL BONDS 363,873,374
(Cost $337,598,815)
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MUNICIPAL NOTES - 0.1%
CONNECTICUT - 0.1%
Area Coop. Edl. Svcs. Reg'l. Spl. Ed. Facilities Rev. BAN 500,000 501,050
4.5% 2/16/99 (Cost $500,513)
TOTAL INVESTMENT IN SECURITIES - 100% $ 364,374,424
(Cost $338,099,328)
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SECURITY TYPE ABBREVIATION
BAN - Bond Anticipation Note
LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(b) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Security collateralized by an amount sufficient to pay interest
and principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 86.8% AAA, AA, A 90.2%
Baa 6.8% BBB 6.9%
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 investments in securities, is as follows:
General Obligations 36.4%
Special Tax 12.9
Health Care 11.2
Escrowed/Pre-Refunded 10.2
Education 8.6
Water & Sewer 7.3
Electric Utilities 5.8
Others (individually less than 5%) 7.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $338,099,328. Net unrealized appreciation
aggregated $26,275,096, of which $26,282,496 related to appreciated
investment securities and $7,400 related to depreciated investment
securities.
The fund hereby designates approximately $2,466,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
At November 30, 1998 the fund was required to defer approximately
$1,615,000 of losses on futures contracts.
During the fiscal year ended November 30, 1998, 100% of the fund's
income dividends was free from federal income tax, and 5.6% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
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STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at value (cost $338,099,328) - $ 364,374,424
See accompanying schedule
Cash 4,057,228
Receivable for fund shares sold 240,740
Interest receivable 5,749,666
Redemption fees receivable 406
TOTAL ASSETS 374,422,464
LIABILITIES
Payable for fund shares redeemed $ 460,294
Distributions payable 357,163
Accrued management fee 167,640
Other payables and accrued expenses 4,356
TOTAL LIABILITIES 989,453
NET ASSETS $ 373,433,011
Net Assets consist of:
Paid in capital $ 347,065,790
Accumulated undistributed net realized gain (loss) on 92,125
investments
Net unrealized appreciation (depreciation) on investments 26,275,096
NET ASSETS, for 32,252,211 shares outstanding $ 373,433,011
NET ASSET VALUE, offering price and redemption price per $11.58
share ($373,433,011 (divided by) 32,252,211 shares)
</TABLE>
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STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 18,709,916
EXPENSES
Management fee $ 1,957,880
Non-interested trustees' compensation 226
Interest 4,028
Total expenses before reductions 1,962,134
Expense reductions (32,418) 1,929,716
NET INTEREST INCOME 16,780,200
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,141,928
Futures contracts 910,675 2,052,603
Change in net unrealized appreciation (depreciation) on:
Investment securities 5,955,424
Futures contracts (235,976) 5,719,448
NET GAIN (LOSS) 7,772,051
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 24,552,251
FROM OPERATIONS
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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 16,780,200 $ 16,545,675
Net interest income
Net realized gain (loss) 2,052,603 3,116,746
Change in net unrealized appreciation (depreciation) 5,719,448 2,468,912
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 24,552,251 22,131,333
FROM OPERATIONS
Distributions to shareholders (16,780,200) (16,545,675)
From net interest income
From net realized gain (2,984,295) (296,996)
TOTAL DISTRIBUTIONS (19,764,495) (16,842,671)
Share transactions 61,455,356 36,769,472
Net proceeds from sales of shares
Reinvestment of distributions 15,240,662 13,074,818
Cost of shares redeemed (49,698,375) (48,132,709)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 26,997,643 1,711,581
FROM SHARE TRANSACTIONS
Redemption fees 14,784 12,580
TOTAL INCREASE (DECREASE) IN NET ASSETS 31,800,183 7,012,823
NET ASSETS
Beginning of period 341,632,828 334,620,005
End of period $ 373,433,011 $ 341,632,828
OTHER INFORMATION
Shares
Sold 5,348,277 3,288,068
Issued in reinvestment of distributions 1,327,375 1,166,635
Redeemed (4,331,105) (4,311,130)
Net increase (decrease) 2,344,547 143,573
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 11.420 $ 11.240 $ 11.200 $ 9.960 $ 11.840
of period
Income from Investment .541 .559 .569 .617 .640
Operations
Net interest income
Net realized and unrealized .260 .190 .039 1.270 (1.472)
gain (loss)
Total from investment .801 .749 .608 1.887 (.832)
operations
Less Distributions
From net interest income (.541) (.559) (.569) (.617) (.640)
From net realized gain (.100) (.010) - (.020) (.410)
In excess of net realized gain - - - (.010) -
Total distributions (.641) (.569) (.569) (.647) (1.050)
Redemption fees added to paid .000 .000 .001 .000 .002
in capital
Net asset value, end of period $ 11.580 $ 11.420 $ 11.240 $ 11.200 $ 9.960
TOTAL RETURN A 7.20% 6.88% 5.65% 19.41% (7.61)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 373,433 $ 341,633 $ 334,620 $ 358,849 $ 315,582
(000 omitted)
Ratio of expenses to average .55% .55% .55% .55% .55%
net assets
Ratio of expenses to average net .54% B .55% .52% B .55% .55%
assets after expense reductions
Ratio of net interest income to 4.71% 4.98% 5.15% 5.73% 5.83%
average net assets
Portfolio turnover rate 8% 12% 30% 39% 11%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
value of an investment, assuming reinvestment of the fund's dividend
income but does not include 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 life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CT MUNICIPAL MONEY MARKET 3.05% 15.85% 25.69%
Connecticut Tax-Free 2.78% 14.62% n/a
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on March 4, 1991. For example, if you 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
tax-free money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past one year average represents a peer group
of 10 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN CT MUNICIPAL MONEY MARKET 3.05% 2.99% 2.99%
Connecticut Tax-Free 2.78% 2.79% n/a
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
11/30/98 8/31/98 6/1/98 3/2/98 12/1/97
Spartan Connecticut 2.74% 2.86% 3.30% 2.96% 3.25%
Municipal Money
Market Fund
Connecticut Tax-Free 2.44% 2.62% 2.97% 2.67% 3.04%
Money Market Funds Average
Spartan Connecticut 4.44% 4.67% 5.39% 4.83% 5.32%
Municipal Money
Market Fund -
Tax-equivalent
Portion of fund's income 20.47% 5.94% 4.13% 4.54% 0.00%
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 1998 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 Federal 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 Scott Orr, Portfolio Manager of Spartan Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the fund's fiscal
year, November 30, 1998. During this time, the Federal Reserve Board
lowered the rate banks charge each other for overnight loans - known
as the fed funds rate - three times. Each move consisted of an
"easing" of 0.25 percentage points; the fed funds rate fell from 5.50%
to 4.75%. These significant moves were unanticipated early in the
summer given the investment climate of the first eight months of the
reporting period. During that span, market sentiment reflected an
expectation of a fed "tightening," or raising of short-term interest
rates to slow the economy and guard against inflation. Although
inflation had been generally non-existent, signs such as a very low
unemployment rate and sustained economic growth pointed to the
potential for the build-up of inflationary pressures. International
problems, especially in Asia, helped dampen economic growth enough to
keep the Fed on the sidelines - leaving interest rates unchanged -
through the second quarter of 1998. However, the problems in global
markets intensified starting in August.
Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?
A. Russia defaulted on some of its outstanding debt and the value of
its currency, the ruble, plummeted, sparking concerns that currency
devaluations would take place in other emerging market countries, such
as those in Latin America. Global stock markets went into a free fall,
and investors worldwide flocked to U.S. Treasuries in pursuit of a
haven safe enough to withstand this turmoil. Further problems arose in
early fall when rumors of the potential collapse of certain hedge
funds hit the market. Market sentiment quickly swung to an
anticipation of Fed rate cuts. The Fed followed through with 0.25
percentage point decreases at the end of September, in a surprise move
on October 15 between meetings of its Open Market Committee, and again
on November 17. These moves were an attempt to bring stability back to
world markets, and appear to have succeeded.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?
A. Given the uncertainty of the markets, I maintained a relatively
neutral stance with the fund's average maturity, recognizing that the
interest-rate picture was changing in the late summer and early fall.
Without positioning the fund aggressively or defensively, I looked for
selected, attractive opportunities in longer-term securities
throughout the period. In addition, I turned some of my focus - within
the limits set by the fund's prospectus - to out-of-state investment
opportunities that offered more appealing after-tax yields than
tax-free alternatives in the Connecticut market. Even though more of
shareholders' income from the fund will be taxable at the state level
this year because of the out-of-state investments, this strategy
helped the fund provide higher yields on a tax-adjusted basis than if
I had invested the same assets in lower-yielding tax-exempt
Connecticut securities instead.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 2.74%,
compared to 3.26% 12 months ago. The more recent seven-day yield was
the equivalent of a 4.44% taxable rate of return for Connecticut
investors in the 38.88% combined state and federal income tax bracket.
Through November 30, 1998, the fund's 12-month total return was 3.05%,
compared to 2.78% for the Connecticut tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The market reflects uncertainty over the direction of the Fed's
interest-rate policy. After three rate cuts, it appears that the Fed
wants to wait and see what effect its moves will have on the economy.
Typically, there is at least a six-month lag before the Fed's moves
start to influence the economy. Inflation remains tame, but
unemployment is low - often a harbinger of inflation as increased
labor costs are passed on to the consumer - and the economy has shown
signs of continued growth. While the Fed has gone a long way toward
addressing its concerns about the global markets, it appears poised to
lower rates further if some U.S. economic weakness develops or if
global turmoil resurfaces. However, it would be a surprise to most
market observers if the Fed did so before its Open Market Committee
meeting in February 1999.
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
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 November 30,
1998, more than $190 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan money
market funds: joined Fidelity
in 1989
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 74 61 58
31 - 90 11 16 12
91 - 180 3 14 11
181 - 397 12 9 19
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Spartan Connecticut Municipal Money 45 DAYS 52 Days 67 Days
Market Fund
Connecticut Tax-Free Money 53 DAYS 43 days 58 days
Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 44.0
ROW: 1, COL: 2, VALUE: 17.0
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 11.0
ROW: 1, COL: 5, VALUE: 21.0
ROW: 1, COL: 6, VALUE: 0.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 54%
COMMERCIAL PAPER
(INCLUDING CP MODE) 13%
TENDER BONDS 9%
MUNICIPAL NOTES 15%
OTHER 9%
VARIABLE RATE DEMAND
NOTES (VRDNS) 44%
COMMERCIAL PAPER
(INCLUDING CP MODE) 17%
TENDER BONDS 7%
MUNICIPAL NOTES 11%
OTHER 21%
ROW: 1, COL: 1, VALUE: 54.0
ROW: 1, COL: 2, VALUE: 13.0
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 15.0
ROW: 1, COL: 5, VALUE: 9.0
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET
INVESTMENTS NOVEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 70.0%
Clipper Tax-Exempt Trust Ctfs. of Prtn. Participating VRDN $ 3,804,395 $ 3,804,395
Series 94 1 Class A, 3.13% (Liquidity Facility State Street
Bank & Trust Co.) (a)(e)
Connecticut Area Coop. Edl. Svcs. Reg'l. Spl. Ed. Facility Rev. 1,500,000 1,501,519
BAN 4.5% 2/16/99
Connecticut Dev. Auth. Arpt. Facility Rev.
(Bradley Arpt. Hotel Proj.):
Series 1997 A, 3.1%, LOC Kredietbank NV, VRDN (a) 1,200,000 1,200,000
Series 1997 B, 3.1%, LOC Royal Bank of Canada, VRDN (a) 1,000,000 1,000,000
Series 1997 C, 3.1%, LOC Fleet Nat'l. Bank, VRDN (a) 470,000 470,000
Connecticut Dev. Auth. Ind. Dev. Rev.:
(Rojo Enterprises LLC) 3.2%, LOC Fleet Bank NA, VRDN (a) 1,000,000 1,000,000
(W.E. Bassett Co. Proj.) Series 1986, 3.6%, LOC BankBoston 900,000 900,000
NA, VRDN (a)(d)
Connecticut Dev. Auth. Poll. Cont. Rev.:
(Connecticut Lt. & Pwr. Co. Proj.) Series 1996 A, 2.9% 6,400,000 6,400,000
(AMBAC Insured) (BPA Societe Generale), VRDN (a)(d)
(United Illuminating Co. Proj.) Series 1996, 3.1%, LOC 1,300,000 1,300,000
United Bank of Switzerland AG, VRDN (a)
Connecticut Gen. Oblig. Participating VRDN Series PA 347, 1,495,000 1,495,000
3.1% (Liquidity Facility Merrill Lynch & Co.) (a)(e)
Connecticut Health & Edl. Facilities Auth. Rev.:
(Yale Univ.) Series T, 2.9%, VRDN (a) 7,100,000 7,100,000
Bonds (Yale Univ.):
Series S 1:
2.95% 3/10/99, CP mode 1,000,000 1,000,000
3.3% 2/17/99, CP mode 3,000,000 3,000,000
3.35% 2/17/99, CP mode 2,000,000 2,000,000
Series S 2, 2.95% 2/16/99, CP mode 2,265,000 2,265,000
Connecticut Hsg. Fin. Auth.:
Bonds (Hsg. Mtg. Fin. Prog.):
Series 1989 D, 3.35% 2/24/99, CP mode (d) 2,475,000 2,475,000
Series 1990 C, 3.35% 2/24/99, CP mode (d) 1,375,000 1,375,000
Participating VRDN:
Series 1997 L, 3.35% (Liquidity Facility First Union Nat'l. 1,800,000 1,800,000
Bank of North Carolina) (a)(d)(e)
Series PT 1003, 3.17% (Liquidity Facility Merrill 6,900,000 6,900,000
Lynch & Co.) (a)(d)(e)
Series PT 148, 3.1% (Liquidity Facility Merrill 1,000,000 1,000,000
Lynch & Co.) (a)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth.: - continued
Participating VRDN:
Series PT 81, 3.17% (Liquidity Facility Rabobank $ 1,440,000 $ 1,440,000
Nederland Coop. Central) (a)(d)(e)
Series FR/RI A4, 3.25% (Liquidity Facility Bayerische 1,475,000 1,475,000
Hypo-und Vereinsbank AG) (a)(e)
Connecticut Muni. Elec. Energy Coop. Pwr. Supply Sys. Rev.
Bonds Series 1995 A:
3% 12/7/98, LOC Fleet Nat'l. Bank, CP mode 2,300,000 2,300,000
3.3% 12/7/98, LOC Fleet Nat'l. Bank, CP mode 4,000,000 4,000,000
Connecticut Spl. Assessment Second Injury Fund:
3.05% 12/8/98, LOC Cr. Communale de Belgique, 7,000,000 7,000,000
LOC Cr. Agricole Indosuez, CP
3.1% 12/1/98, LOC Cr. Communale de Belgique, 2,000,000 2,000,000
LOC Cr. Agricole Indosuez, CP
3.15% 2/8/99, LOC Cr. Communale de Belgique, 1,300,000 1,300,000
LOC Cr. Agricole Indosuez, CP
3.25% 1/11/99, LOC Cr. Communale de Belgique, 3,000,000 3,000,000
LOC Cr. Agricole Indosuez, CP
Connecticut Spl. Assessment Unemployment Compensation 12,600,000 12,600,000
Rev. Bonds Series 1993 C, 3.6%, tender 7/1/99 (FGIC
Insured), LOC FGIC-SPI
Connecticut Spl. Tax Oblig. Rev.:
(Trans. Infrastructure Purp.) Series 1, 3.1%, LOC 14,280,000 14,280,000
Commerzbank AG, VRDN (a)
Bonds:
Series 1995 C, 4.25% 10/1/99 (FGIC Insured) 1,100,000 1,109,650
Series 1998 B, 4% 11/1/99 1,200,000 1,208,659
Participating VRDN:
Series 52, 3.18% (Liquidity Facility Morgan Stanley, Dean 2,800,000 2,800,000
Witter & Co.) (a)(e)
Series ROC 22, 3.33% (Liquidity Facility Toronto Dominion 2,000,000 2,000,000
Bank) (a)(e)
Rfdg. Participating VRDN Series ROC 21, 3.33% (Liquidity 3,935,000 3,935,000
Facility Toronto Dominion Bank) (a)(e)
Coventry Gen. Oblig. BAN 4% 12/15/98 2,225,000 2,225,255
East Hartford Gen. Oblig. BAN 3.75% 1/21/99 3,600,000 3,601,260
Hartford Redev. Agcy. Multi-family Mtg. Rev. (Underwood 2,400,000 2,400,000
Towers Proj.) 3.05% (FSA Insured) (BPA Barclays Bank PLC),
VRDN (a)
Mansfield Gen. Oblig. BAN 4% 6/16/99 1,650,000 1,653,179
New Fairfield Gen. Oblig. BAN 3.25% 8/2/99 1,000,000 1,002,288
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Redding Gen. Oblig. BAN 3.25% 10/21/99 $ 2,000,000 $ 2,005,341
Reg'l. School Dist #14 Bethlehem & Woodbury BAN 4% 2,100,000 2,103,326
6/1/99
South Windsor Gen. Oblig. BAN 3.75% 3/23/99 3,000,000 3,002,751
Stamford Gen. Oblig. BAN 3.75% 5/17/99 2,000,000 2,002,219
Stamford Hsg. Auth. Rev. (Morgan Street Proj.) Series 1994, 2,500,000 2,500,000
2.95%, LOC Deutsche Bank AG, VRDN (a)(d)
Stratford Gen. Oblig. BAN 4% 6/16/99 1,200,000 1,202,371
132,132,213
PUERTO RICO - 9.9%
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. Rev. 1,610,000 1,610,000
Participating VRDN Series PA 125, 3.05% (Liquidity Facility
Merrill Lynch & Co.) (a)(e)
Puerto Rico Commonwealth Pub. Impt. Rev.:
Participating VRDN:
Series PA 97, 3.05% (Liquidity Facility Merrill 1,000,000 1,000,000
Lynch & Co.) (a)(e)
Series PT 1025, 3.05% (Liquidity Facility Merrill 1,000,000 1,000,000
Lynch & Co.) (a)(e)
Series PT 1051, 3.05% (Liquidity Facility Merrill 2,000,000 2,000,000
Lynch & Co.) (a)(e)
Rfdg. Participating VRDN Series PT 1039, 3.05% 4,070,000 4,070,000
(Liquidity Facility Merrill Lynch & Co.) (a)(e)
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Participating VRDN 8,995,000 8,995,000
Series PA 346, 3.05% (Liquidity Facility Merrill
Lynch & Co.) (a)(e)
18,675,000
SHARES
OTHER - 20.1%
Municipal Central Cash Fund (b)(c) 37,890,054 37,890,054
TOTAL INVESTMENT IN SECURITIES - 100% $ 188,697,267
Total Cost for Income Tax Purposes $ 188,697,266
</TABLE>
SECURITY TYPE ABBREVIATION
BAN - Bond Anticipation Note
CP - Commercial Paper
VRDN - Variable Rate Demand Note
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Information in this report regarding holdings by state and
security types does 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.
(c) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.31%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $12,000 of which $4,000, $4,000 and $4,000 will expire
on November 30, 2002, 2005 and 2006, respectively.
During the fiscal year ended November 30, 1998, 100% of the fund's
income dividends was free from federal income tax, and 17.7% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at value - $ 188,697,267
See accompanying schedule
Cash 42
Receivable for fund shares sold 463,009
Interest receivable 1,356,787
TOTAL ASSETS 190,517,105
LIABILITIES
Payable for fund shares redeemed $ 370,184
Distributions payable 28,344
Accrued management fee 78,252
Other payables and accrued expenses 902
TOTAL LIABILITIES 477,682
NET ASSETS $ 190,039,423
Net Assets consist of:
Paid in capital $ 190,051,287
Accumulated net realized gain (loss) on investments (11,864)
NET ASSETS, for 190,051,285 shares outstanding $ 190,039,423
NET ASSET VALUE, offering price and redemption price per $1.00
share ($190,039,423 (divided by) 190,051,285 shares)
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 6,153,476
EXPENSES
Management fee $ 880,996
Non-interested trustees' compensation 486
Total expenses before reductions 881,482
Expense reductions (18,027) 863,455
NET INTEREST INCOME 5,290,021
NET GAIN (LOSS) (3,592)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,286,429
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,290,021 $ 5,619,799
Net interest income
Net realized gain (loss) (3,592) (4,319)
Increase (decrease) in net unrealized gain from accretion - (353)
of discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,286,429 5,615,127
FROM OPERATIONS
Distributions to shareholders from net interest income (5,290,021) (5,619,799)
Share transactions at net asset value of $1.00 per share 195,188,717 156,608,247
Proceeds from sales of shares
Reinvestment of distributions from net interest income 5,053,873 5,491,051
Cost of shares redeemed (173,846,788) (185,421,716)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 26,395,802 (23,322,418)
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 26,392,210 (23,327,090)
NET ASSETS
Beginning of period 163,647,213 186,974,303
End of period $ 190,039,423 $ 163,647,213
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .030 .031 .030 .034 .023
Operations
Net interest income
Less Distributions
From net interest income (.030) (.031) (.030) (.034) (.023)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 3.05% 3.12% 3.08% 3.41% 2.28%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 190,039 $ 163,647 $ 186,974 $ 175,622 $ 167,056
(000 omitted)
Ratio of expenses to average .50% .50% .50% .50% .50%
net assets
Ratio of expenses to average .49% C .50% .50% .50% .50%
net assets after expense
reductions
Ratio of net interest income to 3.00% 3.08% 3.04% 3.36% 2.25%
average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
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 6 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a money market fund's historical
performance. You can look at either total return or yield. Total
return reflects the change in the value of an investment, assuming
reinvestment of the fund's dividend income. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had
not reimbursed certain fund expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
FIDELITY CT MUNICIPAL MONEY MARKET 2.94% 15.29% 35.56%
Connecticut Tax-Free 2.78% 14.62% n/a
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on August 29, 1989. For example, if you 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
tax-free money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past one year average represents a peer group
of 10 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
FIDELITY CT MUNICIPAL MONEY MARKET 2.94% 2.89% 3.34%
Connecticut Tax-Free 2.78% 2.79% n/a
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
11/30/98 8/31/98 6/1/98 3/2/98 12/1/97
Fidelity Connecticut 2.63% 2.77% 3.19% 2.72% 3.19%
Municipal Money
Market Fund
Connecticut Tax-Free 2.44% 2.62% 2.97% 2.67% 3.04%
Money Market Funds Average
Fidelity Connecticut 4.26% 4.53% 5.21% 4.45% 5.22%
Municipal Money
Market Fund -
Tax-equivalent
Portion of fund's income 21.49% 0.14% 3.16% 0.57% 0.66%
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 1998 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 Federal alternative minimum tax.
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)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Fidelity Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the fund's fiscal
year, November 30, 1998. During this time, the Federal Reserve Board
lowered the rate banks charge each other for overnight loans - known
as the fed funds rate - three times. Each move consisted of an
"easing" of 0.25 percentage points; the fed funds rate fell from 5.50%
to 4.75%. These significant moves were unanticipated early in the
summer given the investment climate of the first eight months of the
reporting period. During that span, market sentiment reflected an
expectation of a fed "tightening," or raising of short-term interest
rates to slow the economy and guard against inflation. Although
inflation had been generally non-existent, signs such as a very low
unemployment rate and sustained economic growth pointed to the
potential for the build-up of inflationary pressures. International
problems, especially in Asia, helped dampen economic growth enough to
keep the Fed on the sidelines - leaving interest rates unchanged -
through the second quarter of 1998. However, the problems in global
markets intensified starting in August.
Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?
A. Russia defaulted on some of its outstanding debt and the value of
its currency, the ruble, plummeted, sparking concerns that currency
devaluations would take place in other emerging market countries, such
as those in Latin America. Global stock markets went into a free fall,
and investors worldwide flocked to U.S. Treasuries in pursuit of a
haven safe enough to withstand this turmoil. Further problems arose in
early fall when rumors of the potential collapse of certain hedge
funds hit the market. Market sentiment quickly swung to an
anticipation of Fed rate cuts. The Fed followed through with 0.25
percentage point decreases at the end of September, in a surprise move
on October 15 between meetings of its Open Market Committee, and again
on November 17. These moves were an attempt to bring stability back to
world markets, and appear to have succeeded.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?
A. Given the uncertainty of the markets, I maintained a relatively
neutral stance with the fund's average maturity, recognizing that the
interest-rate picture was changing in the late summer and early fall.
Without positioning the fund aggressively or defensively, I looked for
selected, attractive opportunities in longer-term securities
throughout the period. In addition, I turned some of my focus - within
the limits set by the fund's prospectus - to out-of-state investment
opportunities that offered more appealing after-tax yields than
tax-free alternatives in the Connecticut market. Even though more of
shareholders' income from the fund will be taxable at the state level
this year because of the out-of-state investments, this strategy
helped the fund provide higher yields on a tax-adjusted basis than if
I had invested the same assets in lower-yielding tax-exempt
Connecticut securities instead.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 2.63%,
compared to 3.20% 12 months ago. The more recent seven-day yield was
the equivalent of a 4.26% taxable rate of return for Connecticut
investors in the 38.88% combined stated federal income tax bracket.
Through November 30, 1998, the fund's 12-month total return was 2.94%,
compared to 2.78% for the Connecticut tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The market reflects uncertainty over the direction of the Fed's
interest-rate policy. After three rate cuts, it appears that the Fed
wants to wait and see what effect its moves will have on the economy.
Typically, there is at least a six-month lag before the Fed's moves
start to influence the economy. Inflation remains tame, but
unemployment is low - often a harbinger of inflation as increased
labor costs are passed on to the consumer - and the economy has shown
signs of continued growth. While the Fed has gone a long way toward
addressing its concerns about the global markets, it appears poised to
lower rates further if some U.S. economic weakness develops or if
global turmoil resurfaces. However, it would be a surprise to most
market observers if the Fed did so before its Open Market Committee
meeting in February 1999.
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
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 November 30,
1998, more than $190 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan money
market funds: joined Fidelity
in 1989
(checkmark)
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 76 67 64
31 - 90 9 15 11
91 - 180 3 10 9
181 - 397 12 8 16
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Fidelity Connecticut Municipal 45 DAYS 44 Days 59 Days
Money Market Fund
Connecticut Tax-Free Money 53 DAYS 43 days 58 days
Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
ROW: 1, COL: 1, VALUE: 48.0
ROW: 1, COL: 2, VALUE: 12.0
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 11.0
ROW: 1, COL: 5, VALUE: 22.0
VARIABLE RATE DEMAND
NOTES (VRDNS) 64%
COMMERCIAL PAPER
(INCLUDING CP MODE) 10%
TENDER BONDS 7%
MUNICIPAL NOTES 13%
OTHER 6%
VARIABLE RATE DEMAND
NOTES (VRDNS) 48%
COMMERCIAL PAPER
(INCLUDING CP MODE) 12%
TENDER BONDS 7%
MUNICIPAL NOTES 11%
OTHER 22%
ROW: 1, COL: 1, VALUE: 64.0
ROW: 1, COL: 2, VALUE: 10.0
ROW: 1, COL: 3, VALUE: 7.0
ROW: 1, COL: 4, VALUE: 13.0
ROW: 1, COL: 5, VALUE: 6.0
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
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MUNICIPAL SECURITIES - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 69.8%
Clipper Tax-Exempt Trust Ctfs. of Prtn. Participating VRDN $ 7,889,018 $ 7,889,018
Series 94 1 Class A, 3.13% (Liquidity Facility State Street
Bank & Trust Co.) (a)(e)
Connecticut Area Coop. Edl. Svcs. Reg'l. Spl. Ed. Facility 4,125,000 4,129,177
Rev. BAN 4.5% 2/16/99
Connecticut Dev. Auth. Arpt. Facility Rev. (Bradley Arpt.
Hotel Proj.):
Series 1997 A, 3.1%, LOC Kredietbank NV, VRDN (a) 4,100,000 4,100,000
Series 1997 C, 3.1%, LOC Fleet Nat'l. Bank, VRDN (a) 930,000 930,000
Connecticut Dev. Auth. Ind. Dev. Rev.:
(Lindenmaier Precision Co. Ohaus Proj.) Series 1988, 8,000,000 8,000,000
3.25%, LOC Morgan Guaranty Trust Co., NY, VRDN (a)(d)
(Rojo Enterprises LLC) 3.2%, LOC Fleet Bank NA, VRDN (a) 1,850,000 1,850,000
(W.E. Bassett Co. Proj.) Series 1986, 3.6%, LOC BankBoston 900,000 900,000
NA, VRDN (a)(d)
Rfdg. (Cap. District Energy Ctr. Proj.) Series 1998, 3.1%, 6,600,000 6,600,000
LOC Fleet Nat'l. Bank, VRDN (a)(d)
Connecticut Dev. Auth. Poll. Cont. Rev.:
(Connecticut Lt. & Pwr. Co. Proj.) Series 1996 A, 2.9% 9,400,000 9,400,000
(AMBAC Insured) (BPA Societe Generale), VRDN (a)(d)
(United Illuminating Co. Proj.) Series 1996, 3.1%, LOC 2,800,000 2,800,000
United Bank of Switzerland AG, VRDN (a)
Connecticut Gen. Oblig.:
Bond Series D, 6% 12/1/98 2,440,000 2,440,000
Participating VRDN:
Series PA 338, 3.1% (Liquidity Facility Merrill 4,095,000 4,095,000
Lynch & Co.) (a)(e)
Series PA 347, 3.1% (Liquidity Facility Merrill 3,500,000 3,500,000
Lynch & Co.) (a)(e)
Series B, 2.85% (BPA Bayerische Landesbank 22,390,000 22,390,000
Girozentrale), VRDN (a)
Connecticut Health & Edl. Facilities Auth. Rev.:
(Pomfret School Issue) Series A, 3.05%, LOC Cr. Local 900,000 900,000
de France, VRDN (a)
(Yale Univ.) Series T, 2.9%, VRDN (a) 6,700,000 6,700,000
Bonds (Yale Univ.):
Series S 1:
3.3% 2/17/99, CP mode 1,000,000 1,000,000
3.3% 2/18/99, CP mode 3,900,000 3,900,000
3.35% 2/17/99, CP mode 5,000,000 5,000,000
Series S 2, 2.95% 2/16/99, CP mode 4,500,000 4,500,000
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MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth.:
Bonds (Hsg. Mtg. Fin. Prog.) Series 1989 D:
3.05% 3/9/99, CP mode (d) $ 500,000 $ 500,000
3.35% 2/18/99, CP mode (d) 2,795,000 2,795,000
3.35% 2/24/99, CP mode (d) 990,000 990,000
3.35% 2/24/99, CP mode (d) 6,700,000 6,700,000
Participating VRDN:
Series 1997 L, 3.35% (Liquidity Facility First Union Nat'l. 3,695,000 3,695,000
Bank of North Carolina) (a)(d)(e)
Series PT 1003, 3.17% (Liquidity Facility Merrill Lynch & 15,580,000 15,580,000
Co.) (a)(d)(e)
Series PT 148, 3.1% (Liquidity Facility Merrill Lynch & 1,500,000 1,500,000
Co.) (a)(e)
Series PT 81, 3.17% (Liquidity Facility Rabobank 2,540,000 2,540,000
Nederland Coop. Central) (a)(d)(e)
Series FR/RI A4, 3.25% (Liquidity Facility Bayerische 3,200,000 3,200,000
Hypo-und Vereinsbank AG) (a)(e)
Connecticut Muni. Elec. Energy Coop. Pwr. Supply Sys. Rev. Bonds 2,400,000 2,400,000
Series 1995 A, 3% 12/7/98, LOC Fleet Nat'l. Bank, CP mode
Connecticut Spl. Assessment Second Injury Fund:
3.05% 12/8/98, LOC Cr. Communale de Belgique, 20,000,000 20,000,000
LOC Cr. Agricole Indosuez, CP
3.1% 12/1/98, LOC Cr. Communale de Belgique, 5,500,000 5,500,000
LOC Cr. Agricole Indosuez, CP
3.15% 2/8/99, LOC Cr. Communale de Belgique, 3,200,000 3,200,000
LOC Cr. Agricole Indosuez, CP
Connecticut Spl. Assessment Unemployment Compensation 31,500,000 31,501,530
Rev. Bonds Series 1993 C, 3.6%, tender 7/1/99 (FGIC
Insured), LOC FGIC-SPI
Connecticut Spl. Tax Oblig. Rev.:
(Trans. Infrastructure Purp.) Series 1, 3.1%, LOC 38,410,000 38,410,001
Commerzbank AG, VRDN (a)
Bonds:
Series 1995 C, 4.25% 10/1/99 (FGIC Insured) 2,400,000 2,421,057
Series 1998 B, 4% 11/1/99 2,800,000 2,820,205
Series B, 5.25% 10/1/99 (FGIC Insured) 3,340,000 3,405,465
Participating VRDN:
Series 52, 3.18% (Liquidity Facility Morgan Stanley, Dean 7,200,000 7,200,000
Witter & Co.) (a)(e)
Series ROC 22, 3.33% (Liquidity Facility Toronto Dominion 6,435,000 6,435,000
Bank) (a)(e)
Rfdg. Participating VRDN Series ROC 21, 3.33% (Liquidity 8,000,000 8,000,000
Facility Toronto Dominion Bank) (a)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Coventry Gen. Oblig. BAN 4% 12/15/98 $ 5,200,000 $ 5,200,595
East Hartford Gen. Oblig. BAN 3.75% 1/21/99 9,800,000 9,803,429
Hartford Redev. Agcy. Multi-family Mtg. Rev. (Underwood 11,945,000 11,945,000
Towers Proj.) 3.05% (FSA Insured) (BPA Barclays Bank PLC),
VRDN (a)
Mansfield Gen. Oblig. BAN 4% 6/16/99 3,600,000 3,606,936
New Fairfield Gen. Oblig. BAN 3.25% 8/2/99 2,500,000 2,505,720
New Haven Facilities Rev. (Starter Sportswear) Series 1986, 2,200,000 2,200,000
3.6%, LOC Fleet Bank NA, VRDN (a)(d)
Redding Gen. Oblig. BAN 3.25% 10/21/99 5,000,000 5,013,352
Reg'l. School Dist #14 Bethlehem & Woodbury BAN 4% 4,900,000 4,907,760
6/1/99
South Windsor Gen. Oblig. BAN 3.75% 3/23/99 7,000,000 7,006,418
Stamford Gen. Oblig. BAN 3.75% 5/17/99 9,500,000 9,510,799
Stamford Hsg. Auth. Rev. (Morgan Street Proj.) Series 1994, 5,000,000 5,000,000
2.95%, LOC Deutsche Bank AG, VRDN (a)(d)
Stratford Gen. Oblig. BAN 4% 6/16/99 2,800,000 2,805,531
339,321,993
PENNSYLVANIA - 0.3%
Philadelphia Ind. Dev. Rev. (Institute for Cancer Research Fox 1,400,000 1,400,000
Chase Proj.) Series 1990 A, 3.25%, LOC Morgan Guaranty
Trust Co., NY, VRDN (a)
PUERTO RICO - 9.2%
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. Rev. 3,300,000 3,300,000
Participating VRDN Series PA 114, 3.05% (Liquidity Facility
Merrill Lynch & Co.) (a)(e)
Puerto Rico Commonwealth Hwy. & Trans. Auth. Rev. 2,900,000 2,900,000
Participating VRDN Series PA 331, 3.05% (Liquidity Facility
Merrill Lynch & Co.) (a)(e)
Puerto Rico Commonwealth Pub. Impt. Rev.:
Participating VRDN:
Series PA 97, 3.05% (Liquidity Facility Merrill 3,100,000 3,100,000
Lynch & Co.) (a)(e)
Series PT 1025, 3.05% (Liquidity Facility Merrill 12,000,000 12,000,000
Lynch & Co.) (a)(e)
Series PT 1051, 3.05% (Liquidity Facility Merrill 3,500,000 3,500,000
Lynch & Co.) (a)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Pub. Impt. Rev.: - continued
Rfdg. Participating VRDN Series PT 1039, 3.05% $ 3,200,000 $ 3,200,000
(Liquidity Facility Merrill Lynch & Co.) (a)(e)
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Participating VRDN:
Series PA 150, 3.05% (Liquidity Facility Merrill 3,700,000 3,700,000
Lynch & Co.) (a)(e)
Series PA 205, 3.05% (Liquidity Facility Merrill 10,995,000 10,995,000
Lynch & Co.) (a)(e)
Series PA 311, 3.05% (Liquidity Facility Merrill 1,895,000 1,895,000
Lynch & Co.) (a)(e)
44,590,000
TEXAS - 0.7%
Harris County Health Facilities Dev. Corp. Rev. (Saint Luke's 3,580,000 3,580,000
Hosp.) Series B, 3.25%, VRDN (a)
SHARES
OTHER - 20.0%
Municipal Central Cash Fund (b)(c) 97,284,461 97,284,461
TOTAL INVESTMENT IN SECURITIES - 100% $ 486,176,454
Total Cost for Income Tax Purposes $ 486,176,454
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SECURITY TYPE ABBREVIATION
BAN - Bond Anticipation Note
CP - Commercial Paper
VRDN - Variable Rate Demand Note
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Information in this report regarding holdings by state and
security types does 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.
(c) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.31%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $37,000 of which $8,000, $3,000, $7,000 and $19,000 will
expire on November 30, 2002, 2003, 2005 and 2006, respectively.
During the fiscal year ended November 30, 1998, 100% of the fund's
income dividends was free from federal income tax, and 21.4% of the
fund's income dividends was subject to the federal alternative minimum
tax (unaudited).
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
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STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - SEE ACCOMPANYING $ 486,176,454
SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 2,263
RECEIVABLE FOR FUND SHARES SOLD 4,449,889
INTEREST RECEIVABLE 3,560,993
TOTAL ASSETS 494,189,599
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 9,016
PAYABLE FOR FUND SHARES REDEEMED 5,874,488
DISTRIBUTIONS PAYABLE 58,590
ACCRUED MANAGEMENT FEE 155,592
OTHER PAYABLES AND ACCRUED EXPENSES 101,713
TOTAL LIABILITIES 6,199,399
NET ASSETS $ 487,990,200
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 488,026,972
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (36,772)
NET ASSETS, FOR 488,026,884 SHARES OUTSTANDING $ 487,990,200
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($487,990,200 (DIVIDED BY) 488,026,884 SHARES)
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STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 15,441,046
EXPENSES
MANAGEMENT FEE $ 1,717,478
TRANSFER AGENT FEES 601,534
ACCOUNTING FEES AND EXPENSES 87,008
NON-INTERESTED TRUSTEES' COMPENSATION 933
CUSTODIAN FEES AND EXPENSES 18,983
REGISTRATION FEES 38,208
AUDIT 31,540
LEGAL 9,400
REPORTS TO SHAREHOLDERS 8,834
MISCELLANEOUS 2,621
TOTAL EXPENSES BEFORE REDUCTIONS 2,516,539
EXPENSE REDUCTIONS (14,456) 2,502,083
NET INTEREST INCOME 12,938,963
NET GAIN (LOSS) (18,425)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,920,538
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STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 12,938,963 $ 11,154,435
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) (18,425) (7,370)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,920,538 11,147,065
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (12,938,963) (11,154,435)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 1,319,043,753 993,544,813
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 12,271,598 10,652,203
COST OF SHARES REDEEMED (1,230,483,349) (956,500,263)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 100,832,002 47,696,753
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 100,813,577 47,689,383
NET ASSETS
BEGINNING OF PERIOD 387,176,623 339,487,240
END OF PERIOD $ 487,990,200 $ 387,176,623
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FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
OF PERIOD
INCOME FROM INVESTMENT .029 .030 .029 .032 .022
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.029) (.030) (.029) (.032) (.022)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 2.94% 3.05% 2.98% 3.29% 2.19%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 487,990 $ 387,177 $ 339,487 $ 321,870 $ 300,885
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .56% .58% .59% .61% .60%
NET ASSETS
RATIO OF EXPENSES TO AVERAGE NET .56% .57% B .58% B .61% .60%
ASSETS AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 2.90% 3.00% 2.93% 3.24% 2.16%
AVERAGE NET ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
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 and Fidelity Connecticut Municipal Money Market Fund (the
money market funds) are funds 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 require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the income fund and the money
market funds:
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 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 FUNDS. 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 funds, accretion of 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
among 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 future transactions and losses deferred due to wash
sales and futures. 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 interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading 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 Fidelity
Investments Money Management, Inc., 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
earned by the funds are recorded as interest income in the
accompanying financial statements.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of
the underlying securities and the date when the securities will be
delivered and paid for are fixed at the time the transaction is
negotiated. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
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.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
RESTRICTED SECURITIES. 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. At the end of the period, the funds had no investments
in restricted securities.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $59,263,176 and $27,371,299, respectively.
The market value of futures contracts opened and closed during the
period amounted to $44,029,466 and $62,190,384, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the investment adviser for Fidelity Connecticut
Municipal Money Market Fund, FMR receives a monthly fee that is
calculated on the basis of a group fee rate plus a fixed individual
fund fee rate applied to the average net assets of the fund. The group
fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR.
The rates ranged from .1100% to .3700% for the period. The annual
individual fund fee rate is .25%. In the event that these rates were
lower than the contractual rates in effect during the period, FMR
voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. For the period, the management fee was
equivalent to an annual rate of .38% of average net assets for
Fidelity Connecticut Municipal Money Market Fund.
As the investment adviser for the income fund and Spartan Connecticut
Municipal Money Market Fund, 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 fund and Spartan
Connecticut Municipal Money Market Fund, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
FMR also bears the cost of providing shareholder services to Spartan
Connecticut Municipal Money Market Fund. To offset the cost of
providing these services, FMR or its affiliates collect certain
transaction fees from Spartan Connecticut Municipal Money Market
Fund's shareholders which amounted to $1,767 for the period.
SUB-ADVISER FEE. As each money market fund's investment sub-adviser,
Fidelity Investments Money Management, Inc., a wholly owned subsidiary
of FMR, receives a fee from FMR of 50% of the management fee payable
to FMR. The fees are paid prior to any voluntary expense
reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian and transfer and shareholder servicing agent for Fidelity
Connecticut Municipal Money Market 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, the transfer agent fees were equivalent to an annual
rate of .13% of average net assets for Fidelity Connecticut Municipal
Money Market Fund.
5. BANK BORROWINGS.
The income fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balances during the period for which loans were outstanding amounted
to $5,821,000 and $2,393,200, respectively. The weighted average
interest rate was 6.06%.
6. EXPENSE REDUCTIONS.
Fidelity Connecticut Municipal Money Market fund has entered into
arrangements with its custodian and transfer agent whereby credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's
custodian and transfer agent fees were reduced by $680 and $13,776,
respectively, under these arrangements.
6. EXPENSE REDUCTIONS - CONTINUED
FMR has entered into arrangements on behalf of the income fund and
Spartan Connecticut Municipal Money Market Fund with each fund's
custodian and transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of each fund's
expenses. During the period, the income fund's and Spartan Connecticut
Municipal Money Market Fund's expenses were reduced by $32,418 and
$18,027, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court
Street Trust II and the shareholders of Spartan Connecticut Municipal
Income Fund, Spartan Connecticut Municipal Money Market Fund and
Fidelity Connecticut Municipal Money Market Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Connecticut Municipal Income Fund (a fund of Fidelity Court
Street Trust), Spartan Connecticut Municipal Money Market Fund and
Fidelity Connecticut Municipal Money Market Fund (funds of Fidelity
Court Street Trust II) at November 30, 1998, and the results of their
operations, the changes in their net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the funds' management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at November 30, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 11, 1999
DISTRIBUTIONS
The Board of Trustees of Spartan Connecticut Municipal Income Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities.
PAY DATE 12/29/97 12/31/98
RECORD DATE 12/26/97 12/30/98
SHORT-TERM
CAPITAL GAINS $.02 $.01
LONG-TERM
CAPITAL GAINS $.08 $.04
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 33.43% -
20% rate 66.57% 100%
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 Xpress(registered trademark) provides 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.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
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
19200 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
48 West Putnam Avenue
Greenwich, CT
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
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
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
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 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
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
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
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
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
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 500
Merrimack, NH 03054-0500
(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 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUNDS
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President -
INCOME FUND
Boyce I. Greer, Vice President -
MONEY MARKET FUNDS
George A. Fischer, Vice President -
INCOME FUND
Scott A. Orr, Vice President -
MONEY MARKET FUNDS
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
CTR-ANN-0199 69045
1.539232.101
ADVISORY BOARD
J. Gary Burkhead
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 (registered trademark) 1-800-544-5555
AUTOMATED LINES FOR QUICKEST SERVICE
(FIDELITY_LOGO_GRAPHIC) (REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
AND
FIDELITY
NEW JERSEY MUNICIPAL
MONEY MARKET FUND
ANNUAL REPORT
NOVEMBER 30, 1998
(2_FIDELITY_LOGO_GRAPHICS) (REGISTERED TRADEMARK)
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVIEW
10 INVESTMENT CHANGES
11 INVESTMENTS
19 FINANCIAL STATEMENTS
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
23 PERFORMANCE
25 FUND TALK: THE MANAGER'S OVERVIEW
27 INVESTMENT CHANGES
28 INVESTMENTS
34 FINANCIAL STATEMENTS
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
38 PERFORMANCE
40 FUND TALK: THE MANAGER'S OVERVIEW
42 INVESTMENT CHANGES
43 INVESTMENTS
49 FINANCIAL STATEMENTS
NOTES 53 NOTES TO THE FINANCIAL STATEMENTS
REPORT OF INDEPENDENT 58 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 59
</TABLE>
Third party marks appearing herein are the property of their
respective owners. All other marks appearing herein are registered or
unregistered trademarks or service marks of FMR Corp. or an affiliated
company.
This report is printed on recycled paper using soy-based inks.
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:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
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. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-8888, or visit our
web site at www.fidelity.com. 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 NEW JERSEY 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 income, as reflected in the
fund's yield, to measure performance. If Fidelity had not reimbursed
certain fund expenses, the past 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN NJ MUNICIPAL INCOME 6.96% 32.20% 114.83%
LB NEW JERSEY MUNICIPAL BOND WITH 7.33% N/A N/A
PORT AUTHORITY OF NEW YORK AND NEW JERSEY
NEW JERSEY MUNICIPAL DEBT FUNDS AVERAGE 7.01% 31.49% 113.30%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the
Lehman Brothers New Jersey Municipal Bond Index with Port Authority of
New York and New Jersey - a market value-weighted index of New Jersey
investment-grade municipal bonds, including Port Authority of New York
and New Jersey bonds, with maturities of one year or more. To measure
how the fund's performance stacked up against its peers, you can
compare it to the New Jersey municipal debt funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 55 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 NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
SPARTAN NJ MUNICIPAL INCOME 6.96% 5.74% 7.95%
LB NEW JERSEY MUNICIPAL BOND WITH 7.33% N/A N/A
PORT AUTHORITY OF NEW YORK AND NEW JERSEY
NEW JERSEY MUNICIPAL DEBT FUNDS AVERAGE 7.01% 5.62% 7.87%
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 different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
Spartan NJ Muni Income LB Municipal Bond
00416 LB015
1988/11/30 10000.00 10000.00
1988/12/31 10180.25 10102.30
1989/01/31 10337.65 10311.22
1989/02/28 10218.69 10193.56
1989/03/31 10228.30 10169.20
1989/04/30 10529.56 10410.62
1989/05/31 10751.59 10626.85
1989/06/30 10923.48 10771.16
1989/07/31 11044.01 10917.76
1989/08/31 10908.14 10810.87
1989/09/30 10866.42 10778.65
1989/10/31 11017.95 10910.48
1989/11/30 11182.30 11101.41
1989/12/31 11233.76 11192.22
1990/01/31 11122.16 11139.28
1990/02/28 11235.41 11238.42
1990/03/31 11254.97 11241.79
1990/04/30 11108.66 11160.40
1990/05/31 11398.35 11404.03
1990/06/30 11513.52 11504.27
1990/07/31 11693.85 11673.39
1990/08/31 11468.29 11503.89
1990/09/30 11542.15 11510.45
1990/10/31 11705.55 11719.25
1990/11/30 11982.33 11954.92
1990/12/31 12036.11 12006.92
1991/01/31 12181.99 12168.06
1991/02/28 12259.59 12273.92
1991/03/31 12291.03 12278.34
1991/04/30 12461.90 12441.64
1991/05/31 12564.03 12552.25
1991/06/30 12561.80 12539.82
1991/07/31 12769.20 12692.55
1991/08/31 12920.51 12859.72
1991/09/30 13084.27 13027.15
1991/10/31 13223.89 13144.39
1991/11/30 13256.43 13181.07
1991/12/31 13520.22 13463.93
1992/01/31 13542.92 13494.63
1992/02/29 13550.32 13498.95
1992/03/31 13524.81 13503.94
1992/04/30 13633.72 13624.13
1992/05/31 13831.75 13784.48
1992/06/30 14052.39 14015.79
1992/07/31 14553.58 14435.98
1992/08/31 14350.36 14295.23
1992/09/30 14409.40 14388.72
1992/10/31 14114.06 14247.28
1992/11/30 14492.87 14502.45
1992/12/31 14697.51 14650.52
1993/01/31 14876.81 14820.90
1993/02/28 15457.11 15356.98
1993/03/31 15263.21 15194.65
1993/04/30 15440.64 15347.97
1993/05/31 15566.51 15434.22
1993/06/30 15850.93 15691.82
1993/07/31 15854.18 15712.38
1993/08/31 16224.83 16039.51
1993/09/30 16418.60 16222.20
1993/10/31 16424.53 16253.51
1993/11/30 16249.54 16110.31
1993/12/31 16616.86 16450.40
1994/01/31 16791.38 16638.26
1994/02/28 16295.73 16207.33
1994/03/31 15550.82 15547.37
1994/04/30 15640.25 15679.21
1994/05/31 15818.19 15815.15
1994/06/30 15735.09 15718.52
1994/07/31 16030.39 16006.64
1994/08/31 16092.90 16062.02
1994/09/30 15846.59 15826.23
1994/10/31 15558.35 15545.16
1994/11/30 15298.07 15264.10
1994/12/31 15661.97 15600.07
1995/01/31 16131.65 16045.92
1995/02/28 16505.48 16512.53
1995/03/31 16706.64 16702.26
1995/04/30 16738.76 16721.97
1995/05/31 17138.02 17255.57
1995/06/30 17032.37 17105.44
1995/07/31 17096.06 17267.60
1995/08/31 17238.15 17486.56
1995/09/30 17392.16 17597.25
1995/10/31 17658.12 17853.11
1995/11/30 17907.19 18149.29
1995/12/31 18066.17 18323.71
1996/01/31 18162.82 18462.05
1996/02/29 18078.57 18337.43
1996/03/31 17856.00 18103.08
1996/04/30 17789.47 18051.85
1996/05/31 17773.08 18044.63
1996/06/30 17963.92 18241.13
1996/07/31 18108.94 18407.13
1996/08/31 18091.37 18402.71
1996/09/30 18316.50 18660.35
1996/10/31 18543.98 18871.40
1996/11/30 18869.39 19216.74
1996/12/31 18801.23 19136.03
1997/01/31 18849.26 19172.20
1997/02/28 18990.83 19348.20
1997/03/31 18766.39 19090.29
1997/04/30 18897.10 19250.08
1997/05/31 19150.25 19539.60
1997/06/30 19332.79 19747.69
1997/07/31 19829.54 20294.71
1997/08/31 19650.31 20104.54
1997/09/30 19869.04 20343.18
1997/10/31 19986.76 20473.99
1997/11/30 20084.57 20594.38
1997/12/31 20370.99 20894.85
1998/01/31 20562.15 21110.49
1998/02/28 20549.39 21116.82
1998/03/31 20563.06 21135.40
1998/04/30 20482.97 21040.08
1998/05/31 20766.44 21373.14
1998/06/30 20830.14 21457.36
1998/07/31 20876.59 21511.21
1998/08/31 21198.79 21843.56
1998/09/30 21446.20 22115.73
1998/10/31 21456.48 22115.29
1998/11/30 21482.54 22192.91
IMATRL PRASUN SHR__CHT 19981130 19981210 144308 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan New Jersey Municipal Income Fund on November 30,
1988. As the chart shows, by November 30, 1998, the value of your
investment would have grown to $21,483 - a 114.83% 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 and capital gains, if any, reinvested, the same $10,000
would have grown to $22,193, a 121.93% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY
IS NO GUARANTEE OF HOW IT WILL
DO TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN,
YOU MIGHT LOSE MONEY. BUT IF
YOU CAN RIDE OUT THE MARKET'S
UPS AND DOWNS, YOU MAY
HAVE A GAIN.
(CHECKMARK)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
DIVIDEND RETURNS 4.98% 5.19% 5.37% 6.40% 5.26%
CAPITAL RETURNS 1.98% 1.25% 0.00% 10.66% -11.12%
TOTAL RETURNS 6.96% 6.44% 5.37% 17.06% -5.86%
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital 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, if
any, paid by the fund are reinvested.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.41(CENTS) 27.07(CENTS) 54.78(CENTS)
ANNUALIZED DIVIDEND RATE 4.66% 4.69% 4.78%
30-DAY ANNUALIZED YIELD 4.02% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.71% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period
and do not reflect tax reclassifications. If you annualize this
number, based on an average share price of $11.52 over the past month,
$11.50 over the past six months and $11.46 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 40.08% combined effective 1998
federal and state tax bracket, but does not reflect the payment of the
alternative minimum tax, if applicable.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Prospects were bright for
fixed-income markets at the
beginning of the 12-month period
ending November 30, 1998, with
positive U.S. economic news and
the Federal Reserve Board's
reluctance to raise interest rates
playing key roles. However,
near-record issuance of municipal
bonds, greeted by only moderate
enthusiasm, continued to contribute
to their underperformance
relative to taxable bonds. For the
12-month period, the Lehman
Brothers Municipal Bond Index -
a popular measure of the
municipal bond market - returned
7.76%. By comparison, the
Lehman Brothers Aggregate Bond
Index - a widely followed
measure of taxable bond
performance - returned 9.45%
during the period. Year-to-date
municipal bond issuance of over
$253 billion has already exceeded
all of last year's total, and is on
track to top the record $293 billion
muni-bond issuance during 1993.
Despite the tepid demand, munis
were yielding at the end of the
period about the same as 30-year
Treasuries - the safe haven of
choice during the market's
downdraft in the late summer and
early fall. While the recent equity
rally has put further pressure on
municipal bond prices, their yields
are historically high, which may
stimulate demand in the near
term. Munis, like the majority of
fixed-income issues, also have
been bolstered by three recent
interest-rate cuts by the Federal
Reserve Board, which dropped the
fed funds rate to 4.75%.
An interview with Norm Lind, Portfolio Manager of Spartan New Jersey
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, NORM?
A. For the 12-month period that ended November 30, 1998, the fund had
a total return 6.96%. To get a sense of how the fund did relative to
its competitors, the New Jersey municipal debt funds average returned
7.01% for the same 12-month period, according to Lipper Analytical
Services. Additionally, the Lehman Brothers New Jersey Municipal Bond
Index with Port Authority of New York and New Jersey - which tracks
the types of securities in which the fund invests - returned 7.33% for
the same one-year period.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST 12
MONTHS?
A. On a positive note, some of the fund's investments in hospitals
experienced significant price gains when they were advance refunded,
the municipal market's version of refinancing debt at a lower interest
rate. Issuers often undertake refundings to cut their debt costs by
retiring older bonds with higher interest rates and placing the
proceeds in U.S. Treasuries. They finance this by selling new bonds at
lower, prevailing rates. Although somewhat complicated, an advance
refunding results in higher prices for the original, refunded bonds
because they assume the higher credit rating of the U.S. Treasuries
securities that back them. In addition, the fund's stake in premium
coupon bonds - which trade above face value because they offer yields
higher than prevailing interest rates - also performed well. That's
partly because they are less vulnerable to price declines that can
result from unfavorable tax treatment when interest rates decline.
Q. WHICH TYPES OF BONDS WERE LAGGARDS DURING THE PERIOD?
A. Bonds sensitive to being prepaid before maturity lagged the overall
municipal market. For example, housing bonds - which are pools of home
mortgages - experienced increased prepayment activity when interest
rates fell and mortgage borrowers refinanced their debt. While
prepayment is good for borrowers because it lowers their interest
costs, it can be bad for housing-bond holders because it potentially
forces them to reinvest at lower prevailing interest rates.
Q. THE FUND'S INVESTMENTS ARE CONCENTRATED IN BONDS RATED A OR HIGHER.
WHY DID THE FUND HAVE SUCH A HIGH-QUALITY PROFILE?
A. Throughout the year, Baa-rated bonds' yield advantage over
higher-rated bonds became smaller and smaller. The ever-decreasing
amount of additional income wasn't enough to cover the extra risk that
Baa-rated bonds carried, in my opinion. Furthermore, I didn't think
there was much room for spreads to tighten further, so the potential
upside for Baa-rated bonds was limited. I also became concerned that
if the spread - the difference in income between Aaa-rated and
Baa-rated bonds - were to increase again in response to an economic
downturn or other reason, the prices of Baa-rated bonds would suffer
price losses that would more than overwhelm their small income
advantage. Instead of exposing the fund to those risks without
adequate compensation for doing so, I chose to emphasize the
higher-quality tiers of the New Jersey municipal market.
Q. DID YOU SHIFT THE FUND'S INVESTMENTS AMONG VARIOUS SECTORS OF THE
MUNICIPAL MARKET?
A. Yes, I did. As it became increasingly more difficult to find
attractively priced bonds from the market's dominant issuers - New
Jersey Turnpike Authority and the Port Authority of New York and New
Jersey - due to strong demand for them, I looked toward other, less
popular segments of the market. Relatively high-quality, high-yielding
bonds issued by schools - either directly or through a state program -
offered a number of opportunities, and I increased the fund's stake in
them during the past six months.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?
A. Municipals may be in for a fairly strong period as they play catch
up to the U.S. Treasury market that has so far this year outpaced the
municipal market. That said, the direction of interest rates will be
the primary determinant of municipal performance, and it's anybody's
guess where they will be six months or a year from now. As far as the
fund is concerned, I'll continue to emphasize bonds that I think offer
good value given their yields and their risk. I'm comfortable sticking
with a fairly large weighting in high-quality bonds for the time
being, because I feel that lower-quality securities currently do not
offer enough additional yield given their risks.
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.
NORM LIND ON THE ROLE OF
MUNICIPAL BOND INSURANCE:
"The role of municipal bond
insurance has grown dramatically
during the past decade as the
number of municipal bonds with
insurance has mushroomed.
Municipal bond insurance,
underwritten by private insurers,
guarantees the timely payment of
interest and principal should the
issuer default on the underlying
debt. Insurance can be purchased
either by the issuer or an investor.
Because they generally enjoy the
highest credit rating (Aaa, AAA or
other, depending on the insurer),
insured bonds tend to be more
popular than uninsured bonds among
many types of investors.
"There are a couple of
characteristics that investors should
understand about insured bonds.
They tend to offer lower yields than
similarly rated uninsured bonds
because the cost of insurance is
passed on to the investor. Second,
insurance doesn't protect a bond
from suffering price losses. Like
all bonds, insured bond prices
fluctuate in response to supply,
demand, interest-rate movements
and other factors."
FUND FACTS
GOAL: to provide high current
income exempt from New Jersey
state and federal income taxes by
investing normally in
investment-grade municipal
securities
FUND NUMBER: 416
TRADING SYMBOL: FNJHX
START DATE: January 1, 1988
SIZE: as of November 30,
1998, more than $389 million
MANAGER: Norm Lind, since
1997; manager, various Fidelity
and Spartan municipal income
funds; joined Fidelity in 1986
(checkmark)
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF NOVEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATIONS 23.7 26.6
TRANSPORTATION 21.9 20.3
HEALTH CARE 10.7 10.2
WATER & SEWER 10.6 9.9
HOUSING 8.3 7.5
</TABLE>
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 12.5 12.7
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1998
6 MONTHS AGO
YEARS 6.3 6.3
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 NOVEMBER 30, 1998 AS OF MAY 31, 1998
AAA 47.2%
AA, A 37.5%
BAA 9.3%
BA, B 0.7%
NOT RATED 3.7%
SHORT-TERM
INVESTMENTS 1.6%
AAA 43.0%
AA, A 41.4%
BAA 9.7%
BA, B 0.8%
NOT RATED 4.4%
SHORT-TERM
INVESTMENTS 0.7%
ROW: 1, COL: 1, VALUE: 47.2
ROW: 1, COL: 2, VALUE: 37.5
ROW: 1, COL: 3, VALUE: 9.0
ROW: 1, COL: 4, VALUE: 1.0
ROW: 1, COL: 5, VALUE: 3.7
ROW: 1, COL: 6, VALUE: 1.6
ROW: 1, COL: 1, VALUE: 43.0
ROW: 1, COL: 2, VALUE: 41.0
ROW: 1, COL: 3, VALUE: 9.699999999999999
ROW: 1, COL: 4, VALUE: 1.1
ROW: 1, COL: 5, VALUE: 4.4
ROW: 1, COL: 6, VALUE: 1.0
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 NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - 85.9%
Atlantic County Ctfs. of Prtn. Pub. Facilities Lease
Agreement Rfdg.:
7.4% 3/1/07 (FGIC Insured) Aaa $ 3,035,000 $ 3,723,217
7.4% 3/1/08 (FGIC Insured) Aaa 3,260,000 4,042,367
Atlantic County Impt. Auth. Luxury Tax Rev.
(Convention Ctr.):
7.375% 7/1/10 (MBIA Insured) (Escrowed to Aaa 1,000,000 1,238,510
Maturity) (f)
7.4% 7/1/16 (MBIA Insured) (Escrowed to Aaa 3,510,000 4,551,101
Maturity) (f)
Atlantic County Util. Auth. Swr. Rev. Rfdg.:
Series A, 5.85% 1/15/15 (AMBAC Insured) Aaa 2,620,000 2,847,259
5.25% 1/15/11 (AMBAC Insured) Aaa 4,145,000 4,428,311
Bergen County Utils. Auth. Wtr. Poll. Cont. Rev.
Rfdg.:
(Cap. Appreciation) Series B, 0% 12/15/07 Aaa 7,500,000 5,161,125
(FGIC Insured)
Series B, 5.6% 12/15/03 (FGIC Insured) Aaa 2,000,000 2,161,940
Camden County Muni. Util. Auth. Swr. Rev.
Rfdg.:
5.5% 7/15/05 (FGIC Insured) Aaa 1,110,000 1,207,214
5.5% 7/15/08 (FGIC Insured) Aaa 1,300,000 1,434,134
6% 7/15/03 (FGIC Insured) Aaa 3,180,000 3,470,970
6% 7/15/06 (FGIC Insured) Aaa 1,060,000 1,195,892
Cape May County Ind. Poll. Cont. Fing. Auth. Aaa 1,350,000 1,710,504
Rev. Rfdg. (Atlantic City Elec. Co.) Series A,
6.8% 3/1/21 (MBIA Insured)
Delaware River Port Auth. Pennsylvania & New
Jersey Rev. Rfdg. Series B:
5.25% 1/1/10 (AMBAC Insured) Aaa 2,245,000 2,397,840
5.25% 1/1/11 (AMBAC Insured) Aaa 2,365,000 2,504,748
Edison Township Gen. Oblig. 6.5% 6/1/11 A1 1,000,000 1,186,190
Essex County Impt. Auth. Rev.:
(Orange Franchise) 5.75% 7/1/27 (MBIA Aaa 550,000 592,537
Insured)
7% 12/1/20 (AMBAC Insured) (Pre-Refunded Aaa 1,000,000 1,087,550
to 12/1/00 @ 102) (f)
Essex County Util. Auth. Solid Waste Rev. Series A:
5.75% 4/1/05 (FSA Insured) Aaa 1,000,000 1,095,080
6% 4/1/06 (FSA Insured) Aaa 1,000,000 1,120,590
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Essex County Gen. Oblig.:
Rfdg.:
Series A 1, 6% 11/15/05 (FGIC Insured) Aaa $ 3,000,000 $ 3,351,330
Series A 2, 6.25% 9/1/10 (AMBAC Aaa 4,735,000 5,341,317
Insured)
Series A:
5.75% 9/1/07 (AMBAC Insured) Aaa 1,385,000 1,546,449
5.75% 9/1/08 (AMBAC Insured) Aaa 1,465,000 1,639,379
5.75% 9/1/09 (AMBAC Insured) Aaa 1,550,000 1,739,705
Jersey City Muni. Utils. Auth. Wtr. Rev. 5.25% Aaa 3,720,000 3,981,404
4/1/05 (FSA Insured)
Jersey City Swr. Auth. Swr. Rev. Rfdg.:
6% 1/1/07 (AMBAC Insured) Aaa 2,175,000 2,460,317
6% 1/1/09 (AMBAC Insured) Aaa 1,000,000 1,139,190
Lenape Reg'l. High School Dist:
7.625% 1/1/13 (MBIA Insured) Aaa 675,000 890,662
7.625% 1/1/14 (MBIA Insured) Aaa 1,000,000 1,331,570
Middlesex County Poll. Cont. Auth. Rev. Rfdg.
(Amerada Hess):
6.875% 12/1/22 - 5,000,000 5,380,050
7.875% 6/1/22 - 7,750,000 8,936,138
Middlesex County Gen. Oblig. 4.75% 8/1/02 Aaa 2,665,000 2,759,874
Middletown Township Board Ed. 5.7% 8/1/10 Aaa 1,500,000 1,639,470
(MBIA Insured)
Monmouth County Impt. Auth. Rev. Wastewtr. BBB 1,000,000 1,060,940
Treatment Facilities (Asbury Park Proj.)
7.375% 12/1/09 (Pre-Refunded to 12/1/99
@ 102) (f)
Morris County Gen. Oblig. 6.5% 8/1/03 Aaa 2,180,000 2,431,332
New Jersey Bldg. Auth. Bldg. Rev. Rfdg.:
5.75% 6/15/09 Aa2 3,000,000 3,345,900
5% 6/15/14 Aa2 4,000,000 4,034,880
New Jersey Econ. Dev. Auth. Econ. Dev. Rev. A2 2,000,000 2,481,080
(Weyerhauser Co. Proj.) 9% 11/1/04
New Jersey Econ. Dev. Auth. Marketing
Transition Facilities Rev. (Senior Lien) Series A:
5.25% 7/1/01 (MBIA Insured) Aaa 1,000,000 1,039,240
5.8% 7/1/07 (MBIA Insured) Aaa 2,300,000 2,531,771
5.8% 7/1/09 (MBIA Insured) Aaa 5,000,000 5,501,200
5.875% 7/1/11 (MBIA Insured) Aaa 4,090,000 4,489,266
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Rev.:
(Edl. Testing Svc.):
Series A, 6.5% 5/15/05 (MBIA Insured) Aaa $ 2,500,000 $ 2,743,225
(Escrowed to Maturity) (f)
Series B, 6.125% 5/15/15 (MBIA Insured) Aaa 2,000,000 2,276,580
(Pre-Refunded to 5/15/05 @ 102) (f)(g)
Rfdg. (Edl. Testing Svc.) Series A:
5% 5/15/08 (MBIA Insured) Aaa 2,285,000 2,428,978
5% 5/15/09 (MBIA Insured) Aaa 2,600,000 2,755,350
New Jersey Econ. Dev. Auth. Wtr. Facilities Rev. Aaa 7,700,000 8,307,068
(American Wtr. Co., Inc. Proj.) 5.95%
11/1/29 (FGIC Insured) (e)
New Jersey Edl. Facilities Auth. Rev.:
(Princeton Theological Seminary) Series B:
5.875% 7/1/22 Aaa 3,280,000 3,575,003
5.9% 7/1/26 Aaa 2,000,000 2,169,660
Rfdg.:
(Seton Hall Univ. Proj.) 5.25% 7/1/09 Aaa 2,200,000 2,331,032
(AMBAC Insured) (b)
(Saint Peters College) Series B:
5.375% 7/1/12 Baa3 1,450,000 1,472,519
5.375% 7/1/18 Baa3 1,000,000 1,006,860
New Jersey Gen. Oblig.:
Rfdg.:
Series D:
5.75% 2/15/06 Aa1 1,950,000 2,161,673
6% 2/15/13 Aa1 7,500,000 8,635,425
Series E, 6% 7/15/10 Aa1 2,000,000 2,309,700
5.9% 8/1/02 Aa1 1,500,000 1,611,405
6.5% 7/15/04 Aa1 9,035,000 10,207,653
New Jersey Health Care Facilities Fing. Auth. Rev.:
(East Orange Gen. Hosp.) Series B, 7.75% BBB+ 2,450,000 2,591,953
7/1/20
(Elizabeth Gen. Med. Ctr.) Series C:
7.1% 7/1/99 Baa1 1,125,000 1,145,385
7.25% 7/1/06 Baa1 1,975,000 2,091,999
(Muhlenberg Reg'l. Med. Ctr.) Series B, 8% Aaa 2,000,000 2,046,660
7/1/18 (AMBAC Insured)
(Pascack Valley Hosp.) Series 1991, 6.7% BBB 5,200,000 5,532,592
7/1/11
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Health Care Facilities Fing. Auth. Rev.: - continued
Rfdg.:
(AHS Hosp. Corp.) Series A, 6% 7/1/11 Aaa $ 3,500,000 $ 4,017,370
(AMBAC Insured)
(Atlantic City Med. Ctr.) Series C, 6.8% A3 4,200,000 4,593,246
7/1/11
(Barnabas Med. Ctr. Proj.) Series A, 4.75% Aaa 2,000,000 1,929,620
7/1/28 (MBIA Insured)
(Burdette Tomlin Mem. Hosp.) Series D, Aaa 1,710,000 1,829,375
6.25% 7/1/06 (FGIC Insured)
(Commty. Med. Ctr./Kimball Med. Ctr.) Aaa 3,835,000 4,090,028
5.25% 7/1/11 (FSA Insured)
(Hackensack Univ. Med. Ctr.) Series A, Aaa 4,665,000 4,943,874
5.25% 1/1/12 (MBIA Insured)
(Kennedy Health Sys.) Series B:
5% 7/1/09 (MBIA Insured) Aaa 1,000,000 1,055,960
5.75% 7/1/07 (MBIA Insured) Aaa 1,930,000 2,154,382
5.75% 7/1/08 (MBIA Insured) Aaa 1,135,000 1,269,191
(Newcombe Med. Ctr.) Series A, 7.875% Ba3 2,465,000 2,597,346
7/1/03
New Jersey Hsg. & Mtg. Fin. Agcy. Rev.:
(Home Buyer):
Series B, 7.9% 10/1/22 (MBIA Insured) (e) Aaa 1,030,000 1,068,172
Series W, 4.75% 10/1/17 (MBIA Insured) Aaa 4,940,000 4,967,417
Rfdg. Series 1:
6% 11/1/02 A+ 3,210,000 3,342,220
6.2% 11/1/04 A+ 3,100,000 3,328,594
6.45% 11/1/07 A+ 5,090,000 5,461,112
New Jersey Hsg. Fin. Auth. Gen. Resolution Series A:
6.9% 11/1/07 AA+ 2,670,000 2,859,463
6.95% 11/1/08 AA+ 2,265,000 2,422,372
7% 11/1/09 AA+ 2,855,000 3,053,194
7.05% 11/1/10 AA+ 3,500,000 3,742,725
New Jersey Hwy. Auth. Garden St. Parkway
(Senior Parkway):
6% 1/1/05 A1 2,200,000 2,362,448
6% 1/1/19 (Escrowed to Maturity) (f) Aaa 4,485,000 5,142,591
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Hwy. Auth. Garden St. Parkway
(Senior Parkway): - continued
6.1% 1/1/06 A1 $ 1,750,000 $ 1,876,315
6.2% 1/1/10 (c) A1 7,000,000 8,053,150
New Jersey Tpk. Auth. Tpk. Rev.:
Rfdg.:
Series A:
6.3% 1/1/01 Baa1 1,000,000 1,045,380
6.4% 1/1/02 Baa1 1,000,000 1,067,020
6.75% 1/1/08 Baa1 1,000,000 1,057,630
Series C:
6.5% 1/1/09 Baa1 1,300,000 1,471,041
6.5% 1/1/16 Baa1 615,000 716,211
10.375% 1/1/03 (Escrowed to Maturity) (f) AAA 6,950,000 7,993,682
Series A:
5.4% 1/1/99 Baa1 1,900,000 1,902,850
5.6% 1/1/00 Baa1 1,585,000 1,614,798
5.9% 1/1/03 Baa1 9,000,000 9,535,590
New Jersey Trans. Corp. Series A, 5.4% 9/1/02 Aaa 1,100,000 1,155,242
(FSA Insured)
New Jersey Trans. Trust Fund Auth. Trans. Sys.:
Rfdg. Series B, 6.5% 6/15/10 (MBIA Insured) Aaa 3,000,000 3,609,630
Series B:
5.25% 6/15/10 Aa2 5,000,000 5,305,500
6% 6/15/06 Aa2 16,450,000 18,459,854
New Jersey Wastewtr. Treatment Trust Ln. Rev.:
Series A:
6% 7/1/10 Aa1 15,000 16,014
6% 7/1/10 (Pre-Refunded to 7/1/01 Aa1 985,000 1,059,368
@ 102) (f)
6.875% 6/15/06 Aa2 105,000 111,201
6.875% 6/15/09 Aa2 80,000 84,929
7% 6/15/10 Aa2 140,000 148,819
New Jersey Wtr. Supply Auth. Rev. Rfdg. Aaa 2,465,000 2,659,439
(Delaware & Raritan Sys.) 5.375% 11/1/12
(MBIA Insured)
Newark Gen. Oblig. 5.3% 9/1/16 Aaa 3,500,000 3,614,065
(MBIA Insured)
North Brunswick Township Rfdg.:
5.25% 5/15/10 (FGIC Insured) Aaa 1,235,000 1,317,189
5.25% 5/15/11 (FGIC Insured) Aaa 1,290,000 1,366,471
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (A) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Ocean County Gen. Oblig. Rfdg. 5% 10/1/09 Aa2 $ 3,475,000 $ 3,682,353
Passaic County Util. Auth. (Solid Waste Sys.Proj.) Aaa 3,725,000 3,696,914
0% 3/1/99 (MBIA Insured)
Rutgers St Univ. Rfdg. (State Univ. of New Jersey) A1 3,000,000 3,522,180
Series A, 6.4% 5/1/13
335,983,798
NEW YORK & NEW JERSEY - 10.2%
Port Auth. New York & New Jersey Gen. Oblig.:
77th Series, 6.25% 1/15/27 (e) A1 5,000,000 5,290,550
92nd Series, 4.75% 1/15/29 A1 7,000,000 6,667,640
109th Series, 5.375% 1/15/32 (e) A1 11,500,000 11,842,585
117th Series, 5.125% 11/15/11 Aaa 5,220,000 5,476,198
(FGIC Insured) (e)
Rfdg.:
94th Series, 5.7% 12/1/10 A1 6,385,000 6,873,389
107th Series:
6% 10/15/05 (e) A1 1,740,000 1,926,163
6% 10/15/06 (e) A1 1,535,000 1,714,288
39,790,813
PUERTO RICO - 2.3%
Puerto Rico Commonwealth Gen. Oblig. Rfdg. Baa1 2,000,000 2,127,040
Series A, 6% 7/1/14
Puerto Rico Commonwealth Infrastructure Fing. Baa1 510,000 521,597
Auth. Series A, 7.75% 7/1/08
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Series DD, Aaa 4,000,000 4,155,480
5% 7/1/12 (FSA Insured)
Puerto Rico Hsg. Fin. Corp. Rev. (Multi-family AA 2,290,000 2,383,936
Mtg.) Series A I, 7.5% 4/1/22, LOC Puerto
Rico Commonwealth Govt. Dev. Bank Rev.
9,188,053
TOTAL MUNICIPAL BONDS 384,962,664
(Cost $360,715,395)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL NOTES - 1.6%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 1.6%
New Jersey Econ. Dev. Auth. Dock Facilities Rev. Rfdg. $ 500,000 $ 500,000
(Bayonne/IMTT Proj.) Series 1993 A, 3.2%, LOC First Nat'l.
Bank of Chicago, VRDN (d)
New Jersey Econ. Dev. Auth. Econ. Dev. Rev. Rfdg. (Foreign 3,300,000 3,300,000
Trade Zone Proj.) Series 1998, 3.25%, LOC Morgan
Guaranty Trust Co., NY, VRDN (d)
New Jersey Econ. Dev. Auth. Natural Gas Facilities Rev. 400,000 400,000
(NUI Corp. Proj.) Series 1996 A, 3.3% (AMBAC Insured)
(BPA Bank of New York NA), VRDN (d)(e)
New Jersey Econ. Dev. Auth. Wtr. Facilities Rev. Rfdg.:
(United Wtr., Inc. Proj.) Series 1996 A, 3.3% (AMBAC 900,000 900,000
Insured) (BPA Bank of New York NA), VRDN (d)(e)
(United Wtr., Inc. Proj.) Series 1996 B, 3% (AMBAC Insured) 1,000,000 1,000,000
(BPA Bank of New York NA), VRDN (d)
TOTAL MUNICIPAL NOTES 6,100,000
(Cost $6,100,000)
TOTAL INVESTMENT IN SECURITIES - 100% $ 391,062,664
(Cost $366,815,395)
</TABLE>
<TABLE>
<CAPTION>
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FUTURES CONTRACTS
EXPIRATION UNDERLYING UNREALIZED
DATE FACE AMOUNT GAIN/(LOSS)
SOLD
25 Bond Buyer Municipal Bond Index Contracts Dec. 1998 $ 3,161,719 $ (34,650)
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 0.8%
</TABLE>
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(b) Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
(c) 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 $195,577.
(d) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(e) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(f) Security collateralized by an amount sufficient to pay interest
and principal.
(g) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISTION ACQUISITION
DATE COST
New Jersey Econ. 8/23/95 $ 1,953,920
Dev. Auth. Rev.
(Edl. Testing Svc.)
Series B, 6.125%
5/15/15 (MBIA
Insured) (Pre-Refunded
to 5/15/05 @ 102)
OTHER INFORMATION
The fund invested in securities that were not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $2,276,580
or 0.6% of net assets (see Note 2 of Notes to Financial Statements).
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 75.8% AAA, AA, A 81.4%
Baa 6.9% BBB 8.8%
Ba 0.7% BB 0.0%
B 0.0% B 0.7%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 3.7%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:
General Obligations 23.7%
Transportation 21.9
Health Care 10.7
Water & Sewer 10.6
Housing 8.3
Escrowed/Pre-Refunded 6.9
Industrial Development 5.3
Others (individually less than 5%) 12.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $366,815,395. Net unrealized appreciation
aggregated $24,247,269, all of which related to appreciated investment
securities.
The fund hereby designates approximately $1,228,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
During fiscal year ended 1998, 100% of the fund's income dividends
were free from federal income tax, and 5.56% of the fund's income
dividends were subject to the federal alternative minimum tax.
(Unaudited)
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
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STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at value (cost $366,815,395) - $ 391,062,664
See accompanying schedule
Receivable for fund shares sold 205,592
Interest receivable 7,002,667
TOTAL ASSETS 398,270,923
LIABILITIES
Payable to custodian bank $ 10,988
Payable for investments purchased 5,423,946
Regular delivery
Delayed delivery 2,267,320
Payable for fund shares redeemed 286,169
Distributions payable 395,903
Accrued management fee 174,807
Payable for daily variation on futures contracts 11,719
Other payables and accrued expenses 3,838
TOTAL LIABILITIES 8,574,690
NET ASSETS $ 389,696,233
Net Assets consist of:
Paid in capital $ 363,695,636
Accumulated undistributed net realized gain (loss) 1,787,978
on investments
Net unrealized appreciation (depreciation) on investments 24,212,619
NET ASSETS, for 33,734,930 shares outstanding $ 389,696,233
NET ASSET VALUE, offering price and redemption price per $11.55
share ($389,696,233 (divided by) 33,734,930 shares)
</TABLE>
<TABLE>
<CAPTION>
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STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 19,899,148
EXPENSES
Management fee $ 2,054,831
Non-interested trustees' compensation 324
Total expenses before reductions 2,055,155
Expense reductions (24,362) 2,030,793
NET INTEREST INCOME 17,868,355
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,183,130
Futures contracts (69,318) 2,113,812
Change in net unrealized appreciation (depreciation) on:
Investment securities 5,152,201
Futures contracts (59,403) 5,092,798
NET GAIN (LOSS) 7,206,610
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,074,965
FROM OPERATIONS
OTHER INFORMATION
Expense reductions $ 22,515
Custodian credits
Transfer agent credits 1,847
$ 24,362
</TABLE>
<TABLE>
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<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 17,868,355 $ 17,711,284
Net interest income
Net realized gain (loss) 2,113,812 2,069,166
Change in net unrealized appreciation (depreciation) 5,092,798 2,333,618
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,074,965 22,114,068
FROM OPERATIONS
Distributions to shareholders (17,868,355) (17,711,284)
From net interest income
From net realized gain (1,741,847) (4,370,732)
TOTAL DISTRIBUTIONS (19,610,202) (22,082,016)
Share transactions 60,470,984 38,337,168
Net proceeds from sales of shares
Reinvestment of distributions 14,908,087 17,295,119
Cost of shares redeemed (52,762,136) (51,444,752)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 22,616,935 4,187,535
SHARE TRANSACTIONS
Redemption fees 21,466 6,979
TOTAL INCREASE (DECREASE) IN NET ASSETS 28,103,164 4,226,566
NET ASSETS
Beginning of period 361,593,069 357,366,503
End of period $ 389,696,233 $ 361,593,069
OTHER INFORMATION
Shares
Sold 5,270,314 3,422,621
Issued in reinvestment of distributions 1,300,244 1,543,723
Redeemed (4,606,133) (4,589,671)
Net increase (decrease) 1,964,425 376,673
</TABLE>
<TABLE>
<CAPTION>
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FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, $ 11.380 $ 11.380 $ 11.420 $ 10.320 $ 11.760
beginning of period
Income from Investment .548 .561 .588 .623 .637
Operations
Net interest income
Net realized and unrealized .224 .140 - 1.099 (1.291)
gain (loss)
Total from investment .772 .701 .588 1.722 (.654)
operations
Less Distributions
From net interest income (.548) (.561) (.588) (.623) (.637)
From net realized gain (.055) (.140) (.040) - (.150)
Total distributions (.603) (.701) (.628) (.623) (.787)
Redemption fees added to paid .001 - - .001 .001
in capital
Net asset value, end of period $ 11.550 $ 11.380 $ 11.380 $ 11.420 $ 10.320
TOTAL RETURN A 6.96% 6.44% 5.37% 17.06% (5.86)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 389,696 $ 361,593 $ 357,367 $ 366,569 $ 327,060
(000 omitted)
Ratio of expenses to average .55% .55% .55% .55% .55%
net assets
Ratio of expenses to average .54% B .55% .52% B .55% .55%
net assets after expense
reductions
Ratio of net interest income to 4.78% 5.00% 5.26% 5.64% 5.70%
average net assets
Portfolio turnover rate 12% 16% 57% 36% 8%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income but does not include 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 certain fund expenses, the past five years and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN NJ MUNICIPAL MONEY MARKET 3.06% 16.75% 33.09%
New Jersey Tax-Free 2.81% 15.18% n/a
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or since
the fund started on May 1, 1990. 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
tax-free money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past one year average represents a peer group
of 15 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
SPARTAN NJ MUNICIPAL MONEY MARKET 3.06% 3.15% 3.38%
New Jersey Tax-Free 2.81% 2.85% n/a
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
11/30/98 8/31/98 6/1/98 3/2/98 12/1/97
Spartan New Jersey 2.84% 2.90% 3.27% 2.99% 3.34%
Municipal Money Market
New Jersey 2.51% 2.57% 2.99% 2.66% 3.06%
Tax-Free Money Market
Funds Average
Spartan New Jersey 4.74% 4.84% 5.46% 4.99% 5.57%
Municipal Money Market -
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. If the adviser had not reimbursed
certain fund expenses during the periods shown, the yields would have
been lower. You can compare these yields to the New Jersey 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 1998 federal and state income tax rate of 40.08%. A
portion of the fund's income may be subject to the federal alternative
minimum tax.
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 NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Spartan New Jersey
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the fund's fiscal
year, November 30, 1998. During this time, the Federal Reserve Board
lowered the rate banks charge each other for overnight loans - known
as the fed funds rate - three times. Each move consisted of an
"easing" of 0.25 percentage points; the fed funds rate fell from 5.50%
to 4.75%. These significant moves were unanticipated early in the
summer given the investment climate of the first eight months of the
reporting period. During that span, market sentiment reflected an
expectation of a fed "tightening," or raising of short-term interest
rates to slow the economy and guard against inflation. Although
inflation had been generally non-existent, signs such as a very low
unemployment rate and sustained economic growth pointed to the
potential for the build-up of inflationary pressures. International
problems, especially in Asia, helped dampen economic growth enough to
keep the Fed on the sidelines - leaving interest rates unchanged -
through the second quarter of 1998. However, the problems in global
markets intensified starting in August.
Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?
A. Russia defaulted on some of its outstanding debt and the value of
its currency, the ruble, plummeted, sparking concerns that currency
devaluations would take place in other emerging market countries, such
as those in Latin America. Global stock markets went into a freefall,
and investors worldwide flocked to U.S. Treasuries in pursuit of a
haven safe enough to withstand this turmoil. Further problems arose in
early fall when rumors of the potential collapse of certain hedge
funds hit the market. Market sentiment quickly swung to an
anticipation of Fed rate cuts. The Fed followed through with 0.25
percentage point decreases at the end of September, in a surprise move
on October 15 between meetings of its Open Market Committee, and again
on November 17. These moves were an attempt to bring stability back to
world markets, and appear to have succeeded.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?
A. Given the uncertainty of the markets, I maintained a relatively
neutral stance with the fund's average maturity, recognizing that the
interest-rate picture was changing in the late summer and early fall.
Compared to its competitors, the fund's average maturity was generally
a bit longer throughout the period. That stance was due to market
conditions I've discussed in the past. Specifically, one-year
fixed-rate securities in the New Jersey market usually offer a yield
advantage over shorter-term variable-rate notes, because strong demand
for the latter makes it easier for their issuers to offer the debt at
lower rates. In addition, I turned some of my focus - within the
limits set by the fund's prospectus - to out-of-state investment
opportunities that offered more appealing after-tax yields than
tax-free alternatives in the New Jersey market. Even though more of
shareholders' income from the fund will be taxable at the state level
this year because of the out-of-state investments, this strategy was
pursued so the fund could provide higher yields on a tax-adjusted
basis than if I had chosen to invest the same assets in lower-yielding
tax-exempt New Jersey securities instead.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 2.84%,
compared to 3.35% 12 months ago. The more recent seven-day yield was
the equivalent of a 4.74% taxable rate of return for New Jersey
investors in the 40.08% combined state and federal income tax bracket.
Through November 30, 1998, the fund's 12-month total return was 3.06%,
compared to 2.81% for the New Jersey tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The market reflects uncertainty over the direction of the Fed's
interest-rate policy. After three rate cuts, it appears that the Fed
wants to wait and see what effect its moves will have on the economy.
Typically, there is at least a six-month lag before the Fed's moves
start to influence the economy. Inflation remains tame, but
unemployment is low - often a harbinger of inflation as increased
labor costs are passed on to the consumer - and the economy has shown
signs of continued growth. While the Fed has gone a long way toward
addressing its concerns about the global markets, it appears poised to
lower rates further if some U.S. economic weakness develops or if
global turmoil resurfaces. However, it would be a surprise to most
market observers if the Fed did so before its Open Market Committee
meeting in February 1999.
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: 423
TRADING SYMBOL: FSJXX
START DATE: MAY 1, 1990
SIZE: AS OF NOVEMBER 30, 1998,
MORE THAN $528 MILLION
MANAGER: SCOTT ORR, SINCE
1997; MANAGER, VARIOUS FIDELITY
AND SPARTAN MONEY MARKET
FUNDS: JOINED FIDELITY IN 1989
(CHECKMARK)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 61 71 69
31 - 90 12 6 12
91 - 180 16 6 9
181 - 397 11 17 10
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Spartan New Jersey Municipal 57 DAYS 63 Days 52 Days
Money Market Fund
New Jersey Tax-Free Money 56 DAYS 50 Days 51 Days
Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
Row: 1, Col: 1, Value: 53.6
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 1.6
Row: 1, Col: 4, Value: 26.0
Row: 1, Col: 5, Value: 8.0
Variable rate demand
notes (VRDNs) 59%
Commercial paper
(including CP mode) 14%
Tender bonds 0%
Municipal notes 26%
Other 1%
Variable rate demand
notes (VRDNs) 54%
Commercial paper
(including CP mode) 11%
Tender bonds 1%
Municipal notes 26%
Other 8%
Row: 1, Col: 1, Value: 58.6
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 26.0
Row: 1, Col: 5, Value: 1.6
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
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<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 73.6%
Bernardsville Gen. Oblig. BAN 3.75% 4/15/99 $ 3,457,700 $ 3,459,669
Bethlehem Township Gen. Oblig. BAN 3.75% 9/21/99 2,750,000 2,756,619
Bloomfield Township Gen. Oblig. BAN 3.8% 6/1/99 4,200,000 4,200,399
Burlington County Gen. Oblig. BAN 3.75% 4/22/99 2,500,000 2,500,936
Camden County Impt. Auth. Rev.:
(Jewish Cmnty. Ctr. Proj.) Series 1995, 3.1%, LOC Nat'l. 1,100,000 1,100,000
Westminster Bank PLC, VRDN (a)
(Parkview Redev. Hsg. Proj.) 3.15%, LOC Gen. Elec. Cap. 6,800,000 6,800,000
Corp., VRDN (a)(d)
Chatham Township Gen. Oblig. BAN 3.75% 2/18/99 3,550,000 3,551,178
Cranford Township Gen. Oblig. BAN 3.76% 3/19/99 2,912,007 2,913,666
Dover Gen. Oblig. BAN 4% 7/16/99 3,514,950 3,523,389
East Brunswick Township Gen. Oblig. BAN:
3.75% 4/13/99 8,152,000 8,154,233
4% 7/28/99 4,000,000 4,009,849
Englewood Gen. Oblig. BAN 4% 7/16/99 2,548,500 2,554,618
Gloucester County Poll. Cont. Fing. Auth. Rev. Rfdg. 2,670,000 2,670,000
(Monsanto Co. Proj.) Series 1992, 3.1%, VRDN (a)
Hopatcong Gen. Oblig. BAN 4% 6/11/99 3,500,000 3,504,246
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled Govt. 24,960,000 24,960,000
Ln. Prog.) Series 1986, 3.1%, LOC Comerica Bank, Detroit,
VRDN (a)
Jefferson Township Gen. Oblig. BAN Series 1998 A, 4% 3,663,650 3,666,902
2/19/99
Mercer County Impt. Auth. Rev. (Atlantic & Johnson Proj.) 11,000,000 11,000,000
Series 1998, 3.3% (MBIA Insured), VRDN (a)
Middlesex County Gen. Oblig. BAN 4% 1/26/99 19,027,000 19,041,100
Monroe Township Gen. Oblig. BAN 4% 7/28/99 3,100,000 3,107,043
Montclair Township Gen. Oblig. BAN 4% 1/22/99 3,981,000 3,983,297
Moorestown Township Gen. Oblig. BAN 3.75% 6/4/99 3,000,000 3,003,863
Morristown Gen. Oblig. BAN 4% 5/4/99 6,350,000 6,355,158
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.:
(Arden Group) Series 1989 BB, 3.2%, LOC PNC Bank NA, 1,400,000 1,400,000
VRDN (a)(d)
(Block Drug Corp.) Series A, 3.2%, LOC SunTrust Bank of 715,000 715,000
Atlanta, VRDN (a)
(Casa DiBertacchi Corp. Facilities) Series 1988, 3.35%, LOC 400,000 400,000
Marine Midland Bank NA, VRDN (a)(d)
(Composite Issue) Series 1989 B, 3.2%, LOC PNC Bank NA, 50,000 50,000
VRDN (a)(d)
(Ctr. for Aging Applewood Proj.) Series 1989, 3.43%, LOC 2,125,000 2,125,000
Fleet Nat'l. Bank, VRDN (a)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.: - continued
(Dial Realty) Series 1988 L, 3.2%, LOC PNC Bank NA, $ 2,000,000 $ 2,000,000
VRDN (a)(d)
(Guttenplan's Bakery) Series 1989 G, 3.2%, LOC PNC Bank 1,750,000 1,750,000
NA, VRDN (a)(d)
(Headquarters Proj.) Series 1997, 3.15%, LOC PNC Bank 2,700,000 2,700,000
NA, VRDN (a)
(Herzel Mor Corp.) Series 1989 L, 3.2%, LOC PNC Bank 400,000 400,000
NA, VRDN (a)(d)
(Pictorial Offset Corp.) Series 1989 H, 3.2%, LOC PNC Bank 400,000 400,000
NA, VRDN (a)(d)
(PVC Container Corp.) Series 1987 D, 3.2%, LOC Nat'l. 1,865,000 1,865,000
Westminster Bank PLC, VRDN (a)(d)
(Recycle, Inc. Proj.) Series 1995, 3.2%, LOC Fleet Bank NA, 4,300,000 4,300,000
VRDN (a)(d)
Rfdg. (RJB Associates Proj.) Series 1983, 3.15%, LOC PNC 300,000 300,000
Bank NA, VRDN (a)
New Jersey Econ. Dev. Auth. Ind. Dev. Rev. (Nat'l. Refrigerant) 650,000 650,000
Series 1994 A, 3.2%, LOC First Union Nat'l. Bank of North
Carolina, VRDN (a)(d)
New Jersey Econ. Dev. Auth. Rev.:
(500 Int'l. Drive Partners Proj.) Series 1995, 3.1%, LOC First 3,000,000 3,000,000
Union Nat'l. Bank of North Carolina, VRDN (a)
(Bayshore Health Ctr.) Series 1998 A, 3.25%, LOC 4,655,000 4,655,000
Kredietbank NV, VRDN (a)
(E.P. Henry Corp. Proj.) 3.05%, LOC First Union Nat'l. Bank 870,000 870,000
of North Carolina, VRDN (a)(d)
(Eastern Silk) 2nd Series D2, 3.15%, LOC Banque Nationale 1,250,000 1,250,000
de Paris, VRDN (a)(d)
(Jewish Home Rockleigh Proj.) Series B, 3.3%, LOC PNC 7,000,000 7,000,000
Bank NA, VRDN (a)
(Peddie School Proj.) 3.15% (BPA PNC Bank NA), VRDN (a) 500,000 500,000
Bonds:
(Chambers Cogeneration Ltd. Proj.) Series 1991:
2.8% 3/8/99, LOC Cr. Local de France, CP mode (d) 3,900,000 3,900,000
2.85% 3/8/99, LOC Cr. Local de France, CP mode (d) 8,300,000 8,300,000
(Keystone Proj.) Series 1992:
2.85% 3/8/99, LOC Union Bank of Switzerland AG, 1,500,000 1,500,000
CP mode (d)
2.95% 3/9/99, LOC Union Bank of Switzerland AG, 1,500,000 1,500,000
CP mode (d)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Wtr. Facilities Rev. Participating
VRDN:
Series FR/RI 34, 3.5% (Liquidity Facility Bank of New York $ 8,415,000 $ 8,415,000
NA) (a)(d)(e)
Series FR/RI 35, 3.5% (Liquidity Facility Bank of New York 1,500,000 1,500,000
NA) (a)(d)(e)
New Jersey Gen. Oblig.:
Participating VRDN Series 1997 L, 3.3% (Liquidity Facility 7,000,000 7,000,000
Caisse des Depots et Consignations) (a)(e)
3.05% 3/9/99 (Liquidity Facility Bank of Nova Scotia) 6,900,000 6,900,000
(Liquidity Facility Commerzbank AG), CP
3.05% 3/17/99 (Liquidity Facility Bank of Nova Scotia) 5,200,000 5,200,000
(Liquidity Facility Commerzbank AG), CP
3.15% 3/12/99 (Liquidity Facility Bank of Nova Scotia) 14,400,000 14,400,000
(Liquidity Facility Commerzbank AG), CP
3.35% 2/9/99 (Liquidity Facility Bank of Nova Scotia) 13,600,000 13,600,000
(Liquidity Facility Commerzbank AG), CP
3.35% 4/6/99 (Liquidity Facility Bank of Nova Scotia) 4,900,000 4,900,000
(Liquidity Facility Commerzbank AG), CP
New Jersey Higher Ed. Assistance Auth. Student Ln. Rev. Bonds 2,800,000 2,800,000
(New Jersey Class Ln. Prog.) Series 1997 B, 3.75%, tender
6/1/99 (MBIA Insured) (BPA Landesbank
Hessen-Thuringen) (d)
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN 7,595,000 7,595,000
Series 94C3003, 3.33% (Liquidity Facility Citibank,
New York NA) (a)(d)(e)
New Jersey Hsg. & Mtg. Fin. Agcy. Rev. Participating VRDN:
Series PA 117, 3.35% (Liquidity Facility Merrill Lynch & 4,505,000 4,505,000
Co.) (a)(d)(e)
Series PT 118, 3.35% (Liquidity Facility Banco Santander 29,215,000 29,215,000
SA) (a)(d)(e)
Series PT 92, 3.35% (Liquidity Facility Merrill Lynch & 7,260,000 7,260,000
Co.) (a)(d)(e)
New Jersey Sport and Exposition Auth. Rev. Series 1992 C, 10,990,000 10,990,000
3.15% (MBIA Insured) (BPA Cr. Suisse First Boston (BK)),
VRDN (a)
New Jersey Tpk. Auth. Tpk. Rev. Participating VRDN 8,600,000 8,600,000
Series PA 440, 3.3% (Liquidity Facility Merrill Lynch &
Co.) (a)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Trans. Trust Fund Auth. Trans. Sys. Participating
VRDN:
Series FR/RI A21, 3.4% (Liquidity Facility Nat'l. Westminster $ 2,150,000 $ 2,150,000
Bank PLC) (a)(e)
Series PA 330, 3.3% (Liquidity Facility Merrill Lynch & 1,340,000 1,340,000
Co.) (a)(e)
Ocean County Util. Auth. Wastewtr. Rev. Rfdg. Bonds 2,675,000 2,678,181
Series 1997, 5% 1/1/99
Old Bridge Township Gen. Oblig. BAN 3.25% 10/20/99 3,000,000 3,005,425
Passaic County Gen. Oblig. BAN 4% 4/2/99, 10,500,000 10,513,389
LOC State Street Bank & Trust Co.
Rahway Gen. Oblig. BAN 3.75% 10/8/99 3,202,000 3,215,450
Salem County Ind. Poll. Cont. Fing. Auth. Rev. Participating 3,760,000 3,760,000
VRDN Series PA 357, 3.3% (Liquidity Facility Merrill
Lynch & Co.) (a)(e)
South Plainfield Gen. Oblig. BAN 4% 7/20/99 4,500,000 4,509,881
Union County Gen. Oblig. BAN 3.63% 7/14/99 2,860,000 2,860,494
Union County Util. Auth. Solid Waste Facilities Lease Rev. 6,200,000 6,200,000
Participating VRDN Series FR/RI 38, 3.5% (Liquidity Facility
Bank of New York NA) (a)(d)(e)
Verona Gen. Oblig. BAN 3.25% 4/12/99 4,644,000 4,650,171
Wall Township Gen. Oblig. BAN Series B, 4% 6/24/99 2,900,000 2,904,704
Washington Township Gloucester County Gen. Oblig. BAN 3,236,429 3,237,971
4.1% 1/15/99
West Milford Township Gen. Oblig. BAN Series B, 4% 2,298,000 2,299,326
1/22/99
West Windsor Plains Reg. School District BAN 4% 1/27/99 10,100,000 10,106,231
Woodbridge Township Gen. Oblig. BAN 4% 7/30/99 11,000,000 11,026,656
385,684,044
NEW YORK & NEW JERSEY - 19.3%
Port Auth. New York & New Jersey Gen. Oblig.:
Participating VRDN:
Series FR/RI 3, 3.5% (Liquidity Facility Bank of New York 2,100,000 2,100,000
NA) (a)(d)(e)
Series PT 1077 3.58% (Liquidity Facility Bank of America 5,300,000 5,300,000
Nat'l. Trust & Savings Assoc.) (a)(e)
Series PT 232, 3.62% (Liquidity Facility Commerzbank 3,925,000 3,925,000
AG) (a)(d)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
Port Auth. New York & New Jersey Gen. Oblig.: - continued
Series 1991, 3.4%, VRDN (a)(d)(f) $ 6,400,000 $ 6,400,000
Series 1992, 3.275%, VRDN (a)(f) 6,900,000 6,900,000
Series 1995 1, 3.15%, VRDN (a) 5,000,000 5,000,000
Series 1995, 3.275%, VRDN (a)(d)(f) 10,500,000 10,500,000
Series 1996 3, 3.15%, VRDN (a) 5,000,000 5,000,000
Series 1997 2, 3.275%, VRDN (a)(f) 10,400,000 10,400,000
Series 1997 B, 3.15%, VRDN (a) 3,200,000 3,200,000
Port Auth. New York & New Jersey Spl. Oblig. Rev.:
Participating VRDN:
Series 6:
3.35% (Liquidity Facility Societe Generale) (a)(d)(e) 3,655,000 3,655,000
3.35% (Liquidity Facility Societe Generale) (a)(d)(e) 17,300,000 17,300,000
Series FR/RI 16, 3.5% (Liquidity Facility Bank of New York 5,600,000 5,600,000
NA) (a)(d)(e)
Series SG 117, 3.35% (Liquidity Facility Societe 6,900,000 6,900,000
Generale) (a)(d)(e)
Series 1R, 3.45%, VRDN (a)(d) 1,200,000 1,200,000
Series 4, 3.35% (BPA Landesbank Hessen-Thuringen), 4,700,000 4,700,000
VRDN (a)(d)
Series 6, 3.35%, VRDN (a)(d) 3,400,000 3,400,000
101,480,000
SHARES
OTHER - 7.1%
Municipal Central Cash Fund (b)(c) 37,159,919 37,159,919
TOTAL INVESTMENT IN SECURITIES - 100% $ 524,323,963
Total Cost for Income Tax Purposes $ 524,323,963
</TABLE>
SECURITY TYPE ABBREVIATIONS
BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Information in this report regarding holdings by state and
security types does 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.
(c) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.31%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
(f) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISTION COST
DATE
Port Auth. New York & 6/18/91 $ 6,400,000
New Jersey Gen.
Oblig. VRDN:
Series 1991, 3.4%
Series 1992, 3.275% 2/14/92 $ 6,900,000
Series 1995, 3.275% 9/15/95 $ 10,500,000
Series 1997 2, 3.275% 9/15/97 $ 10,400,000
OTHER INFORMATION
The fund invested in securities that were not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $34,200,000
or 6.5% of net assets (see Note 2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $70,000 of which $23,000, $16,000, $2,000 and $29,000
will expire on November 30, 2000, 2002, 2003 and 2004, respectively.
During fiscal year ended 1998, 100% of the fund's income dividends
were free from federal income tax, and 32.68% of the fund's income
dividends were subject to the federal alternative minimum tax.
(Unaudited)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
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<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at value - $ 524,323,963
See accompanying schedule
Receivable for fund shares sold 990,847
Interest receivable 5,208,534
TOTAL ASSETS 530,523,344
LIABILITIES
Payable for fund shares redeemed $ 1,747,042
Distributions payable 65,816
Accrued management fee 217,590
Other payables and accrued expenses 3,366
TOTAL LIABILITIES 2,033,814
NET ASSETS $ 528,489,530
Net Assets consist of:
Paid in capital $ 528,559,952
Accumulated net realized gain (loss) on investments (70,422)
NET ASSETS, for 528,532,757 shares outstanding $ 528,489,530
NET ASSET VALUE, offering price and redemption price per $1.00
share ($528,489,530 (divided by) 528,532,757 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 18,290,052
EXPENSES
Management fee $ 2,596,444
Non-interested trustees' compensation 1,960
Total expenses before reductions 2,598,404
Expense reductions (12,578) 2,585,826
NET INTEREST INCOME 15,704,226
NET REALIZED GAIN (LOSS) ON INVESTMENTS 672
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,704,898
OTHER INFORMATION
Expense reductions $ 1,360
Custodian credits
Transfer agent credits 11,218
$ 12,578
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED ONE MONTH ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, OCTOBER 31,
1998 1997 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 15,704,226 $ 1,403,965 $ 16,638,749
Net interest income
Net realized gain (loss) 672 - (28,856)
Increase (decrease) in - - (31)
net unrealized gain from
accretion of discount
NET INCREASE (DECREASE) IN NET ASSETS 15,704,898 1,403,965 16,609,862
RESULTING FROM OPERATIONS
Distributions to shareholders from net (15,704,226) (1,403,965) (16,638,749)
interest income
Share transactions at net asset value of 474,746,691 37,088,585 572,748,800
$1.00 per share
Proceeds from sales of shares
Reinvestment of distributions from net 15,281,562 1,377,406 16,278,251
interest income
Cost of shares redeemed (485,904,369) (34,651,925) (573,322,288)
NET INCREASE (DECREASE) IN NET 4,123,884 3,814,066 15,704,763
ASSETS AND SHARES RESULTING FROM
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN 4,124,556 3,814,066 15,675,876
NET ASSETS
NET ASSETS
Beginning of period 524,364,974 520,550,908 504,875,032
End of period $ 528,489,530 $ 524,364,974 $ 520,550,908
</TABLE>
<TABLE>
<CAPTION>
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FINANCIAL HIGHLIGHTS
YEAR ENDED ONE MONTH YEARS ENDED OCTOBER 31,
NOVEMBER 30, ENDED
NOVEMBER 30,
1998 1997 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from Investment .030 .003 .032 .032 .036 .024
Operations
Net interest income
Less Distributions
From net interest (.030) (.003) (.032) (.032) (.036) (.024)
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B, C 3.06% .27% 3.22% 3.24% 3.65% 2.45%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 528,490 $ 524,365 $ 520,551 $ 504,875 $ 469,834 $ 395,935
period (000 omitted)
Ratio of expenses to .50% .50% A .40% D .35% D .31% D .28% D
average net assets
Ratio of expenses to .50% .50% A .40% .34% E .31% .28%
average net assets
after expense
reductions
Ratio of net interest 3.02% 3.28% A 3.15% 3.20% 3.59% 2.44%
income to average
net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the past 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY NJ MUNICIPAL MONEY MARKET 2.93% 15.25% 41.76%
New Jersey Tax-Free Money Market 2.81% 15.18% 42.99%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or ten
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the New Jersey tax-free money market
funds average, which reflects the performance of municipal money
market funds with similar objectives tracked by IBC Financial Data,
Inc. The past one year average represents a peer group of 15 money
market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY NJ MUNICIPAL MONEY MARKET 2.93% 2.88% 3.55%
New Jersey Tax-Free Money Market 2.81% 2.85% 3.57%
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
11/30/98 8/31/98 6/1/98 3/2/98 12/1/97
Fidelity New Jersey Municipal 2.72% 2.82% 3.17% 2.79% 3.24%
Money Market Fund
New Jersey Tax-Free 2.51% 2.57% 2.99% 2.66% 3.06%
Money Market Funds
Average
Fidelity New Jersey Municipal 4.54% 4.71% 5.29% 4.66% 5.41%
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 New
Jersey 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 1998 federal and state income tax
rate of 40.08%. A portion of the fund's income may be subject to the
federal alternative minimum tax.
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 would
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)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Fidelity New Jersey
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE PAST 12
MONTHS?
A. It was a very interesting period, marked by volatility in global
markets from the summer of 1998 through the end of the fund's fiscal
year, November 30, 1998. During this time, the Federal Reserve Board
lowered the rate banks charge each other for overnight loans - known
as the fed funds rate - three times. Each move consisted of an
"easing" of 0.25 percentage points; the fed funds rate fell from 5.50%
to 4.75%. These significant moves were unanticipated early in the
summer given the investment climate of the first eight months of the
reporting period. During that span, market sentiment reflected an
expectation of a fed "tightening," or raising of short-term interest
rates to slow the economy and guard against inflation. Although
inflation had been generally non-existent, signs such as a very low
unemployment rate and sustained economic growth pointed to the
potential for the build-up of inflationary pressures. International
problems, especially in Asia, helped dampen economic growth enough to
keep the Fed on the sidelines - leaving interest rates unchanged -
through the second quarter of 1998. However, the problems in global
markets intensified starting in August.
Q. WHAT HAPPENED IN AUGUST TO CHANGE THE BACKDROP?
A. Russia defaulted on some of its outstanding debt and the value of
its currency, the ruble, plummeted, sparking concerns that currency
devaluations would take place in other emerging market countries, such
as those in Latin America. Global stock markets went into a freefall,
and investors worldwide flocked to U.S. Treasuries in pursuit of a
haven safe enough to withstand this turmoil. Further problems arose in
early fall when rumors of the potential collapse of certain hedge
funds hit the market. Market sentiment quickly swung to an
anticipation of Fed rate cuts. The Fed followed through with 0.25
percentage point decreases at the end of September, in a surprise move
on October 15 between meetings of its Open Market Committee, and again
on November 17. These moves were an attempt to bring stability back to
world markets, and appear to have succeeded.
Q. WHAT STRATEGY DID YOU PURSUE WITH THE FUND WHILE THIS TRANSPIRED?
A. Given the uncertainty of the markets, I maintained a relatively
neutral stance with the fund's average maturity, recognizing that the
interest-rate picture was changing in the late summer and early fall.
Compared to its competitors, the fund's average maturity was generally
a bit longer throughout the period. That stance was due to market
conditions I've discussed in the past. Specifically, one-year
fixed-rate securities in the New Jersey market usually offer a yield
advantage over shorter-term variable-rate notes, because strong demand
for the latter makes it easier for their issuers to offer the debt at
lower rates. In addition, I turned some of my focus - within the
limits set by the fund's prospectus - to out-of-state investment
opportunities that offered more appealing after-tax yields than
tax-free alternatives in the New Jersey market. Even though more of
shareholders' income from the fund will be taxable at the state level
this year because of the out-of-state investments, this strategy was
pursued so the fund could provide higher yields on a tax-adjusted
basis than if I had chosen to invest the same assets in lower-yielding
tax-exempt New Jersey securities instead.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1998, was 2.72%,
compared to 3.24% 12 months ago. The more recent seven-day yield was
the equivalent of a 4.54% taxable rate of return for New Jersey
investors in the 40.08% combined state and federal income tax bracket.
Through November 30, 1998, the fund's 12-month total return was 2.93%,
compared to 2.81% for the New Jersey tax-free money market funds
average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The market reflects uncertainty over the direction of the Fed's
interest-rate policy. After three rate cuts, it appears that the Fed
wants to wait and see what effect its moves will have on the economy.
Typically, there is at least a six-month lag before the Fed's moves
start to influence the economy. Inflation remains tame, but
unemployment is low - often a harbinger of inflation as increased
labor costs are passed on to the consumer - and the economy has shown
signs of continued growth. While the Fed has gone a long way toward
addressing its concerns about the global markets, it appears poised to
lower rates further if some U.S. economic weakness develops or if
global turmoil resurfaces. However, it would be a surprise to most
market observers if the Fed did so before its Open Market Committee
meeting in February 1999.
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 NOVEMBER 30,
1998, MORE THAN $590 MILLION
MANAGER: SCOTT ORR, SINCE
1997; MANAGER, VARIOUS FIDELITY
AND SPARTAN MONEY MARKET
FUNDS: JOINED FIDELITY IN 1989
(CHECKMARK)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND'S % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS INVESTMENTS
11/30/98 5/31/98 11/30/97
0 - 30 63 71 67
31 - 90 11 6 15
91 - 180 16 7 9
181 - 397 10 16 9
WEIGHTED AVERAGE MATURITY
11/30/98 5/31/98 11/30/97
Fidelity New Jersey Municipal 56 DAYS 62 Days 50 Days
Money Market Fund
New Jersey Tax-Free Money 56 DAYS 50 Days 51 Days
Market Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1998 AS OF MAY 31, 1998
Row: 1, Col: 1, Value: 53.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 25.0
Row: 1, Col: 4, Value: 10.0
Variable rate demand
notes (VRDNs) 56%
Commercial paper
(including CP mode) 16%
Municipal notes 27%
Other 1%
Variable rate demand
notes (VRDNs) 53%
Commercial paper
(including CP mode) 12%
Municipal notes 25%
Other 10%
Row: 1, Col: 1, Value: 55.5
Row: 1, Col: 2, Value: 16.0
Row: 1, Col: 3, Value: 27.0
Row: 1, Col: 4, Value: 1.5
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - 72.2%
Bernardsville Gen. Oblig. BAN 3.75% 4/15/99 $ 3,500,000 $ 3,501,994
Bethlehem Township Gen. Oblig. BAN 3.75% 9/21/99 2,760,000 2,766,643
Bloomfield Township Gen. Oblig. BAN 3.8% 6/1/99 4,300,000 4,300,409
Burlington County Gen. Oblig. BAN 3.75% 4/22/99 2,500,000 2,500,936
Camden County Impt. Auth. Rev.:
(Jewish Cmnty. Ctr. Proj.) Series 1995, 3.1%, LOC Nat'l. 2,200,000 2,200,000
Westminster Bank PLC, VRDN (a)
(Parkview Redev. Hsg. Proj.) 3.15%, LOC Gen. Elec. Cap. 6,000,000 6,000,000
Corp., VRDN (a)(d)
Chatham Township Gen. Oblig. BAN 3.75% 2/18/99 3,585,350 3,586,540
Cranford Township Gen. Oblig. BAN 3.76% 3/19/99 2,850,000 2,851,624
Dover Gen. Oblig. BAN 4% 7/16/99 3,600,000 3,608,643
East Brunswick Township Gen. Oblig. BAN:
3.75% 4/13/99 8,200,000 8,202,246
4% 7/28/99 4,000,000 4,009,849
Englewood Gen. Oblig. BAN 4% 7/16/99 2,600,000 2,606,242
Gloucester County Poll. Cont. Fing. Auth. Rev. Rfdg. (Monsanto 2,800,000 2,800,000
Co. Proj.) Series 1992, 3.1%, VRDN (a)
Hopatcong Gen. Oblig. BAN 4% 6/11/99 3,500,000 3,504,246
Hudson County Impt. Auth. Rev. (Essential Purp. Pooled Govt. 28,795,000 28,795,000
Ln. Prog.) Series 1986, 3.1%, LOC Comerica Bank, Detroit,
VRDN (a)
Jefferson Township Gen. Oblig. BAN Series 1998 A, 4% 3,663,650 3,666,902
2/19/99
Mercer County Impt. Auth. Rev. (Atlantic & Johnson Proj.) 16,000,000 16,000,000
Series 1998, 3.3% (MBIA Insured), VRDN (a)
Middlesex County Gen. Oblig. BAN 4% 1/26/99 18,608,095 18,621,884
Monroe Township Gen. Oblig. BAN 4% 7/28/99 3,182,206 3,189,435
Montclair Township Gen. Oblig. BAN 4% 1/22/99 3,883,000 3,885,240
Moorestown Township Gen. Oblig. BAN 3.75% 6/4/99 3,000,000 3,003,863
Morristown Gen. Oblig. BAN 4% 5/4/99 6,350,000 6,355,158
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.:
(Casa DiBertacchi Corp. Facilities) Series 1988, 3.35%, LOC 600,000 600,000
Marine Midland Bank NA, VRDN (a)(d)
(Ctr. for Aging Applewood Proj.) Series 1989, 3.43%, LOC 2,275,000 2,275,000
Fleet Nat'l. Bank, VRDN (a)
(Headquarters Proj.) Series 1997, 3.15%, LOC PNC Bank 2,500,000 2,500,000
NA, VRDN (a)
(PVC Container Corp.) Series 1987 D, 3.2%, LOC Nat'l. 1,035,000 1,035,000
Westminster Bank PLC, VRDN (a)(d)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.: - continued
Rfdg. (RJB Associates Proj.) Series 1983, 3.15%, LOC PNC $ 500,000 $ 500,000
Bank NA, VRDN (a)
New Jersey Econ. Dev. Auth. Rev.:
(500 Int'l. Drive Partners Proj.) Series 1995, 3.1%, LOC First 2,800,000 2,800,000
Union Nat'l. Bank of North Carolina, VRDN (a)
(Bayshore Health Ctr.) Series 1998 A, 3.25%, LOC 4,600,000 4,600,000
Kredietbank NV, VRDN (a)
(Jewish Home Rockleigh Proj.) Series B, 3.3%, LOC PNC 7,430,000 7,430,000
Bank NA, VRDN (a)
(Peddie School Proj.) 3.15% (BPA PNC Bank NA), VRDN (a) 500,000 500,000
Bonds:
(Chambers Cogeneration Ltd. Proj.) Series 1991:
2.8% 3/8/99, LOC Cr. Local de France, CP mode (d) 4,300,000 4,300,000
2.85% 2/16/99, LOC Cr. Local de France, CP mode (d) 3,600,000 3,600,000
2.85% 3/8/99, LOC Cr. Local de France, CP mode (d) 8,500,000 8,500,000
(Keystone Proj.) Series 1992:
2.85% 3/8/99, LOC Union Bank of Switzerland AG, 1,500,000 1,500,000
CP mode (d)
2.95% 3/9/99, LOC Union Bank of Switzerland AG, 1,600,000 1,600,000
CP mode (d)
3% 3/8/99, LOC Union Bank of Switzerland AG, CP 1,000,000 1,000,000
mode (d)
New Jersey Econ. Dev. Auth. Wtr. Facilities Rev. Participating 10,000,000 10,000,000
VRDN Series FR/RI 35, 3.5% (Liquidity Facility Bank of New
York NA) (a)(d)(e)
New Jersey Edl. Dev. Auth. Poll. Cont. (Hoffman- Roche Proj.) 3,000,000 3,000,000
Series 1985, 3.1%, LOC Wachovia Bank NA, VRDN (a)
New Jersey Gen. Oblig.:
Participating VRDN:
Series 1997 L, 3.3% (Liquidity Facility Caisse des Depots et 8,100,000 8,100,000
Consignations) (a)(e)
Series FR/RI-A8, 3.45% (Liquidity Facility Bayerische 1,100,000 1,100,000
Hypo-und Vereinsbank AG) (a)(e)
Series PA 340, 3.3% (Liquidity Facility Merrill 8,495,000 8,495,000
Lynch & Co.) (a)(e)
3.05% 3/9/99 (Liquidity Facility Bank of Nova Scotia) 7,500,000 7,500,000
(Liquidity Facility Commerzbank AG), CP
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Gen. Oblig.: - continued
3.05% 3/17/99 (Liquidity Facility Bank of Nova Scotia) $ 5,600,000 $ 5,600,000
(Liquidity Facility Commerzbank AG), CP
3.15% 3/12/99 (Liquidity Facility Bank of Nova Scotia) 15,600,000 15,600,000
(Liquidity Facility Commerzbank AG), CP
3.35% 2/9/99 (Liquidity Facility Bank of Nova Scotia) 14,400,000 14,400,000
(Liquidity Facility Commerzbank AG), CP
3.35% 4/6/99 (Liquidity Facility Bank of Nova Scotia) 5,100,000 5,100,000
(Liquidity Facility Commerzbank AG), CP
New Jersey Higher Ed. Assistance Auth. Student Ln. Rev. Bonds 2,600,000 2,600,000
(New Jersey Class Ln. Prog.) Series 1997 B, 3.75%, tender
6/1/99 (MBIA Insured) (BPA Landesbank
Hessen-Thuringen) (d)
New Jersey Hsg. & Mtg. Fin. Agcy. Participating VRDN Series 6,800,000 6,800,000
94C3003, 3.33% (Liquidity Facility Citibank, New York
NA) (a)(d)(e)
New Jersey Hsg. & Mtg. Fin. Agcy. Rev. Participating VRDN:
Series PA 117, 3.35% (Liquidity Facility Merrill 4,020,000 4,020,000
Lynch & Co.) (a)(d)(e)
Series PT 118, 3.35% (Liquidity Facility Banco Santander 23,430,000 23,430,000
SA) (a)(d)(e)
Series PT 92, 3.35% (Liquidity Facility Merrill 11,005,000 11,005,000
Lynch & Co.) (a)(d)(e)
Series PT-80, 3.3% (Liquidity Facility Rabobank Nederland 8,500,000 8,500,000
Coop. Central) (a)(e)
New Jersey Sport and Exposition Auth. Rev. Series 1992 C, 18,275,000 18,275,000
3.15% (MBIA Insured) (BPA Cr. Suisse First Boston (BK)),
VRDN (a)
New Jersey Tpk. Auth. Tpk. Rev. Participating VRDN 9,200,000 9,200,000
Series PA 440, 3.3% (Liquidity Facility Merrill Lynch & Co.) (a)(e)
New Jersey Trans. Trust Fund Auth. Trans. Sys. Participating 1,340,000 1,340,000
VRDN Series PA 330, 3.3% (Liquidity Facility Merrill
Lynch & Co.) (a)(e)
North Brunswick Township BAN:
4% 12/30/98 1,250,000 1,250,291
4% 8/27/99 2,920,000 2,928,308
Ocean County Util. Auth. Wastewtr. Rev. Rfdg. 2,600,000 2,603,092
Bonds Series 1997, 5% 1/1/99
Old Bridge Township BAN 3.25% 10/20/99 3,400,000 3,406,149
Passaic County Gen. Oblig. BAN 4% 4/2/99, LOC State 10,500,000 10,513,389
Street Bank & Trust Co.
Rahway Gen. Oblig. BAN 3.75% 10/8/99 3,500,000 3,514,702
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Salem County Ind. Poll. Cont. Fing. Auth. Rev. Participating $ 3,900,000 $ 3,900,000
VRDN Series PA 357, 3.3% (Liquidity Facility Merrill Lynch &
Co.) (a)(e)
South Plainfield Gen. Oblig. BAN 4% 7/20/99 4,400,000 4,409,661
Union County Gen. Oblig. BAN 3.63% 7/14/99 2,900,000 2,900,501
Union County Util. Auth. Solid Waste Facilities Lease Rev. 6,260,000 6,260,000
Participating VRDN Series FR/RI 38, 3.5% (Liquidity Facility
Bank of New York NA) (a)(d)(e)
Verona Gen. Oblig. BAN 3.25% 4/12/99 5,300,000 5,307,042
Wall Township Gen. Oblig. BAN Series B, 4% 6/24/99 3,000,000 3,004,866
Washington Township Gloucester County Gen. Oblig. BAN 3,250,000 3,251,548
4.1% 1/15/99
West Milford Township Gen. Oblig. BAN Series B, 4% 2,100,000 2,101,212
1/22/99
West Windsor Plains Reg. School District BAN 4% 1/27/99 9,900,000 9,906,108
Woodbridge Township Gen. Oblig. BAN 4% 7/30/99 11,068,950 11,095,773
419,114,496
NEW YORK & NEW JERSEY - 18.2%
Port Auth. New York & New Jersey Gen. Oblig.:
Participating VRDN:
Series FR/RI 3, 3.5% (Liquidity Facility Bank of New York 1,900,000 1,900,000
NA) (a)(d)(e)
Series GS 52, 3.35% (Liquidity Facility Societe 4,600,000 4,600,000
Generale) (a)(d)(e)
Series PT 1077 3.58% (Liquidity Facility Bank of America 5,900,000 5,900,000
Nat'l. Trust & Savings Assoc.) (a)(e)
Series PT 232, 3.62% (Liquidity Facility Commerzbank 4,200,000 4,200,000
AG) (a)(d)(e)
Series 1991, 3.4%, VRDN (a)(d)(f) 8,800,000 8,800,000
Series 1992, 3.275%, VRDN (a)(f) 6,800,000 6,800,000
Series 1995, 3.275%, VRDN (a)(d)(f) 9,400,000 9,400,000
Series 1996 2, 3.25%, VRDN (a)(d) 3,500,000 3,500,000
Series 1997 1, 3.275%, VRDN (a)(f) 8,900,000 8,900,000
Series 1997, 3.15%, VRDN (a) 2,800,000 2,800,000
Port Auth. New York & New Jersey Spl. Oblig. Rev.:
Participating VRDN:
Series 6, 3.35% (Liquidity Facility Societe 18,000,000 18,000,000
Generale) (a)(d)(e)
Series FR/RI 16, 3.5% (Liquidity Facility Bank of New York 5,200,000 5,200,000
NA) (a)(d)(e)
MUNICIPAL SECURITIES - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
Port Auth. New York & New Jersey Spl. Oblig. Rev.:
Participating VRDN: - continued
Series SG 117, 3.35% (Liquidity Facility Societe $ 6,400,000 $ 6,400,000
Generale) (a)(d)(e)
Series 1R, 3.45%, VRDN (a)(d) 4,700,000 4,700,000
Series 4, 3.35% (BPA Landesbank Hessen-Thuringen), 5,200,000 5,200,000
VRDN (a)(d)
Series 6, 3.35%, VRDN (a)(d) 9,200,000 9,200,000
105,500,000
SHARES
OTHER - 9.6%
Municipal Central Cash Fund (b)(c) 55,429,703 55,429,703
TOTAL INVESTMENT IN SECURITIES - 100% $ 580,044,199
Total Cost for Income Tax Purposes $ 580,044,199
</TABLE>
SECURITY TYPE ABBREVIATIONS
BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Information in this report regarding holdings by state and
security types does 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.
(c) At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.31%. The yield refers to the income earned by
investing in the fund over the seven-day period, expressed as an
annual percentage.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
(f) Restricted securities - Investment in securities not registered
under the Securities Act of 1933 (see Note 2 of Notes to Financial
Statements).
SECURITY ACQUISTION COST
DATE
Port Auth. New York & 6/18/91 $ 8,800,000
New Jersey Gen.
Oblig. VRDN:
Series 1991, 3.4%
Series 1992, 3.275% 2/14/92 $ 6,800,000
Series 1995, 3.275% 9/15/95 $ 9,400,000
Series 1997 1, 3.275% 9/15/97 $ 8,900,000
OTHER INFORMATION
The fund invested in securities that were not registered under the
Securities Act of 1933. These securities are subject to legal or
contractual restrictions on resale. At the end of the period,
restricted securities (excluding 144A issues) amounted to $33,900,000
or 5.7% of net assets (see Note 2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1998, the fund had a capital loss carryforward of
approximately $41,000 of which $14,000 and $27,000 will expire on
November 30, 2003 and 2005, respectively.
During fiscal year ended 1998, 100% of the fund's income dividends
were free from federal income tax, and 30.09% of the fund's income
dividends were subject to the federal alternative minimum tax.
(Unaudited)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE - $ 580,044,199
SEE ACCOMPANYING SCHEDULE
CASH 45
RECEIVABLE FOR INVESTMENTS SOLD 2,021,731
RECEIVABLE FOR FUND SHARES SOLD 8,282,840
INTEREST RECEIVABLE 5,482,438
TOTAL ASSETS 595,831,253
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED $ 4,965,736
DISTRIBUTIONS PAYABLE 39,255
ACCRUED MANAGEMENT FEE 189,203
OTHER PAYABLES AND ACCRUED EXPENSES 146,945
TOTAL LIABILITIES 5,341,139
NET ASSETS $ 590,490,114
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 590,530,916
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (40,802)
NET ASSETS, FOR 590,530,979 SHARES OUTSTANDING $ 590,490,114
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $1.00
SHARE ($590,490,114 (DIVIDED BY) 590,530,979 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INTEREST INCOME $ 18,805,789
EXPENSES
MANAGEMENT FEE $ 2,073,638
TRANSFER AGENT FEES 913,972
ACCOUNTING FEES AND EXPENSES 102,736
NON-INTERESTED TRUSTEES' COMPENSATION 2,824
CUSTODIAN FEES AND EXPENSES 28,485
REGISTRATION FEES 46,871
AUDIT 26,012
LEGAL 11,100
REPORTS TO SHAREHOLDERS 14,808
MISCELLANEOUS 670
TOTAL EXPENSES BEFORE REDUCTIONS 3,221,116
EXPENSE REDUCTIONS (16,836) 3,204,280
NET INTEREST INCOME 15,601,509
NET REALIZED GAIN (LOSS) ON INVESTMENTS 14,434
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,615,943
OTHER INFORMATION
EXPENSE REDUCTION $ 696
CUSTODIAN CREDITS
TRANSFER AGENT CREDITS 16,140
$ 16,836
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 15,601,509 $ 13,730,894
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 14,434 (26,426)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 15,615,943 13,704,468
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (15,601,509) (13,730,894)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 1,801,008,658 1,381,762,190
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 15,168,608 13,414,508
COST OF SHARES REDEEMED (1,713,362,802) (1,330,712,880)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 102,814,464 64,463,818
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 102,828,898 64,437,392
NET ASSETS
BEGINNING OF PERIOD 487,661,216 423,223,824
END OF PERIOD $ 590,490,114 $ 487,661,216
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
BEGINNING OF PERIOD
INCOME FROM INVESTMENT .029 .030 .029 .033 .022
OPERATIONS
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.029) (.030) (.029) (.033) (.022)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 2.93% 3.03% 2.93% 3.33% 2.19%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 590,490 $ 487,661 $ 423,224 $ 434,709 $ 399,548
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .60% .61% .63% .62% .62%
NET ASSETS
RATIO OF EXPENSES TO AVERAGE .59% B .61% .61% B .62% .62%
NET ASSETS AFTER EXPENSE
REDUCTIONS
RATIO OF NET INTEREST INCOME TO 2.90% 2.98% 2.89% 3.28% 2.17%
AVERAGE NET ASSETS
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan New Jersey Municipal Income Fund (the income fund) is a fund
of Fidelity Court Street Trust. Spartan New Jersey Municipal Money
Market Fund and Fidelity New Jersey Municipal Money Market Fund (the
money market funds) are funds 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 require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the income fund and the money
market funds:
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 FUNDS. 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 funds, accretion of 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
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for market discount, futures transactions and losses
deferred due to futures. 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 interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the income fund
less than 180 days are subject to a short-term trading 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 Fidelity
Investments Money Management, Inc., 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
earned by the funds are recorded as interest income in the
accompanying financial statements.
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. Each fund may receive compensation for
interest forgone in the purchase of a when-issued security.
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
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.
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 or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
RESTRICTED SECURITIES. 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 $71,115,611 and $43,188,306, respectively.
The market value of futures contracts opened and closed during the
period amounted to $48,431,779 and $47,366,431, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the investment adviser for Fidelity New Jersey
Municipal Money Market Fund, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MANAGEMENT FEE - CONTINUED
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 annual rate of
.39% of average net assets for Fidelity New Jersey Municipal Money
Market Fund.
As Spartan New Jersey Municipal Income Fund's and Spartan New Jersey
Municipal Money Market 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 Spartan New
Jersey Municipal Income Fund and Spartan New Jersey Municipal Money
Market Fund, respectively.
FMR also bears the cost of providing shareholder services to Spartan
New Jersey Municipal Money Market Fund. To offset the cost of
providing these services, FMR
or its affiliates collected certain transaction fees from shareholders
which amounted to $5,329 for the period.
SUB-ADVISER FEE. As the money market funds' investment sub-adviser,
Fidelity Investments Money Management, 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 Fidelity
New Jersey Municipal Money Market 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
funds' 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, the transfer agent fees were equivalent to an rate of
.17% of average net assets for Fidelity New Jersey Municipal Money
Market Fund.
5. EXPENSE REDUCTIONS.
Fidelity New Jersey Municipal Money Market Fund and FMR (on behalf of
Spartan New Jersey Municipal Income Fund and Spartan New Jersey
Municipal Money Market Fund) have entered into arrangements with their
custodians and transfer agents whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of each
applicable fund's expenses.
For the period, the reductions under these arrangements are shown
under the caption "Other Information" on each applicable fund's
Statement of Operations.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court
Street Trust II and the Shareholders of Spartan New Jersey Municipal
Income Fund, Spartan New Jersey Municipal Money Market Fund and
Fidelity New Jersey Municipal Money Market Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan New Jersey Municipal Income Fund (a fund of Fidelity Court
Street Trust) and Spartan New Jersey Municipal Money Market Fund and
Fidelity New Jersey Municipal Money Market Fund (funds of Fidelity
Court Street Trust II) at November 30, 1998, the results of their
operations, the changes in their net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of each fund 's management; our responsibility
is to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at November 30, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 11, 1999
DISTRIBUTIONS
The Board of Trustees of Spartan New Jersey Municipal Income Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
PAY DATE 12/29/97 12/31/98
RECORD DATE 12/26/97 12/30/98
SHORT-TERM
CAPITAL GAINS $.025 $-
LONG-TERM
CAPITAL GAINS $.030 $.060
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 40.92% -
20% rate 59.08% 100%
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 Xpress(registered trademark) provides 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.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
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
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OVERNIGHT EXPRESS
Fidelity Investments
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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 500
Merrimack, NH 03054-0500
(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 500
Merrimack, NH 03054-0500
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INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning Jr., Vice President
Boyce I. Greer, Vice President
Dwight D. Churchill, Vice President
Norman U. Lind, Vice President
Scott A. Orr, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
NJN-ANN-0199 69048
1.539150.101
ADVISORY BOARD
J. Gary Burkhead
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
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