SPARTAN(REGISTERED TRADEMARK)
FLORIDA
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
MAY 31, 1999
CONTENTS
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.
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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:
After its first-ever close above 11,000 on the first trading day of
May, the Dow Jones Industrial Average dropped over 450 points by
month's end. The Federal Reserve Board's shift in bias toward raising
rates to ward off inflation contributed to the decline. Government
securities followed a similar path during May, as expectations of an
eventual boost in interest rates drove the price of the bellwether
30-year Treasury consistently downwards.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN FL MUNICIPAL INCOME 0.21% 3.92% 39.45% 70.05%
LB Florida Municipal Bond 0.64% 4.59% 41.70% n/a
Florida Municipal Debt Funds 0.09% 3.33% 36.66% n/a
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period
- - in this case, six months, one year, five years or since the fund
started on March 16, 1992. For example, if you had invested $1,000 in
a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Lehman Brothers Florida Municipal Bond Index - a
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 Inc. The
past six months average represents a peer group of 64 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN FL MUNICIPAL INCOME 3.92% 6.88% 7.64%
LB Florida Municipal Bond 4.59% 7.22% n/a
Florida Municipal Debt Funds 3.33% 6.44% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a 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
1998/12/31 16941.91 16475.81
1999/01/31 17137.87 16671.71
1999/02/28 17033.65 16598.85
1999/03/31 17039.19 16621.93
1999/04/30 17071.64 16663.31
1999/05/28 16928.43 16566.83
IMATRL PRASUN SHR__CHT 19990531 19990614 113609 R00000000000089
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Spartan Florida Municipal Income Fund on March 31, 1992,
shortly after the fund started. As the chart shows, by May 31, 1999,
the value of the investment would have grown to $16,928 - a 69.28%
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 $16,567 - a
65.67% 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
1999 1998 1997 1996 1995 1994
Dividend returns 2.20% 4.77% 5.00% 5.10% 6.31% 5.01%
Capital returns -1.99% 2.63% 1.69% 0.49% 14.78% -12.20%
Total returns 0.21% 7.40% 6.69% 5.59% 21.09% -7.19%
</TABLE>
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.
DIVIDENDS AND YIELD
PERIODS ENDED MAY 31, 1999 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.36(cents) 25.62(cents) 51.79(cents)
Annualized dividend rate 4.50% 4.45% 4.48%
30-day annualized yield 4.07% - -
30-day annualized 6.36% - -
tax-equivalent yield
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 $11.41 over the past one
month, $11.55 over the past six months and $11.57 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% 1999 federal income 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
Despite a continued decline in new
issues that helped create a stable
supply and demand environment
for municipal bonds, the market for
municipal securities deteriorated
during the six-month period that
ended May 31, 1999. During this
time, the Lehman Brothers Municipal
Bond Index - an index of
approximately 50,000
investment-grade, fixed-rate
tax-exempt bonds - returned
0.81%. In comparison, the Lehman
Brothers Aggregate Bond Index -
a widely followed measure of
taxable bond performance -
declined 0.76% during the same
period. While municipal bonds
outperformed taxable bonds over
the six-month period, the municipal
market struggled as investors
anticipated that interest rates may
increase in an effort to slow the
booming U.S. economy and fight the
threat of inflation. Although there is
no consistent agreement among
economists that the Federal Reserve
Board will increase interest rates at
its next meeting, yields - which
move in the opposite direction of
prices - increased during the
period, causing municipal securities
to trade lower. Late in the period,
investors sold bonds in response to a
stronger-than-expected consumer
price index in April. After the Federal
Reserve Board's policy meeting in
early May, municipal bonds came
under further pressure as the Fed
shifted its bias toward tighter
monetary policy and higher interest
rates, although it did not raise rates
at that time.
(photograph of Christine Thompson)
An interview with Christine Thompson, Portfolio Manager of Spartan
Florida Municipal Income Fund
Q. HOW DID THE FUND PERFORM, CHRISTINE?
A. For the six-month period that ended May 31, 1999, the fund had a
total return of 0.21%. To get a sense of how the fund did relative to
its competitors, the Florida municipal debt funds average returned
0.09% during the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Florida Municipal Bond Index - which
tracks the types of securities in which the fund invests - returned
0.64% for the same six-month period. For the 12-month period that
ended May 31, 1999, the fund had a total return of 3.92%. This
compared to the Florida municipal debt funds average's 3.33% return
and the Lehman Brothers index's 4.59% return for the same 12-month
period.
Q. WHAT HELPED THE FUND OUTPACE ITS COMPETITORS DURING THE PAST SIX
MONTHS?
A. The fund's emphasis on high-quality bonds helped its performance
relative to its competitors over the past six months. During that
time, investors became increasingly more cautious in their evaluation
of lower-quality securities. Rising interest rates and well-publicized
problems with some hospital, resource recovery and industrial
development bonds mostly outside of Florida prompted investors to
become slightly more concerned than they had been last fall about the
creditworthiness of lower-quality securities in general. In response,
investors pushed lower-quality bond prices lower, and their yields -
which move in the opposite direction of prices - climbed. The fund's
stake in bonds rated Aaa, Aa and A made up about 83% of the fund's
investments at the end of the period.
Q. CUTBACKS IN FEDERALLY FUNDED HEALTH CARE PROGRAMS AND INCREASED
COMPETITION PUT PRESSURE ON HOSPITALS NATIONWIDE. DID THE FUND'S
HOLDINGS IN HEALTH CARE BONDS SUFFER AS A RESULT OF THOSE PROBLEMS?
A. Florida health care organizations were relatively immune to the
severe problems that plagued some health care bonds elsewhere. That
said, reductions in Medicare and Medicaid spending, coupled with
ongoing competitive pressures, continued to pose challenges for the
state's health care industry. In this difficult operating environment,
my strategy is to be opportunistic, relying on Fidelity's research to
identify those institutions that will navigate through this
environment and ultimately emerge as the successful, dominant
hospitals in their respective markets. I believe select hospital
securities eventually will be among the market's strongest performers.
Q. WHAT TYPES OF MUNICIPALS LAGGED THE OVERALL MARKET DURING THE PAST
SIX MONTHS?
A. Intermediate-term bonds, those with maturities of between five and
15 years, were among the fund's disappointments during the period. In
contrast to last fall, intermediate-maturity bonds suffered from a
lack of demand from so-called "crossover buyers" - including pension
funds, hedge funds and insurance companies - that move among various
types of fixed-income securities in search of value. Despite their
disappointing recent performance, I continued to emphasize
intermediate-maturity bonds because, based on Fidelity's quantitative
models, they offered the most attractive value for their given
interest-rate sensitivity. What's more, I believe that they will post
strong performance over the longer term.
Q. CHRISTINE, WHAT'S YOUR OUTLOOK FOR THE MUNICIPAL MARKET?
A. Although municipals gained some ground during the past six months,
they were still priced attractively compared to their U.S. Treasury
counterparts at the end of the period. One indication of municipals'
cheap prices was their yields, which were roughly 90% of Treasury
yields. Historically, municipals yield between 65% and 85% 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 will post relatively good performance. One trend
we've seen lately is that municipals have outperformed Treasuries when
interest rates rise, but tend to lag Treasuries when interest rates
decline. I believe that trend will continue to define the municipal
market over the near term.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
FUND FACTS
GOAL: high current income
exempt from federal income
tax and the Florida intangible
tax
FUND NUMBER: 427
TRADING SYMBOL: FFLIX
START DATE: March 16, 1992
SIZE: as of May 31, 1999,
more than $446 million
MANAGER: Christine Thompson,
since 1998; manager,
various Spartan and Fidelity
municipal income funds;
joined Fidelity in 1985
(checkmark)
CHRISTINE THOMPSON ON Y2K
AND ITS POTENTIAL EFFECTS ON
MUNICIPAL BOND ISSUERS:
"Y2K may pose a number of
challenges for municipal bond
issuers. My primary focus with
regard to Y2K-related issues is
how they will impact the credit
quality of various issuers.
Fidelity's research team asks
issuers a number of things,
including how vulnerable they
believe they are to potential
problems, what their short-term
contingency plans are in the event
of any problems and what
long-term solutions they've
developed. What we've found so
far is that there are varying degrees
of sophistication among issuers, with
some much more poised to deal with
potential problems than others.
That's why we carefully consider
Y2K-related issues as one of the
many factors in our routine
security selection process."
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF MAY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO
Transportation 21.4 19.1
Electric Utilities 15.2 15.3
Health Care 13.4 10.5
Special Tax 10.9 10.2
General Obligations 9.6 11.0
AVERAGE YEARS TO MATURITY AS
OF MAY 31, 1999
6 MONTHS AGO
Years 11.6 11.3
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF MAY 31, 1999
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 MAY 31, 1999
Aaa 64.1%
Aa, A 18.6%
Baa 9.8%
Not Rated 3.6%
Short-term
investments 3.9%
Row: 1, Col: 1, Value: 64.09999999999999
Row: 1, Col: 2, Value: 18.6
Row: 1, Col: 3, Value: 9.800000000000001
Row: 1, Col: 4, Value: 3.6
Row: 1, Col: 5, Value: 3.9
AS OF NOVEMBER 30, 1998
Aaa 65.9%
Aa, A 19.8%
Baa 6.8%
Not Rated 3.6%
Short-term
investments 3.9%
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
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P (registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 96.1%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - 94.9%
Alachua County Health
Facilities Auth. Health
Facilities Rev. Rfdg.
(Avmed/Santa Fe Health Sys.
Proj.):
6% 11/15/09 (Escrowed to Baa1 $ 2,780,000 $ 2,979,521
Maturity) (e)
6.05% 11/15/16 (Escrowed to Baa1 6,230,000 6,793,005
Maturity) (e)
Broward County Arpt. Sys.
Rev. Series H 1:
4.5% 10/1/03 (AMBAC Insured) Aaa 3,425,000 3,475,724
(d)
4.5% 10/1/04 (AMBAC Insured) Aaa 3,280,000 3,320,705
(d)
Broward County Hsg. Fin. Aaa 1,225,000 1,288,578
Auth. Single Family Mtg.
Rev. 6.65% 8/1/21 (Govt.
Nat'l. Mortgage Assoc.
Collateralized) (d)
Broward County Resource A3 10,240,000 10,728,438
Recovery Rev. (SES 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 1,420,405
5.5% 1/1/05 (AMBAC Insured) Aaa 2,585,000 2,751,216
Dade County Aviation Rev.:
(Miami Int'l. Arpt.) Series Aaa 3,300,000 3,319,470
B, 5% 10/1/11 (FSA Insured)
(d)
Rfdg.:
(Miami Int'l. Arpt.) Series A:
5.75% 10/1/03 (FSA Insured) Aaa 1,800,000 1,911,384
(d)
5.75% 10/1/04 (FSA Insured) Aaa 5,000,000 5,345,200
(d)
Series B, 6.3% 10/1/05 (AMBAC Aaa 1,200,000 1,335,612
Insured)
Series C, 5.5% 10/1/11 (MBIA Aaa 5,200,000 5,492,292
Insured)
Series D, 5.75% 10/1/09 Aaa 2,125,000 2,274,494
(AMBAC Insured) (d)
Series Y, 5.3% 10/1/05 Aa3 3,460,000 3,633,623
Dade County Gen. Oblig.:
(Pub. Impt.) Series DD, 7.7% Aaa 1,820,000 2,219,763
10/1/07 (AMBAC Insured)
Rfdg.:
(Pub. Impt.) 7.5% 6/1/04 (FSA Aaa 2,400,000 2,750,496
Insured)
(Seaport):
6.25% 10/1/05 (MBIA Insured) Aaa 2,995,000 3,327,355
6.25% 10/1/06 (MBIA Insured) Aaa 1,575,000 1,763,165
Dade County Guaranteed
Entitlement Rev.:
(Cap. Appreciation) 0% 8/1/18 Aaa 14,835,000 4,466,670
(AMBAC Insured)
(Pre-Refunded to 2/1/06 @
40.446) (e)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Dade County Guaranteed
Entitlement Rev.: - continued
Rfdg. (Cap. Appreciation) Aaa $ 1,810,000 $ 1,630,647
Series B, 0% 2/1/02 (MBIA
Insured)
Dade County Resource Recovery Aaa 5,000,000 5,292,650
Facilities Rev. Rfdg. 5.5%
10/1/09 (AMBAC Insured) (d)
Dade County Seaport Rev. Rfdg.:
5.75% 10/1/15 (MBIA Insured) Aaa 5,100,000 5,465,262
6.2% 10/1/09 (MBIA Insured) Aaa 1,845,000 2,086,326
Dade County Spl. Oblig. Rfdg.
Series B:
0% 10/1/03 (AMBAC Insured) Aaa 4,160,000 3,486,163
0% 10/1/04 (AMBAC Insured) Aaa 5,045,000 4,032,317
Dade County Wtr. & Swr. Rev.:
5.25% 10/1/21 (FGIC Insured) Aaa 2,970,000 2,958,328
6.25% 10/1/06 (FGIC Insured) Aaa 1,500,000 1,678,200
6.25% 10/1/10 (FGIC Insured) Aaa 1,000,000 1,142,130
Dunedin Hosp. Rev. Rfdg. Aaa 1,400,000 1,464,890
(Mease Health Care) 5.25%
11/15/06 (MBIA Insured)
Dunedin Util. Sys. Rev. Rfdg. Aaa 1,360,000 1,552,372
6.25% 10/1/11 (FGIC Insured)
Duval County Hsg. Fin. Auth. Aaa 470,000 492,480
Single Family Mtg. Rev.
Series C, 7.7% 9/1/24 (FGIC
Insured), LOC Govt. Nat'l.
Mortgage Assoc.
Duval County School District Aaa 5,000,000 5,355,100
Rfdg. 6.3% 8/1/06 (AMBAC
Insured)
Escambia County Sales Tax Aaa 2,000,000 2,109,520
Rev. Rfdg. 5.55% 1/1/07
(FGIC Insured)
Escambia County Utils. Aaa 1,500,000 1,715,130
Auth.Util. Sys. Rev. 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+ 695,000 762,658
6.75% 10/1/14 (Pre-Refunded BBB+ 2,555,000 2,864,819
to 10/1/03 @ 102) (e)
(Baptist Hosp., Inc.) Series BBB+ 2,825,000 2,934,045
B, 6% 10/1/14
Florida Board of Ed. (Cap.
Outlay/Pub. Ed.):
Series 1994 C, 5.4% 6/1/06 Aa2 1,500,000 1,596,945
Series B, 5.625% 6/1/08 Aa2 2,000,000 2,149,520
Series E, 5.25% 6/1/23 Aa2 1,750,000 1,749,335
Series F, 5.5% 6/1/17 Aa2 3,000,000 3,090,120
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Florida Dept. of Trans.
(Right of Way):
Series A, 5% 7/1/15 Aa2 $ 3,000,000 $ 2,983,020
Series B, 5.5% 7/1/09 Aa2 3,810,000 4,095,293
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 5,190,250
5.7% 7/1/09 (AMBAC Insured) Aaa 3,000,000 3,208,590
5.75% 7/1/11 (AMBAC Insured) Aaa 3,000,000 3,211,530
Rfdg. (Dept. of Envir. Aaa 3,000,000 3,128,700
Preservation 2000) Series
A, 5% 7/1/06 (FSA Insured)
Florida Hsg. Fin. Agcy. Rfdg.:
(Multi-Family Park Colony AA- 2,500,000 2,522,650
Proj.) Series D, 5.1% 4/1/13
(Single Family Mtg.):
Series A:
6.35% 7/1/14 (Govt. Nat'l. Aaa 1,125,000 1,180,935
Mortgage Assoc.
Collateralized)
6.55% 7/1/14 (Govt. Nat'l. Aaa 1,405,000 1,479,367
Mortgage Assoc.
Collateralized) (d)
Series B, 6.55% 7/1/17 (Govt. Aaa 1,125,000 1,182,533
Nat'l. Mortgage Assoc.
Collateralized) (d)
Florida Mid-Bay Bridge Auth.
Rev. Series A:
6.875% 10/1/22 (Escrowed to - 3,000,000 3,642,720
Maturity) (e)
7.5% 10/1/17 - 1,700,000 1,870,527
Florida Muni. Pwr. Agcy. Rev.
Rfdg. (Stanton II Proj.):
4.5% 10/1/16 (AMBAC Insured) Aaa 4,400,000 4,097,676
4.5% 10/1/27 (AMBAC Insured) Aaa 7,000,000 6,183,590
Florida Tpk. Auth. Tpk. Rev.:
(Dept. of Trans.) Series A:
5.5% 7/1/05 (AMBAC Insured) Aaa 3,250,000 3,475,778
5.5% 7/1/06 (AMBAC Insured) Aaa 3,000,000 3,215,040
5.5% 7/1/14 (FGIC Insured) Aaa 1,500,000 1,571,445
Rfdg. Series A, 5.25% 7/1/09 Aaa 6,740,000 7,078,955
(FGIC Insured)
Gainesville Utils. Sys. Rev.:
Rfdg.:
Series A, 5.2% 10/1/22 Aa3 3,000,000 2,956,110
Series B, 5.5% 10/1/13 Aa3 1,500,000 1,555,560
Series B, 6.5% 10/1/10 Aa3 1,600,000 1,854,720
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Greater Orlando Aviation
Auth. Orlando Arpt.
Facilities Rev.:
Series A, 6.5% 10/1/05 (FGIC Aaa $ 3,550,000 $ 3,848,804
Insured) (d)
5.25% 10/1/23 (FGIC Insured) Aaa 3,000,000 2,935,470
(d)
Hillsborough County Aviation
Auth. Rev.:
(Tampa Int'l. Arpt.) Series Aaa 2,270,000 2,338,214
A, 6.9% 10/1/11 (FGIC
Insured)
Rfdg. (Tampa Intl. Arpt.) Aaa 6,130,000 6,300,353
Series A, 5% 10/1/01 (AMBAC
Insured) (d)
Hillsborough County Cap. Aaa 1,000,000 1,104,460
Impt. Prog. Rev. Rfdg. 6%
8/1/06 (FGIC Insured)
Hillsborough County Gen. Aaa 2,080,000 2,206,693
Oblig. Rfdg. (Envir.
Sensitive LDS Acquisition &
Protection) 6% 7/1/02 (AMBAC
Insured) (Escrowed to
Maturity) (e)
Hillsborough County Ind. Dev. Baa1 5,000,000 4,978,350
Auth. Ind. Dev. Rev. (Health
Facilities Proj./Univ.
Cmnty. Hosp.) Series A,
5.625% 8/15/19
Hillsborough County Port
District Spl. Refing. Rev.
Rfdg. (Tampa Port Auth.):
6.5% 6/1/03 (FSA Insured) (d) Aaa 2,000,000 2,172,140
6.5% 6/1/05 (FSA Insured) (d) Aaa 2,000,000 2,225,600
Hillsborough County School Aaa 4,370,000 4,660,824
Board Ctfs. of Ptrn. 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 5,002,140
0% 8/1/06 (MBIA Insured) Aaa 5,000,000 3,662,550
0% 8/1/07 (MBIA Insured) Aaa 7,000,000 4,878,930
Indian River County Wtr. & Aaa 2,000,000 2,130,460
Swr. Rev. Rfdg. Series A,
5.5% 9/1/11 (FGIC Insured)
Jacksonville Elec. Auth. Rev.:
(Second Installment) 5.25% Aaa 1,970,000 1,994,251
7/1/01 (Escrowed to
Maturity) (e)
Rfdg. (Saint John River Proj.):
Series 5 Issue 2, 7% 10/1/09 Aa2 2,490,000 2,554,665
Series 10 Issue 2, 6.5% Aa2 1,500,000 1,642,980
10/1/03
Series 16 Issue 2, 5.375% Aa2 4,000,000 4,079,080
10/1/13
Jacksonville Excise Tax Rev.:
Rfdg. 6.25% 10/1/05 (AMBAC Aaa 1,000,000 1,081,370
Insured)
Series B, 5.6% 10/1/08 (FGIC Aaa 2,300,000 2,384,686
Insured) (d)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (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 $ 3,943,535
5.5% 8/15/05 (MBIA Insured) Aaa 1,600,000 1,708,592
Rfdg. (Baptist Med. Ctr. Aaa 500,000 510,000
Proj.) Series A, 7.3%
6/1/19 (Pre-Refunded to
6/1/99 @ 102) (e)
Jacksonville Health
Facilities Auth. Ind. Dev.
Rev.:
(Cypress Village Proj./Nat'l. Baa1 2,740,000 3,143,328
Benevolent Assoc.) 8% 12/1/24
Rfdg. (Cypress Village
Proj./Nat'l. Benevolent
Assoc.):
6.25% 12/1/23 Baa1 2,710,000 2,869,104
7% 12/1/14 Baa1 1,000,000 1,084,590
7% 12/1/22 Baa1 2,000,000 2,167,160
Jacksonville Ind. Dev. Rev. - 1,250,000 1,322,688
Rfdg. (Cargill, Inc. Proj.)
6.4% 3/1/11 (g)
Jacksonville Port Auth. Arpt. Aaa 2,550,000 2,641,775
Rev. Rfdg. 5% 10/1/05 (FGIC
Insured) (d)
Jacksonville Sales Tax Rev. Aaa 1,900,000 2,010,713
(River City Rennaissance
Proj.) 5.65% 10/1/14 (FGIC
Insured)
Lakeland Elec. & Wtr. Rev.:
(Cap. Appreciation) 0% Aaa 2,840,000 1,757,704
10/1/09 (FGIC Insured)
(Escrowed to Maturity) (e)
Rfdg. Series B:
6.3% 10/1/02 (FSA Insured) Aaa 5,180,000 5,574,198
6.55% 10/1/07 (FSA Insured) Aaa 1,095,000 1,260,345
Lee County Ind. Dev. Auth.
Health Care Facilities Rev.
Rfdg. (Shell Point Village
Proj.) Series A:
5.25% 11/15/07 BBB- 1,250,000 1,279,425
5.5% 11/15/09 BBB- 800,000 812,616
5.5% 11/15/29 BBB- 3,250,000 3,125,590
Leesburg Hosp. Rev. Rfdg.
(Leesburg Reg'l. Med. Ctr.
Proj.):
Series A, 5.6% 7/1/08 A3 5,000,000 5,296,400
Series B, 5.625% 7/1/13 A3 2,795,000 2,886,397
Leon County Cap. Impt. Rev.
Rfdg. Series B:
5.25% 10/1/03 (AMBAC Insured) Aaa 1,635,000 1,700,809
(b)
5.25% 10/1/04 (AMBAC Insured) Aaa 1,720,000 1,793,977
(b)
5.25% 10/1/08 (AMBAC Insured) Aaa 2,115,000 2,227,032
(b)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Leon County Cap. Impt. Rev.
Rfdg. Series B: - continued
5.25% 10/1/09 (AMBAC Insured) Aaa $ 2,225,000 $ 2,324,992
(b)
5.25% 10/1/11 (AMBAC Insured) Aaa 2,465,000 2,547,799
(b)
Leon County Gen. Oblig. Rev. Aaa 1,000,000 1,079,030
Rfdg. 5.5% 10/1/07 (MBIA
Insured)
Melbourne Arpt. Rev. Rfdg.:
5.75% 10/1/99 (MBIA Insured) Aaa 215,000 216,742
(d)
6.25% 10/1/00 (MBIA Insured) Aaa 230,000 237,728
(d)
6.25% 10/1/01 (MBIA Insured) Aaa 240,000 253,020
(d)
6.25% 10/1/02 (MBIA Insured) Aaa 260,000 278,125
(d)
6.25% 10/1/03 (MBIA Insured) Aaa 270,000 292,561
(d)
6.5% 10/1/04 (MBIA Insured) Aaa 290,000 321,016
(d)
6.5% 10/1/05 (MBIA Insured) Aaa 310,000 346,658
(d)
6.5% 10/1/06 (MBIA Insured) Aaa 325,000 366,490
(d)
6.75% 10/1/07 (MBIA Insured) Aaa 350,000 403,725
(d)
6.75% 10/1/08 (MBIA Insured) Aaa 375,000 435,713
(d)
6.75% 10/1/09 (MBIA Insured) Aaa 400,000 466,668
(d)
6.75% 10/1/10 (MBIA Insured) Aaa 425,000 499,872
(d)
Miami Beach Health Facilities BBB 4,500,000 4,311,405
Auth. Hosp. Rev. (Mount
Sinai Med. Ctr.) 5.375%
11/15/28
Miami Dade County Aviation
Rev.:
Rfdg. Series A, 5% 10/1/05 Aaa 2,550,000 2,641,775
(FGIC Insured) (d)
Series C, 5.25% 10/1/12 (MBIA Aaa 5,185,000 5,275,738
Insured) (d)
Miami-Dade County School
Board Ctfs. of Prtn. Rfdg.
Series C:
5% 8/1/02 (FSA Insured) Aaa 2,000,000 2,062,320
5% 8/1/25 (FSA Insured) Aaa 2,000,000 1,929,420
Naples Hosp. Rev. Rfdg. Aaa 1,500,000 1,555,485
(Naples Cmnty. Hosp., Inc.
Proj.) 5.1% 10/1/07 (MBIA
Insured)
North Miami Edl. Facilities - 6,605,000 6,749,319
Rev. (Johnson & Wales Univ.
Proj.) Series A, 6.125%
4/1/20
Orange County Health
Facilities Auth. Rev.:
(Orlando Reg'l. Healthcare) Aaa 2,500,000 2,837,400
Series A, 6.25% 10/1/18
(MBIA Insured)
Rfdg. (Adventist Health Sys.) Aaa 2,000,000 2,168,660
5.75% 11/15/05 (AMBAC
Insured)
Orange County Hsg. Fin. Auth. AAA 1,385,000 1,457,131
Single Family Mtg. Rev.
(Mtg. Backed Securities
Prog.) 6.4% 10/1/14 (d)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Orange County Tourist Dev. Aaa $ 1,795,000 $ 1,985,665
Tax Rev. Rfdg. Series A,
5.85% 10/1/08 (MBIA Insured)
Orlando & Orange County Aaa 2,200,000 2,291,674
Expressway Auth. Rev. 5.097%
7/1/04 (FGIC Insured)
Orlando Util. Commission Wtr.
& Elec. Rev.:
Rfdg.:
Sub-Series A, 5% 10/1/20 Aa2 5,745,000 5,540,133
Sub-Series D, 6.75% 10/1/17 Aa2 7,250,000 8,585,378
6% 10/1/10 Aa1 2,505,000 2,808,606
5.538% 10/31/13 Aa2 9,400,000 9,929,878
Palm Beach County Health A- 2,930,000 2,959,417
Facilities Auth. Rev.
(Retirement Cmnty.-Adult
Communities Total Svc.,
Inc.) 5.625% 11/15/20
Pasco County Solid Waste
Disp. & Resource Recovery
Sys. Rev. Rfdg.:
5.75% 4/1/04 (AMBAC Insured) Aaa 3,380,000 3,600,815
(d)
6% 4/1/10 (AMBAC Insured) (d) Aaa 5,770,000 6,362,233
6% 4/1/11 (AMBAC Insured) (d) Aaa 5,000,000 5,501,550
Pensacola Arpt. Rev. Rfdg. Aaa 1,500,000 1,659,330
Series A, 6.125% 10/1/18
(MBIA Insured) (d)
Plantation Health Facilities - 2,500,000 2,855,275
Auth. Rev. (Covenant
Retirement Communities,
Inc.) 7.75% 12/1/22
(Pre-Refunded to 12/1/02 @
102) (e)
Polk County Ind. Dev. Auth. Aaa 1,445,000 1,565,744
Ind. Dev. Rev. (Winter Haven
Hosp.) Series 2, 6.25%
9/1/15 (MBIA Insured)
Port of Saint Lucie Util.
Rev. Rfdg. & Impt. Series A:
5% 9/1/17 (MBIA Insured) Aaa 8,000,000 7,857,760
5.125% 9/1/27 (MBIA Insured) Aaa 4,750,000 4,643,030
Sarasota County Util. Sys. Aaa 1,830,000 2,012,158
Rev. Rfdg. Series A, 6%
10/1/05 (FGIC Insured)
South Miami Health Facilities Aaa 1,980,000 2,116,858
Auth. Hosp. Rev. Rfdg.
(Baptist Health Sys. Oblig.
Group) 5.5% 10/1/05 (MBIA
Insured)
Sumter County School District Aaa 1,000,000 1,242,630
Rev. (Multi-District 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 1,022,492
0% 10/1/01 (AMBAC Insured) Aaa 1,225,000 1,123,252
0% 10/1/02 (AMBAC Insured) Aaa 1,000,000 879,100
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Sunshine State Govt. Fing. Aaa $ 1,000,000 $ 1,071,990
Commission Rev. Series A,
5.5% 10/1/05 (FGIC Insured)
Tampa Gen. Oblig.:
(Allegheny Health Sys. - St.
Joseph):
6.7% 12/1/07 (MBIA Insured) Aaa 2,535,000 2,758,359
(Pre-Refunded to 12/1/01 @
102) (e)
6.75% 12/1/17 (MBIA Insured) Aaa 150,000 163,394
(Pre-Refunded to 12/1/01 @
102) (e)
(Catholic Health East) Series
A 1:
4.7% 11/15/10 (MBIA Insured) Aaa 1,500,000 1,499,400
5% 11/15/09 (MBIA Insured) Aaa 1,000,000 1,033,300
5.5% 11/15/08 (MBIA Insured) Aaa 1,000,000 1,076,610
5.5% 11/15/14 (MBIA Insured) Aaa 1,000,000 1,067,700
Tampa Sports Auth. Rev. Aaa 2,235,000 2,433,803
(Stadium Proj.) 6% 1/1/05
(MBIA Insured)
Volusia County Edl. Baa2 2,500,000 2,658,825
Facilities Auth. Rev. (Embry
Riddle Aeronaut Univ.)
Series A, 6.125% 10/15/16
434,554,211
PUERTO RICO - 1.2%
Puerto Rico Commonwealth Pub. Baa1 2,000,000 2,065,660
Impt. 5.25% 7/1/15
Puerto Rico Elec. Pwr. Auth. Aaa 3,000,000 3,373,140
Rfdg. Series W, 6.5% 7/1/05
(MBIA Insured)
5,438,800
TOTAL MUNICIPAL BONDS 439,993,011
(Cost $422,278,330)
</TABLE>
MUNICIPAL NOTES - 3.9%
FLORIDA - 3.9%
Dade County Ind. Dev. Auth. 5,000,000 5,000,000
Rev. Rfdg. (Florida Pwr. &
Lt. Co. Proj.) Series 1993,
3.4%, VRDN (c)
Jacksonville Health 1,100,000 1,100,000
Facilities Auth. Hosp. Rev.
Rfdg. (Genesis
Rehabilitation Hosp.) Series
1996, 3.35%, LOC Barnett
Bank NA, VRDN (c)
Manatee County Poll. Cont. 600,000 600,000
Rev. Rfdg. (Florida Pwr. &
Lt. Co. Proj.) Series 1994,
3.3%, VRDN (c)
Martin County Poll. Cont. 1,300,000 1,300,000
Rev. Rfdg. (Florida Pwr. &
Lt. Co. Proj.) Series 1994,
3.3%, VRDN (c)
MUNICIPAL NOTES - CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Putnam County Poll. Cont. $ 1,400,000 $ 1,400,000
Dev. Auth. Poll. Cont. Rev.
Rfdg. (Florida Pwr. & Lt.
Co.Proj.) 3.3%, VRDN (c)
Saint Lucie County Poll.
Cont. Rev. Rfdg. (Florida
Pwr. & Lt. Co. Proj.):
3.3%, VRDN (c) 1,000,000 1,000,000
3.3%, VRDN (c) 3,050,000 3,050,000
Tampa Sports Auth. Rev. 4,300,000 4,300,000
Participating VRDN Series
SGA 61, 3.35% (Liquidity
Facility Societe Generale,
France) (c)(f)
TOTAL MUNICIPAL NOTES 17,750,000
(Cost $17,750,000)
TOTAL INVESTMENT IN $ 457,743,011
SECURITIES - 100%
(Cost $440,028,330)
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Standard & Poor's(registered trademark) 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.
(c) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(d) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(e) Security collateralized by an amount sufficient to pay interest
and principal.
(f) Provides evidence of ownership in one or more underlying municipal
bonds.
(g) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additonal information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Jacksonville Ind. Dev. Rev. 7/9/92 $ 1,250,000
Rfdg. (Cargill, Inc. Proj.)
6.4% 3/1/11
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A)
amounted to $1,322,688 or 0.3% of net assets.
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 81.2% AAA, AA, A 85.0%
Baa 6.3% BBB 4.6%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by 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 21.4%
Electric Utilities 15.2
Health Care 13.4
Special Tax 10.9
General Obligations 9.6
Water & Sewer 9.1
Escrowed/Pre-Refunded 7.1
Resource Recovery 6.9
Others (individually less 6.4
than 5%)
100.0%
INCOME TAX INFORMATION
At May 31, 1999, the aggregate cost of investment securities for
income tax purposes was $440,035,987. Net unrealized appreciation
aggregated $17,707,024, of which $18,919,165 related to appreciated
investment securities and $1,212,141 related to depreciated investment
securities.
SPARTAN FLORIDA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 457,743,011
value (cost $440,028,330) -
See accompanying schedule
Cash 26,149
Receivable for fund shares 159,029
sold
Interest receivable 5,608,399
TOTAL ASSETS 463,536,588
LIABILITIES
Payable for investments $ 5,019,456
purchased Regular delivery
Delayed delivery 10,317,806
Payable for fund shares 1,074,586
redeemed
Distributions payable 692,717
Accrued management fee 209,153
Other payables and accrued 2,364
expenses
TOTAL LIABILITIES 17,316,082
NET ASSETS $ 446,220,506
Net Assets consist of:
Paid in capital $ 427,826,080
Accumulated undistributed net 679,745
realized gain (loss) on
investments
Net unrealized appreciation 17,714,681
(depreciation) on investments
NET ASSETS, for 39,300,046 $ 446,220,506
shares outstanding
NET ASSET VALUE, offering $11.35
price and redemption price
per share ($446,220,506
(divided by) 39,300,046
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 11,310,193
Expenses
Management fee $ 1,247,304
Non-interested trustees' 761
compensation
Total expenses before 1,248,065
reductions
Expense reductions (15,716) 1,232,349
NET INTEREST INCOME 10,077,844
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,071,258
Futures contracts (164,799) 906,459
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (9,919,320)
Futures contracts 160,769 (9,758,551)
NET GAIN (LOSS) (8,852,092)
NET INCREASE (DECREASE) IN $ 1,225,752
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 10,077,844 $ 19,649,096
Net realized gain (loss) 906,459 4,177,788
Change in net unrealized (9,758,551) 6,787,122
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,225,752 30,614,006
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (10,077,844) (19,649,096)
From net interest income
From net realized gain (3,526,759) (1,809,138)
TOTAL DISTRIBUTIONS (13,604,603) (21,458,234)
Share transactions Net 56,646,297 72,078,855
proceeds from sales of shares
Reinvestment of distributions 8,044,991 13,227,479
Cost of shares redeemed (54,603,580) (54,386,216)
NET INCREASE (DECREASE) IN 10,087,708 30,920,118
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 29,442 15,554
TOTAL INCREASE (DECREASE) (2,261,701) 40,091,444
IN NET ASSETS
NET ASSETS
Beginning of period 448,482,207 408,390,763
End of period $ 446,220,506 $ 448,482,207
OTHER INFORMATION
Shares
Sold 4,888,461 6,244,717
Issued in reinvestment of 697,538 1,145,917
distributions
Redeemed (4,727,956) (4,716,574)
Net increase (decrease) 858,043 2,674,060
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.670 $ 11.420 $ 11.230 $ 11.180 $ 9.740
period
Income from Investment .256 .526 .539 .546 .573
Operations Net interest
income
Net realized and unrealized (.231) .300 .190 .054 1.439
gain (loss)
Total from investment .025 .826 .729 .600 2.012
operations
Less Distributions
From net interest income (.256) (.526) (.539) (.546) (.573)
From net realized gain (.090) (.050) - (.005) -
Total distributions (.346) (.576) (.539) (.551) (.573)
Redemption fees added to paid .001 .000 .000 .001 .001
in capital
Net asset value, end of $ 11.350 $ 11.670 $ 11.420 $ 11.230 $ 11.180
period
TOTAL RETURN B, C 0.21% 7.40% 6.69% 5.59% 21.09%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 446,221 $ 448,482 $ 408,391 $ 391,130 $ 395,991
(000 omitted)
Ratio of expenses to average .55% A .55% .55% .55% .55%
net assets
Ratio of expenses to average .54% A, E .55% .55% .54% E .55%
net assets after expense
reductions
Ratio of net interest income 4.44% A 4.56% 4.81% 4.96% 5.37%
to average net assets
Portfolio turnover rate 24% A 24% 25% 28% 65%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.290
period
Income from Investment .587
Operations Net interest
income
Net realized and unrealized (1.352)
gain (loss)
Total from investment (.765)
operations
Less Distributions
From net interest income (.587)
From net realized gain (.200)
Total distributions (.787)
Redemption fees added to paid .002
in capital
Net asset value, end of $ 9.740
period
TOTAL RETURN B, C (7.19)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 335,551
(000 omitted)
Ratio of expenses to average .54% D
net assets
Ratio of expenses to average .54%
net assets after expense
reductions
Ratio of net interest income 5.49%
to average net assets
Portfolio turnover rate 49%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
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.
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-sized account. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had
not reimbursed certain fund expenses, the past five years and life of
fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN FL MUNICIPAL MONEY 1.35% 2.90% 16.94% 22.17%
MARKET
All Tax-Free Money Market 1.28% 2.74% 15.99% n/a
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on August 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 six months average
represents a peer group of 14 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN FL MUNICIPAL MONEY 2.90% 3.18% 3.00%
MARKET
All Tax-Free Money Market 2.74% 3.02% n/a
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
5/31/99 3/1/99 11/30/98 8/31/98 6/1/98
Spartan Florida Municipal 2.79% 2.51% 2.85% 3.03% 3.45%
Money Market Fund
All Tax-Free Money Market 2.69% 2.42% 2.71% 2.80% 3.22%
Funds Average
Spartan Florida Municipal 4.36% 3.92% 4.45% 4.73% 5.39%
Money Market Fund -
Tax-equivalent
Portion of fund's income 3.16% 11.32% 3.80% 16.03% 20.13%
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
table 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 1999 federal
income tax rate of 36%. A portion of the fund's income may be subject
to the federal 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
(photograph of Scott Orr)
An interview with Scott Orr, Portfolio Manager of Spartan Florida
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE SIX MONTHS
THAT ENDED MAY 31, 1999?
A. As the period began, the market remained under the shadow of the
global turmoil that plagued it in the third and early fourth quarter
of 1998. There were a lot of questions about the pace of U.S. economic
growth and the direction of interest rates. However, early in the
period, market participants interpreted some signs to mean that the
economy would sustain the steady growth we witnessed over the past
year. For example, in December, we saw reports that November's
employment data was stronger than expected. As the month went on, it
became more and more clear that the Federal Reserve Board would
discontinue the rapid-fire interest-rate cuts it had employed to boost
the markets from September through November 1998. Rates crept up from
that point through the end of the period, as market observers tried to
weigh what influence Fed action and emerging economic data might have
on the future course of interest rates.
Q. WHAT HAPPENED MORE RECENTLY, OVER THE LAST THREE MONTHS OF THE
PERIOD?
A. In March and April, data indicated that inflation might not be as
well-behaved as it had been in the recent past. Sentiment shifted from
the expectation that Fed policy was going to be unchanged to one
expecting a Fed rate increase. Such a hike would be employed by the
Fed to curb economic growth and diminish inflationary pressures. By
the end of May, the consensus viewpoint in the market was not "if" the
Fed would raise short-term interest rates, but "when." At its May Open
Market Committee meeting, the Fed added fuel to that fire when it
announced a bias toward raising rates.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. The fund confronted its typical year-end challenge, as investors
sought to shelter some of their assets from the Florida intangible tax
levied at the end of each calendar year. There was an increase in net
assets from $452 million at the beginning of the period to more than
$1.2 billion at the turn of the year. By the end of January, net
assets were back down to about $650 million. Handling the increase in
assets dominated strategy at the beginning of the period, as I kept
the fund as fully invested as possible to make sure it was
appropriately invested to shield its assets from the tax. The fund's
average maturity started the period at 47 days and dropped to nearly
20 days when I added very short-term securities for that
turn-of-the-year period. From January on, I liquidated positions to
meet anticipated redemptions. In addition, I was able to focus the
fund to reflect my interest-rate outlook. Specifically, I looked for
opportunities in the fixed-rate, one-year area to lock in rates that I
felt reflected my expectations for higher rates.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1999, was 2.79%, compared to
2.85% six months ago. The more recent seven-day yield was the
equivalent of a 4.36% taxable rate of return for Florida investors in
the 36% federal income tax bracket. Through May 31, 1999, the fund's
six-month total return was 1.35%, compared to 1.28% for the all
tax-free money market funds average, according to IBC Financial Data,
Inc.
Q. WHAT'S YOUR OUTLOOK?
A. As of the end of May, the economy remains strong, labor markets are
tight and inflation looks like it might not be as subdued as it has
been. In addition, the Fed has announced its inclination to raise
interest rates to stave off inflationary pressures. I believe the Fed
will make such a move, probably at either its June or August Open
Market Committee meeting. Once the Fed raises rates, it may continue
some sort of rate-hike approach to slow the economy, given its
strength and the Fed's desire to quash inflation spurred by rapid
economic growth and a tight labor market. It's conceivable the Fed
would look to erase the effects of its rate cuts in late 1998, which
were implemented largely to provide liquidity to the markets, not to
supply fuel to the economy. In addition, the Fed may want to implement
its policy well in advance of the new year, in an attempt to avoid
changing interest-rate policy during a time when potential Year 2000
computer problems may occur. Indeed, a concern as we move toward the
end of the year is the Year 2000 issue and its possible impact on
municipal securities. As one of many factors we look at, we'll be
paying close attention to this issue in the months ahead.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
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
FUND NUMBER: 428
TRADING SYMBOL: FSFXX
SIZE: as of May 31, 1999,
more than $490 million
START DATE: August 24, 1992
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1989
(checkmark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 5/31/99 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
11/30/98 5/31/98
0 - 30 71 60 78
31 - 90 13 24 6
91 - 180 11 9 11
181 - 397 5 7 5
WEIGHTED AVERAGE MATURITY
5/31/99 11/30/98 5/31/98
Spartan Florida Municipal 41 DAYS 47 Days 35 Days
Money Market Fund
All Tax-Free Money Market 38 DAYS 45 Days 36 Days
Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF MAY 31, 1999 AS OF NOVEMBER 30, 1998
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 62.3% (VRDNs) 56.2%
Commercial Paper (including Commercial Paper (including
CP Mode) 27.9% CP Mode) 35.1%
Tender Bonds 0.8% Tender Bonds 3.0%
Municipal Notes 4.4% Municipal Notes 2.5%
Other 4.6% Other 3.2%
Row: 1, Col: 1, Value: 62.0 Row: 1, Col: 1, Value: 56.2
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 27.8 Row: 1, Col: 3, Value: 35.1
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.0 Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 4.4 Row: 1, Col: 7, Value: 2.5
Row: 1, Col: 8, Value: 4.6 Row: 1, Col: 8, Value: 3.2
</TABLE>
SPARTAN FLORIDA MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL AMOUNT VALUE (NOTE 1)
COLORADO - 0.3%
Colorado Student Oblig. Auth. $ 1,300,000 $ 1,300,000
Series 1999 A2, 3.4% (AMBAC
Insured), VRDN (a)(d)
FLORIDA - 96.6%
Brevard County School Board 10,000,000 10,037,809
RAN 3.5% 5/6/00
Broward County Hsg. Fin. 1,800,000 1,800,000
Auth. Multi-family Hsg.
(Palm Aire-Oxford Proj.)
Series 1990, 3.4%
(Continental Casualty Co.
Guaranteed), VRDN (a)
Broward County Ind. Dev. 1,050,000 1,050,000
Auth. Ind. Dev. Rev. (RIB
Associates Proj.) Series
1989, 3.35%, LOC SunTrust
Bank, Central FL NA, VRDN
(a)(d)
Broward County Ind. Dev. Rev.:
(Femc & Fast Industries, 1,500,000 1,500,000
Inc.) 3.35%, LOC Suntrust
Bank, South Florida NA, VRDN
(a)(d)
(Heico Aerospace Corp. Proj.) 1,000,000 1,000,000
3.35%, LOC Suntrust Bank,
South Florida NA, VRDN (a)(d)
Clay County Hsg. Fin. Auth. 2,545,000 2,545,000
Rev. Participating VRDN
Series PT 61, 3.39%
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (a)(d)(f)
Collier County Ind. Dev. 5,500,000 5,500,000
Auth. (Cmnty. School of
Naples Proj.) Series 1999,
3.3%, LOC NationsBank NA,
VRDN (a)
Dade County Gen. Oblig. Bonds 3,605,000 3,614,921
Series I, 6.8% 7/1/99 (AMBAC
Insured)
Dade County Hsg. Fin. Auth. 5,370,000 5,370,000
Participating VRDN Series
1995 B, 3.39% (Liquidity
Facility Bank of America
Nat'l. Trust & Savings
Assoc.) (a)(f)
Dade County Ind. Dev. Rev.:
(Guastafeste Proj.):
Series 1987, 3.35%, LOC 2,475,000 2,475,000
SunTrust Bank, Central FL
NA, VRDN (a)(d)
Series 1991, 3.35%, LOC 1,275,000 1,275,000
SunTrust Bank, Miami NA,
VRDN (a)(d)
(Royal Store Fixtures Corp. 1,780,000 1,780,000
Proj.) 3.35%, LOC SunTrust
Bank, Miami NA, VRDN (a)(d)
Dade County Multi-family Hsg. 28,475,000 28,475,000
Rev. (Biscayne View Apts.
Proj.) Series 1993, 3.6%
(Monumental Life Ins. Co.
Guaranteed), VRDN (a)(d)
Dade County Spl. Oblig. 5,995,000 5,995,000
Participating VRDN Series MS
98 105, 3.37% (Liquidity
Facility Morgan Stanley,
Dean Witter & Co.) (a)(f)
Dade County Wtr. & Swr. Rev. 10,110,000 10,110,000
Participating VRDN Series
SG 74, 3.32% (Liquidity
Facility Societe Generale,
France) (a)(f)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Escambia County Hsg. Fin. $ 1,520,000 $ 1,520,000
Auth. Participating VRDN
Series PA 129, 3.39%
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(d)(f)
Escambia County Poll. Cont. 4,775,000 4,775,000
Rev. Rfdg. (Monsanto Co.
Proj.) Series 1994, 3.4%,
VRDN (a)
Escambia County Solid Waste 5,300,000 5,300,000
Disp. Rev. (Monsanto Co.
Proj.) Series 1993, 3.5%,
VRDN (a)(d)
Florida Board of Ed.:
Bonds Series A, 4.25% 1/1/00 2,875,000 2,890,505
Participating VRDN:
Series 57, 3.37% (Liquidity 11,370,000 11,370,000
Facility Morgan Stanley,
Dean Witter & Co.) (a)(f)
Series 96C0905, Class A, 9,900,000 9,900,000
3.34% (Liquidity Facility
Citibank, New York NA) (a)(f)
Series SG 22, 3.32% 8,970,000 8,970,000
(Liquidity Facility Societe
Generale, France) (a)(f)
Lottery Rev. Bonds Series B, 4,500,000 4,504,079
4.5% 7/1/99 (FGIC Insured)
Rfdg. Bonds (Pub. Ed.) Series 3,305,000 3,305,000
C, 4% 6/1/99
Florida Cap. Projects Fin. 14,800,000 14,800,000
Auth. (Florida Hosp. Assoc.
Cap. Proj.) Series 1998 A,
3.4% (FSA Insured), VRDN (a)
Florida Div. Board Fin. Dept. 13,395,000 13,395,000
Gen. Svcs. Rev.
Participating VRDN Series
61, 3.37% (Liquidity
Facility Morgan Stanley,
Dean Witter & Co.) (a)(f)
Florida Hsg. Fin. Agcy.:
(Banyan Bay Apts. Proj.) 5,275,000 5,275,000
3.45%, LOC PNC Bank NA, VRDN
(a)(d)
(Heron Parkway Proj.) 3.45%, 5,800,000 5,800,000
LOC NationsBank NA, VRDN
(a)(d)
Rfdg.:
(Brandon-Oxford Proj.) Series 13,100,000 13,100,000
1990 C, 3.4% (Continental
Casualty Co. Guaranteed),
VRDN (a)
(Hillsborough-Oxford Proj.) 5,590,000 5,590,000
Series D, 3.4% (Continental
Casualty Co. Guaranteed),
VRDN (a)
Florida Hsg. Fin. Agcy. 4,400,000 4,400,000
Homeowner Mtg. Rev.
Participating VRDN Series
FR/RI 12, 3.45% (Liquidity
Facility Bank of New York
NA) (a)(d)(f)
Florida Local Govt. Fin.
Commission:
Series A, 3.2% 9/9/99, LOC 5,810,000 5,810,000
First Union Nat'l. Bank of
North Carolina, CP
Series B, 3.2% 9/7/99, LOC 3,500,000 3,500,000
First Union Nat'l. Bank of
North Carolina, CP (d)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Florida Muni. Pwr. Agcy.
Series A:
3.15% 9/15/99, LOC First $ 6,865,000 $ 6,865,000
Union Nat'l. Bank of North
Carolina, CP
3.2% 7/22/99, LOC First Union 1,990,000 1,990,000
Nat'l. Bank of North
Carolina, CP
3.2% 9/16/99, LOC First Union 5,245,000 5,245,000
Nat'l. Bank of North
Carolina, CP
Gulf Breeze Gen. Oblig. 3,125,000 3,125,000
Series 1995 A, 3.35%, LOC
NationsBank NA, VRDN (a)
Halifax Hosp. Med. Ctr. TAN 3,625,000 3,637,442
3.5% 3/15/00, LOC
NationsBank NA
Hillsborough County Aviation 5,100,000 5,100,000
Auth. Rev. Second Series,
3.1% 8/13/99, LOC Nat'l.
Westminster Bank PLC, CP (d)
Hillsborough County Ind. Dev.
Auth. Ind. Dev. Rev. (Vigo
Importing Co. Proj.):
3.4%, LOC NationsBank NA, 1,175,000 1,175,000
VRDN (a)(d)
3.95%, LOC Barnett Bank NA, 1,300,000 1,300,000
VRDN (a)(d)
Hillsborough County 2,700,000 2,700,000
Multi-family Rev. (Brandon
Crossing Apts.) Series 1998
A, 3.45%, LOC Amsouth Bank,
Birmingham, VRDN (a)(d)
Indian River County Hosp. 2,500,000 2,500,000
District Hosp. Rev. Bonds
Series 1989, 3.15% tender
8/12/99, LOC Kredietbank NV,
CP mode
Inland Protection Fin. Corp. 5,855,000 5,903,640
Spl. Oblig. Rev. Bonds 4.5%
1/1/00 (FSA Insured)
Jacksonville Health 14,660,000 14,660,000
Facilities Auth. Hosp. Rev.
Participating VRDN Series
1996 M, 3.32% (Liquidity
Facility Caisse des Depots
et Consignations) (a)(f)
Jacksonville Health 1,800,000 1,800,000
Facilities Rev. (Faculty
Practice Assoc.) 3.3%, LOC
NationsBank NA, VRDN (a)
Jacksonville Poll. Cont. Rev.
Rfdg. Bonds (Florida Pwr. &
Lt. Co. Proj.):
Series 1992, 3.2% tender 3,900,000 3,900,000
2/10/00, CP mode
Series 1994, 3.2% tender 3,500,000 3,500,000
9/13/99, CP mode
Lee County Hosp. Board Hosp.
Rev. Bonds (Lee Memorial
Hosp. Proj.):
Series 1985D:
3.25% tender 6/18/99 4,200,000 4,200,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
3.3% tender 6/18/99 500,000 500,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
Series 1992B, 3.45% tender 5,800,000 5,800,000
6/18/99, CP mode
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Lee County Hosp. Board Hosp.
Rev. Bonds (Lee Memorial
Hosp. Proj.): - continued
Series 1995 A, 3.15% tender $ 11,400,000 $ 11,400,000
6/18/99 (Liquidity Facility
SunTrust Bank, Central FL
NA), CP mode
Series 1995A, 3.35% tender 2,500,000 2,500,000
6/17/99, CP mode
Series 1997 B:
3.25% tender 6/10/99 7,600,000 7,600,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
3.4% tender 6/11/99 2,100,000 2,100,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
3.5% tender 6/25/99 1,000,000 1,000,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
Lee County Ind. Dev. Auth. 2,250,000 2,250,000
Edl. Facilities Rev.
(Canterbury School Income
Proj.) 3.3%, LOC Suntrust
Bank, South Florida NA, VRDN
(a)
Miami Dade County Ind. Dev. 3,020,000 3,020,000
Auth. Rev. (Edron Fixture
Corp. Proj.) Series 1999B,
3.35%, LOC SunTrust Bank,
Miami NA, VRDN (a)(d)
Miami Dade County School 4,000,000 4,001,917
District TAN 4% 6/30/99
Miami Dade County Single 2,800,000 2,800,000
Family Mtg. Rev. Bonds
Series 1998 B, 3.45%, tender
10/1/99 (FGIC Guaranteed) (d)
Okeechobee County Solid Waste 7,500,000 7,500,000
Rev. (Chambers Waste Sys.
Proj.) Series 1992, 3.4%,
LOC Morgan Guaranty Trust
Co., NY, VRDN (a)(d)
Orange County Hsg. Fin. Auth. 5,950,000 5,950,000
(Westlake Club Proj.)
Series 1991 A, 3.35%
(Continental Casualty Co.
Guaranteed), VRDN (a)
Orange County Hsg. Fin. Auth.
Multi-family Hsg. Rev.:
(Falcon Trace Apt.) Series 4,050,000 4,050,000
1998 D, 3.35%, LOC Amsouth
Bank, Birmingham, VRDN (a)(d)
(Regal Pointe Apts.) Series 5,893,000 5,893,000
1997 A, 3.45%, LOC
NationsBank NA, VRDN (a)(d)
(Wtr. View Club) Series 1997 4,000,000 4,000,000
D, 3.35%, LOC Key Bank, NA,
VRDN (a)(d)
Orange County Tourist Dev. 6,400,000 6,400,000
Tax Rev. Participating VRDN
Series 1998 96, 3.4%
(Liquidity Facility Morgan
Stanley, Dean Witter & Co.)
(a)(f)
Orlando Util. Commission Wtr.
& Elec. Rev.:
Bonds Sub-Series C, 7% 2,500,000 2,579,614
10/1/23 (Pre-Refunded to
10/1/99 @ 102) (e)
Rfdg. Participating VRDN 4,365,000 4,365,000
Series SG 18, 3.32%
(Liquidity Facility Societe
Generale, France) (a)(f)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Palm Beach County Health $ 3,800,000 $ 3,800,000
Facilities Auth. Rev. Bonds
3.2% tender 7/22/99 (MBIA
Insured) (Liquidity Facility
Credit Swiss First Boston,
Inc.), CP mode
Palm Beach County Hsg. Fin. 1,020,000 1,020,000
Auth. Bonds 3.75%, tender
7/1/99 (FGIC Guaranteed) (d)
Palm Beach County Rev. (Saint 4,000,000 4,000,000
Andrews School Boca Raton)
Series 1998, 3.3%, LOC
NationsBank NA, VRDN (a)
Pinellas County Ind. Council 2,100,000 2,100,000
Ind. Dev. Rev. (Hunter
Douglas, Inc.) 3.35%, LOC
ABN-AMRO Bank NV, VRDN (a)(d)
Polk County Ind. Dev. Auth. 5,000,000 5,000,000
Ind. Dev. Rev. (Farmland
Hydro LP Proj.) 3.35%, LOC
RaboBank Nederland Coop.
Central, VRDN (a)(d)
Reedy Creek Impt. District 9,900,000 9,900,000
Participating VRDN Series
96C0904 Class A, 3.34%
(Liquidity Facility
Citibank, New York NA) (a)(f)
Saint Johns County Ind. Dev. 2,940,000 2,940,000
Auth. Rev. (V.A.W. of
America) Series 1997, 3.3%,
LOC NationsBank NA, VRDN (a)
Saint Lucie County Poll.
Cont. Rev. Bonds (Florida
Pwr. & Lt. Co. Proj.):
Series 1992A, 3.15% tender 15,125,000 15,125,000
8/10/99, CP mode
Series 1994A, 3.05% tender 3,500,000 3,500,000
9/10/99, CP mode
Saint Petersburg Cap. Impt.
Rev.:
(Arpt. Proj.) Series 1997 C, 1,340,000 1,340,000
3.35%, LOC Suntrust Bank,
Tampa Bay, VRDN (a)(d)
(Florida Int'l. Museum Proj.) 3,000,000 3,000,000
Series 1997 A, 3.3%, LOC
Suntrust Bank, Tampa Bay,
VRDN (a)
Sarasota County Hosp.
District Hosp. Rev. Bonds
(Sarasota Memorial Hosp.
Proj.) Series A:
3.15% tender 8/9/99 2,000,000 2,000,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
3.2% tender 8/12/99 7,700,000 7,700,000
(Liquidity Facility SunTrust
Bank, Central FL NA), CP mode
3.2% tender 9/13/99, CP mode 3,000,000 3,000,000
3.2% tender 9/14/99, CP mode 3,500,000 3,500,000
Sarasota County Pub. Hosp. 12,200,000 12,200,000
Board Participating VRDN
Series 1998 99, 3.37%
(Liquidity Facility Morgan
Stanley, Dean Witter & Co.)
(a)(f)
Sunrise Util. Sys. Rev.
Participating VRDN:
Series SGB 16, 3.37% 5,030,000 5,030,000
(Liquidity Facility Societe
Generale, France) (a)(f)
Series SGB 17, 3.37% 2,325,000 2,325,000
(Liquidity Facility Societe
Generale, France) (a)(f)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
FLORIDA - CONTINUED
Sunshine State Govt. Fing.
Commission Rev.:
Bonds Series 1986, 3.2% $ 5,600,000 $ 5,600,000
tender 8/12/99 (AMBAC
Insured) (Liquidity Facility
UBS AG, Toronto Dominion
Bank), CP mode
Series A, 3.3% 7/14/99 (AMBAC 2,325,000 2,325,000
Insured) (FGIC Insured)
(Liquidity Facility Bank of
Nova Scotia), CP (d)
Tampa Sports Auth. Rev. 14,000,000 14,000,000
Participating VRDN Series
SGA 61, 3.35% (Liquidity
Facility Societe Generale,
France) (a)(f)
West Orange Memorial Hosp.
Tax District Rev. Bonds
Series 1991 A1:
3.15% tender 8/19/99, LOC 2,000,000 2,000,000
RaboBank Nederland Coop.
Central, CP mode
3.2% tender 7/22/99, LOC 2,100,000 2,100,000
RaboBank Nederland Coop.
Central, CP mode
471,547,927
NEW YORK - 0.7%
Nassau County Gen. Oblig. BAN 3,500,000 3,502,913
Series 1999 A, 3.5% 8/17/99
PENNSYLVANIA - 2.4%
Carbon County Ind. Dev. Auth. 11,445,000 11,445,000
Resource Recovery Rev. Bonds
(Panther Creek Partners
Proj.) Series 1991A, 3.1%
tender 9/16/99, LOC Nat'l.
Westminster Bank PLC, CP
mode (d)
SHARES
OTHER - 0.0%
Municipal Central Cash Fund 118,000 118,000
(b)(c)
TOTAL INVESTMENT IN $ 487,913,840
SECURITIES - 100%
(Cost $487,913,840)
</TABLE>
Total Cost for Income Tax Purposes $ 487,913,840
SECURITY TYPE ABBREVIATIONS
BAN - BOND ANTICIPATION NOTE
CP - COMMERCIAL PAPER
RAN - REVENUE ANTICIPATION NOTE
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) 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 3.26%. 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) Security collateralized by an amount sufficient to pay interest
and principal.
(f) 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
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 487,913,840
value - See accompanying
schedule
Receivable for fund shares 756,796
sold
Interest receivable 3,529,937
TOTAL ASSETS 492,200,573
LIABILITIES
Payable to custodian bank $ 29,509
Payable for fund shares 1,401,962
redeemed
Distributions payable 107,660
Accrued management fee 212,624
Other payables and accrued 1,660
expenses
TOTAL LIABILITIES 1,753,415
NET ASSETS $ 490,447,158
Net Assets consist of:
Paid in capital $ 490,468,480
Accumulated undistributed net (21,322)
realized gain (loss) on
investments
NET ASSETS, for 490,468,480 $ 490,447,158
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($490,447,158
(divided by) 490,468,480
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 9,703,276
EXPENSES
Management fee $ 1,537,221
Non-interested trustees' 1,005
compensation
Total expenses before 1,538,226
reductions
Expense reductions (187,825) 1,350,401
NET INTEREST INCOME 8,352,875
REALIZED AND UNREALIZED GAIN 32,742
(LOSS)
Net realized gain (loss) on
investment securities
NET INCREASE (DECREASE) IN $ 8,385,617
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 8,352,875 $ 15,116,587
Net realized gain (loss) 32,742 1,483
NET INCREASE (DECREASE) IN 8,385,617 15,118,070
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,352,875) (15,116,587)
from net interest income
Share transactions (at net 983,482,282 904,250,975
asset value of $1.00 per
share) Proceeds from sales
of shares
Reinvestment of 7,254,490 14,292,014
distributions from net
interest income
Cost of shares redeemed (953,199,995) (887,072,623)
NET INCREASE (DECREASE) IN 37,536,777 31,470,366
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) 37,569,519 31,471,849
IN NET ASSETS
NET ASSETS
Beginning of period 452,877,639 421,405,790
End of period $ 490,447,158 $ 452,877,639
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .013 .031 .032 .031 .035
Operations Net interest
income
Less Distributions
From net interest income (.013) (.031) (.032) (.031) (.035)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 1.35% 3.17% 3.29% 3.17% 3.57%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 490,447 $ 452,878 $ 421,406 $ 402,278 $ 363,396
(000 omitted)
Ratio of expenses to average .50% A .50% .50% .50% .50%
net assets
Ratio of expenses to average .44% A, E .48% E .49% E .47% E .50%
net assets after expense
reductions
Ratio of net interest income 2.72% A 3.13% 3.21% 3.15% 3.52%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .024
Operations Net interest
income
Less Distributions
From net interest income (.024)
Net asset value, end of $ 1.000
period
TOTAL RETURN B, C 2.47%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 337,530
(000 omitted)
Ratio of expenses to average .46% D
net assets
Ratio of expenses to average .46%
net assets after expense
reductions
Ratio of net interest income 2.43%
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Florida Municipal Income Fund (the income fund) is a fund of
Fidelity Court Street Trust. Spartan Florida Municipal Money Market
Fund (the money market fund) is a fund of Fidelity Court Street Trust
II. Each trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment
company. Fidelity Court Street Trust and Fidelity Court Street Trust
II (the trusts) are organized as a Massachusetts business trust and a
Delaware business trust, respectively. Each fund is authorized to
issue an unlimited number of shares. The financial statements have
been prepared in conformity with generally accepted accounting
principles which require management to make certain estimates and
assumptions at the date of the financial statements. Each fund may be
affected by economic and political developments in the state of
Florida. The following summarizes the significant accounting policies
of the income fund and the money 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 market discount
represents unrealized gain until realized at the time of a security
disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
futures 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
basis 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc. (FIMM), 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. With
respect to purchase commitments, each fund identifies securities as
segregated in its records with a value at least equal to the amount of
the commitment. Losses may
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
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.
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 $66,197,523 and $53,758,026, respectively.
The market value of futures contracts opened and closed during the
period amounted to $5,206,510 and $11,490,878, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays all
expenses, except the compensation of the non-interested Trustees and
certain exceptions such as interest, taxes, brokerage commissions and
extraordinary expenses. FMR receives a fee that is computed daily at
an annual rate of .55% and .50% of average net assets for the income
and money market funds, respectively.
FMR also bears the cost of providing shareholder services to the money
market fund. To offset the cost of providing these services, FMR or
its affiliates collected certain transaction fees from shareholders
which amounted to $2,304 for the period.
SUB-ADVISER FEE. As the income (effective January 1, 1999) and the
money market funds' investment sub-adviser, FIMM, 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market fund, along with other money market funds
advised by FMR or its affiliates, has entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company, effective January 1, 1999. FIDFUNDS provides
limited coverage for certain loss events including issuer default as
to payment of principal or interest and bankruptcy or insolvency of a
credit enhancement provider. The insurance does not cover losses
resulting from changes in interest rates, ratings downgrades or other
market conditions. The money market fund may be subject to a special
assessment of up to approximately 2.5 times the fund's annual gross
premium if covered losses exceed certain levels. During the period,
FMR has borne the cost of the fund's premium payable to FIDFUNDS.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund 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 funds' expenses. During the period, the income and
money market funds' expenses were reduced by $15,716 and $187,825,
respectively, under these arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone 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
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Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
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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
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1400 Civic Drive
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6300 Canoga Avenue
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COLORADO
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CONNECTICUT
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2401 PGA Boulevard
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8065 Beneva Road
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GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
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1700 East Golf Road
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3232 Lake Avenue
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INDIANA
4729 East 82nd Street
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MAINE
3 Canal Plaza
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MARYLAND
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470 Boylston Street
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155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
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44 Mall Road
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416 Belmont Street
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MICHIGAN
280 North Woodward Ave.
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29155 Northwestern Hwy.
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MINNESOTA
7600 France Avenue South
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MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
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200 North Broadway
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NEW JERSEY
150 Essex Street
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56 South Street
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501 Route 17, South
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NEW YORK
1055 Franklin Avenue
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999 Walt Whitman Road
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1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
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NORTH CAROLINA
4611 Sharon Road
Charlotte, 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
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TEXAS
10000 Research Boulevard
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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
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
Fidelity Investments
Money Management, Inc. (FIMM),
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
Matthew N. Karstetter, Deputy 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 *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
GENERAL DISTRIBUTOR
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and
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SPARTAN(REGISTERED TRADEMARK)
CONNECTICUT MUNICIPAL
FUNDS
AND
FIDELITY
CONNECTICUT MUNICIPAL
MONEY MARKET FUND
SEMIANNUAL REPORT
MAY 31, 1999
CONTENTS
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
31 FINANCIAL STATEMENTS
FIDELITY CONNECTICUT
MUNICIPAL MONEY MARKET FUND
35 PERFORMANCE
37 FUND TALK: THE MANAGER'S
OVERVIEW
39 INVESTMENT CHANGES
40 INVESTMENTS
45 FINANCIAL STATEMENTS
NOTES 49 NOTES TO THE FINANCIAL
STATEMENTS
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other 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.
(recycle logo)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:
After its first-ever close above 11,000 on the first trading day of
May, the Dow Jones Industrial Average dropped over 450 points by
month's end. The Federal Reserve Board's shift in bias toward raising
rates to ward off inflation contributed to the decline. Government
securities followed a similar path during May, as expectations of an
eventual boost in interest rates drove the price of the bellwether
30-year Treasury consistently downwards.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN CT MUNICIPAL INCOME 0.45% 3.98% 37.90% 98.56%
LB Connecticut 4 Plus Year 0.85% 4.67% 41.43% n/a
Enhanced Municipal Bond
Connecticut Municipal Debt 0.41% 3.82% 35.97% 97.40%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 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
Inc. The past six months average represents a peer group of 28 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN CT MUNICIPAL INCOME 3.98% 6.64% 7.10%
LB Connecticut 4 Plus Year 4.67% 7.18% n/a
Enhanced Municipal Bond
Connecticut Municipal Debt 3.82% 6.34% 7.04%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a 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
1989/05/31 10000.00 10000.00
1989/06/30 10167.17 10135.80
1989/07/31 10277.55 10273.75
1989/08/31 10169.21 10173.17
1989/09/30 10138.83 10142.85
1989/10/31 10259.07 10266.90
1989/11/30 10410.47 10446.57
1989/12/31 10477.72 10532.02
1990/01/31 10384.84 10482.21
1990/02/28 10479.24 10575.50
1990/03/31 10497.52 10578.67
1990/04/30 10333.65 10502.08
1990/05/31 10590.68 10731.34
1990/06/30 10698.28 10825.67
1990/07/31 10857.45 10984.81
1990/08/31 10662.23 10825.31
1990/09/30 10731.16 10831.48
1990/10/31 10893.09 11027.96
1990/11/30 11128.06 11249.73
1990/12/31 11178.85 11298.67
1991/01/31 11302.91 11450.30
1991/02/28 11374.07 11549.92
1991/03/31 11392.27 11554.07
1991/04/30 11537.06 11707.74
1991/05/31 11639.36 11811.82
1991/06/30 11549.39 11800.13
1991/07/31 11686.48 11943.86
1991/08/31 11813.45 12101.16
1991/09/30 11919.39 12258.71
1991/10/31 12036.89 12369.04
1991/11/30 12065.88 12403.55
1991/12/31 12361.57 12669.73
1992/01/31 12380.36 12698.62
1992/02/29 12386.47 12702.68
1992/03/31 12329.86 12707.38
1992/04/30 12395.03 12820.48
1992/05/31 12564.78 12971.38
1992/06/30 12812.32 13189.04
1992/07/31 13211.56 13584.44
1992/08/31 13024.57 13451.99
1992/09/30 13113.74 13539.97
1992/10/31 12890.25 13406.87
1992/11/30 13238.31 13646.99
1992/12/31 13377.44 13786.33
1993/01/31 13576.92 13946.66
1993/02/28 14128.94 14451.11
1993/03/31 13936.69 14298.36
1993/04/30 14065.14 14442.63
1993/05/31 14147.40 14523.80
1993/06/30 14398.01 14766.20
1993/07/31 14419.33 14785.55
1993/08/31 14746.39 15093.38
1993/09/30 14925.22 15265.30
1993/10/31 14933.20 15294.76
1993/11/30 14802.01 15160.01
1993/12/31 15113.52 15480.04
1994/01/31 15288.42 15656.82
1994/02/28 14867.82 15251.31
1994/03/31 14191.37 14630.28
1994/04/30 14313.29 14754.34
1994/05/31 14398.58 14882.26
1994/06/30 14309.17 14791.33
1994/07/31 14596.37 15062.46
1994/08/31 14629.21 15114.57
1994/09/30 14388.83 14892.69
1994/10/31 14068.34 14628.20
1994/11/30 13675.88 14363.72
1994/12/31 14053.19 14679.86
1995/01/31 14502.91 15099.41
1995/02/28 14946.32 15538.50
1995/03/31 15105.90 15717.04
1995/04/30 15123.17 15735.59
1995/05/31 15593.64 16237.71
1995/06/30 15453.33 16096.44
1995/07/31 15541.90 16249.04
1995/08/31 15758.19 16455.07
1995/09/30 15885.21 16559.24
1995/10/31 16087.04 16800.01
1995/11/30 16330.13 17078.72
1995/12/31 16459.18 17242.85
1996/01/31 16602.71 17373.03
1996/02/29 16521.58 17255.76
1996/03/31 16298.14 17035.23
1996/04/30 16263.96 16987.02
1996/05/31 16232.67 16980.23
1996/06/30 16437.51 17165.14
1996/07/31 16569.09 17321.34
1996/08/31 16550.55 17317.19
1996/09/30 16757.74 17559.63
1996/10/31 16951.89 17758.23
1996/11/30 17252.00 18083.20
1996/12/31 17156.58 18007.25
1997/01/31 17216.05 18041.29
1997/02/28 17361.12 18206.91
1997/03/31 17124.73 17964.21
1997/04/30 17259.61 18114.57
1997/05/31 17491.27 18387.01
1997/06/30 17673.55 18582.83
1997/07/31 18190.70 19097.58
1997/08/31 17994.80 18918.63
1997/09/30 18226.70 19143.20
1997/10/31 18334.17 19266.29
1997/11/30 18438.50 19379.57
1997/12/31 18723.75 19662.32
1998/01/31 18914.31 19865.24
1998/02/28 18901.57 19871.20
1998/03/31 18895.17 19888.68
1998/04/30 18820.82 19798.99
1998/05/31 19096.96 20112.40
1998/06/30 19154.65 20191.65
1998/07/31 19180.71 20242.33
1998/08/31 19475.44 20555.07
1998/09/30 19735.28 20811.19
1998/10/31 19710.20 20810.77
1998/11/30 19766.93 20883.82
1998/12/31 19810.35 20936.45
1999/01/31 20111.29 21185.38
1999/02/28 19956.56 21092.80
1999/03/31 19947.39 21122.12
1999/04/30 20005.08 21174.71
1999/05/28 19856.12 21052.11
IMATRL PRASUN SHR__CHT 19990531 19990611 104513 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Connecticut Municipal Income Fund on May 31, 1989.
As the chart shows, by May 31, 1999, the value of the investment would
have grown to $19,856 - a 98.56% 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 $21,052 - a 110.52% 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
1999 1998 1997 1996 1995 1994
Dividend returns 2.27% 4.92% 5.19% 5.29% 6.62% 5.28%
Capital returns -1.82% 2.28% 1.69% 0.36% 12.79% -12.89%
Total returns 0.45% 7.20% 6.88% 5.65% 19.41% -7.61%
</TABLE>
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.
DIVIDENDS AND YIELD
PERIODS ENDED MAY 31, 1999 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.47(cents) 26.31(cents) 53.11(cents)
Annualized dividend rate 4.63% 4.59% 4.61%
30-day annualized yield 4.04% - -
30-day annualized 6.61% - -
tax-equivalent yield
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 $11.37 over the past one
month, $11.50 over the past six months and $11.51 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 1999
federal and state income tax bracket, but does not reflect the payment
of the federal alternative minimum tax, if applicable.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Despite a continued decline in new
issues that helped create a stable
supply and demand environment
for municipal bonds, the market for
municipal securities deteriorated
during the six-month period that
ended May 31, 1999. During this
time, the Lehman Brothers Municipal
Bond Index - an index of
approximately 50,000
investment-grade, fixed-rate
tax-exempt bonds - returned
0.81%. In comparison, the Lehman
Brothers Aggregate Bond Index -
a widely followed measure of
taxable bond performance -
declined 0.76% during the same
period. While municipal bonds
outperformed taxable bonds over
the six-month period, the municipal
market struggled as investors
anticipated that interest rates may
increase in an effort to slow the
booming U.S. economy and fight the
threat of inflation. Although there is
no consistent agreement among
economists that the Federal Reserve
Board will increase interest rates at
its next meeting, yields - which
move in the opposite direction of
prices - increased during the
period, causing municipal securities
to trade lower. Late in the period,
investors sold bonds in response to a
stronger-than-expected
consumer-price index in April. After
the Federal Reserve Board's policy
meeting in early May, municipal
bonds came under further pressure
as the Fed shifted its bias toward
tighter monetary policy and higher
interest rates, although it did not
raise rates at that time.
(photograph of George Fischer)
An interview with George Fischer, Portfolio Manager of Spartan
Connecticut Municipal Income Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the six-month period that ended May 31, 1999, the fund had a
total return of 0.45%. To get a sense of how the fund did relative to
its competitors, the Connecticut municipal debt funds average returned
0.41% for the same six-month period, according to Lipper Inc.
Additionally, the Lehman Brothers Connecticut 4 Plus Year Enhanced
Municipal Bond Index - which tracks the types of securities in which
the fund invests - returned 0.85% for the same six-month period. For
the 12-month period that ended May 31, 1999, the fund had a total
return of 3.98%. That compared to the Connecticut municipal debt funds
average's 3.82% return and the Lehman Brothers index's 4.67% return
for the same 12-month period.
Q. WHAT SECURITIES HELPED GIVE THE FUND A SLIGHT PERFORMANCE EDGE OVER
ITS PEERS DURING THE PAST SIX MONTHS?
A. The fund's performance benefited from the advance refunding of
bonds issued by Sacred Heart University and Quinnipiac College.
Through a somewhat complex process that involves issuing new debt at
lower interest rates to retire older, more expensive debt, the advance
refunding of those bonds helped boost their performance.
Q. WERE THERE OTHER POSITIVES FOR THE FUND'S SIX-MONTH PERFORMANCE?
A. The way in which I managed the fund's duration - its sensitivity to
changing interest rates - also was a modest contributor to its
outperformance relative to its peers. When interest rates moved
substantially higher - instead of lower - from January through May,
funds with relatively long durations generally suffered the most.
Rather than trying to predict the direction of interest rates, I
manage the fund to have a duration that approximates that of the
municipal market, as measured by the Lehman Brothers Connecticut 4
Plus Year Municipal Bond Index. By doing so, I avoided the potential
underperformance that could have occurred if the fund's duration was
too long when interest rates rose.
Q. ALTHOUGH NEARLY ALL MUNICIPAL BONDS CAME UNDER PRESSURE WHEN RATES
ROSE FROM DECEMBER THROUGH THE END OF MAY, WERE THERE ANY BONDS THAT
WERE PARTICULARLY DISAPPOINTING DURING THAT PERIOD?
A. Intermediate-term bonds - with maturities of between five and 15
years - didn't perform as well as I had hoped. They suffered at the
hands of weaker demand from insurance companies, hedge funds and
pension companies. Despite their recent disappointing performance, I
continued to emphasize intermediate bonds because I felt they offered
the best combination of reward - or income - for the risk. For bonds
with maturities of 15 years or longer, the extra income for each
successive year was not, in my opinion, attractive given the level of
risk inherent in longer-term bonds.
Q. WHAT OTHER TYPES OF BONDS DID YOU CHOOSE TO EMPHASIZE?
A. I continued to favor premium coupon bonds, which carry interest
rates higher than prevailing interest rates. Premiums, as they're
known, are attractive for a couple of reasons. First, they're more
likely than discount bonds - which carry interest rates below
prevailing rates - to be advance refunded, a process that generally is
positive for their prices. Second, premium bonds are immunized from
the price performance that can hurt discount bonds when interest rates
are rising.
Q. GEORGE, WHAT FACTORS WILL SHAPE THE MUNICIPAL MARKET'S PERFORMANCE
OVER THE NEXT SIX MONTHS?
A. Obviously, the direction of interest rates will be the primary
determinant of municipal bond performance. But other factors - namely
supply and demand - will play a role. If interest rates remain stable
or move higher, I would expect the supply of municipals to taper off
as issuers slow down their refinancing and new issuance activity. A
bigger unknown is demand. Even after gaining some ground on them,
municipals remain relatively cheap alternatives to U.S. Treasuries. To
the extent that investors seek out that value, municipals will
benefit.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
FUND FACTS
GOAL: to provide high current
tax-free income for
Connecticut residents
FUND NUMBER: 407
TRADING SYMBOL: FICNX
START DATE: October 29,
1987
SIZE: as of May 31, 1999,
more than $372 million
MANAGER: George Fischer,
since 1996; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
GEORGE FISCHER ON Y2K AND
ITS POTENTIAL EFFECTS ON
MUNICIPAL BOND ISSUERS:
"The `Y2K bug' may pose problems
for some municipal issuers. At this
point, however, it's unclear how
many or to what magnitude
issuers will be affected, if at all.
That's why Fidelity's research
team - in its routine security
selection process - monitors
municipal issuers' Y2K
preparedness, among many other
factors. We're attempting to
ascertain how vulnerable a given
issuer thinks it is and what
potential fixes it has planned in
the event of problems. How
successful issuers are in
preparing for and dealing with
problems ultimately may affect
their creditworthiness."
(solid bullet) At the end of the period, bonds
issued by Puerto Rico made up
7.6% of the fund's investments.
As a territory of the United States,
Puerto Rico 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 municipal supply in
Connecticut has been somewhat
limited for the past couple of years,
the manager bought
higher-yielding Puerto Rico bonds.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
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<S> <C> <C>
TOP FIVE SECTORS AS OF MAY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO
General Obligations 38.2 36.4
Health Care 13.5 11.2
Special Tax 12.8 12.9
Escrowed/Pre-Refunded 9.8 10.2
Water & Sewer 8.4 7.3
AVERAGE YEARS TO MATURITY AS
OF MAY 31, 1999
6 MONTHS AGO
Years 11.9 12.0
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF MAY 31, 1999
6 MONTHS AGO
Years 6.5 6.4
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION
(MOODY'S RATINGS)
AS OF MAY 31, 1999
Aaa 64.6%
Aa, A 27.9%
Baa 7.5%
Short-term
investments 0.0%
Row: 1, Col: 1, Value: 64.59999999999999
Row: 1, Col: 2, Value: 27.9
Row: 1, Col: 3, Value: 7.5
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: nil
Row: 1, Col: 6, Value: nil
AS OF NOVEMBER 30, 1998
Aaa 66.5%
Aa, A 24.1%
Baa 9.3%
Short-term
investments 0.1%
Row: 1, Col: 1, Value: 65.5
Row: 1, Col: 2, Value: 24.1
Row: 1, Col: 3, Value: 9.300000000000001
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 5, Value: nil
Row: 1, Col: 6, Value: nil
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P (registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 100.0%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - 92.4%
Branford Gen. Oblig.:
7% 6/15/08 (FGIC Insured) Aaa $ 500,000 $ 593,355
7% 6/15/09 (FGIC Insured) Aaa 500,000 597,165
Bridgeport Gen. Oblig.:
Rfdg. Series A:
6% 9/1/03 (AMBAC Insured) Aaa 4,475,000 4,837,072
6% 9/1/05 (AMBAC Insured) Aaa 4,000,000 4,402,720
6.5% 9/1/07 (AMBAC Insured) Aaa 2,290,000 2,628,416
Series A, 5.7% 9/1/15 (AMBAC Aaa 1,500,000 1,635,645
Insured) (Pre-Refunded to
9/1/05 @ 101) (d)
8.75% 8/15/05 (FGIC Insured) Aaa 670,000 834,813
Connecticut Clean Wtr. Fund
Rev.:
Rfdg. 5.25% 7/15/11 Aa1 3,000,000 3,124,650
5.125% 9/1/12 Aaa 2,000,000 2,058,880
5.75% 3/1/07 Aaa 2,615,000 2,868,080
5.875% 5/1/04 Aaa 1,000,000 1,083,880
6% 10/1/12 (b) Aaa 6,000,000 6,664,140
6.8% 7/1/05 Aaa 1,000,000 1,066,720
7% 1/1/11 Aaa 2,500,000 2,670,400
Connecticut Dev. Auth. Health A2 3,000,000 3,222,150
Care Proj. Rfdg. (Duncaster,
Inc. Proj.) 6.75% 9/1/15
Connecticut Dev. Auth. Rev.
Series A:
4.75% 11/15/13 A1 1,525,000 1,491,831
6% 11/15/07 A1 1,525,000 1,693,696
6% 11/15/08 A1 1,525,000 1,700,055
6% 11/15/09 A1 1,525,000 1,699,963
Connecticut Gen. Oblig.:
(Cap. Appreciation) (College
Savings Plan):
Series A, 0% 5/15/07 Aa3 2,250,000 1,589,085
Series B 0% 11/1/06 Aa3 2,800,000 2,046,716
Series B, 0% 11/1/09 Aa3 7,000,000 4,373,250
Rfdg. Series A, 5.25% 3/15/11 Aa3 3,000,000 3,138,000
Series A:
6% 3/15/01 Aa3 5,405,000 5,617,254
6% 3/1/06 Aa3 2,700,000 2,989,332
6.1% 3/15/02 Aa3 3,000,000 3,176,340
7% 3/15/03 Aa3 3,000,000 3,319,500
Series B, 6% 10/1/05 Aa3 6,430,000 7,096,405
Series D, 5.25% 12/15/15 Aa3 5,240,000 5,384,152
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl.
Facilities Auth. Rev.:
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa $ 1,750,000 $ 1,835,820
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,386,826
(Connecticut College) Issue Aaa 1,200,000 1,292,028
B, 6.625% 7/1/11 (MBIA
Insured) (Pre-Refunded to
7/1/01 @ 102) (d)
(Greenwich Hosp.) Series A, Aaa 5,400,000 5,713,254
5.8% 7/1/26 (MBIA Insured)
(Hebrew Home & Hosp.) Series B:
5.15% 8/1/28 AAA 2,500,000 2,426,875
5.2% 8/1/38 AAA 4,190,000 4,055,166
(Kent School) Series B:
5.1% 7/1/07 (MBIA Insured) Aaa 265,000 276,493
5.25% 7/1/08 (MBIA Insured) Aaa 305,000 319,478
5.375% 7/1/09 (MBIA Insured) Aaa 345,000 362,523
5.4% 7/1/10 (MBIA Insured) Aaa 685,000 718,079
(Loomis Chaffee School) Aaa 1,430,000 1,466,165
Series C, 5.5% 7/1/26 (MBIA
Insured)
(Lutheran Gen. Health Care Aaa 3,195,000 3,878,155
Sys.) 7.375% 7/1/19
(Escrowed to Maturity) (d)
(Masonicar Proj.) Series A, Aaa 2,400,000 2,329,896
5% 7/1/20 (AMBAC Insured)
(New Britain Memorial Hosp.) AAA 6,500,000 7,354,620
Series A, 7.75% 7/1/22
(Pre-Refunded to 7/1/02 @
102) (d)
(Quinnipiac College) Series BBB- 1,940,000 2,069,553
C, 7.75% 7/1/20
(Pre-Refunded to 7/1/00 @
102) (d)
(Sacred Heart Univ.):
Series A, 6.85% 7/1/22, LOC Baa3 1,000,000 1,102,500
Fleet Nat'l. Bank,
Providence (Pre-Refunded to
7/1/02 @ 102) (d)
Series B, 5.5% 7/1/09 Baa3 1,500,000 1,607,595
(Pre-Refunded to 7/1/03 @
102) (d)
Series C:
6% 7/1/06 Baa3 60,000 64,051
6% 7/1/06 (Escrowed to Baa3 190,000 209,768
Maturity) (d)
6.5% 7/1/16 Baa3 980,000 1,071,267
6.5% 7/1/16 (Pre-Refunded to Baa3 3,020,000 3,450,350
7/1/06 @ 102) (d)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (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 $ 507,632
7/1/01 @ 103) (d)
9% 7/1/13 (Pre-Refunded to AAA 1,300,000 1,471,522
7/1/01 @ 103) (d)
9.2% 7/1/21 (Pre-Refunded to AAA 1,500,000 1,703,850
7/1/01 @ 103) (d)
(Stamford Hosp.) Series G, 5% Aaa 2,500,000 2,410,175
7/1/24 (MBIA Insured)
(Veterans Memorial Med. Ctr.)
Series A:
5.5% 7/1/26 (MBIA Insured) Aaa 2,275,000 2,332,535
6.25% 7/1/05 (MBIA Insured) Aaa 2,265,000 2,502,485
(Yale Univ.) 5.929% 6/10/30 Aaa 10,000,000 10,575,200
Rfdg.:
(Choate Rosemary Hall) Series Aaa 3,000,000 2,882,340
B, 5% 7/1/27 (MBIA Insured)
(Hosp. for Spl. Care) Issue B:
5.375% 7/1/17 Baa2 2,700,000 2,636,982
5.5% 7/1/27 Baa2 2,500,000 2,437,400
(Quinnipiac College) Series D:
6% 7/1/13 BBB- 1,300,000 1,348,230
6% 7/1/13 (Pre-Refunded to BBB- 2,200,000 2,398,792
7/1/03 @ 102) (d)
6% 7/1/23 BBB- 575,000 591,807
6% 7/1/23 (Pre-Refunded to BBB- 1,400,000 1,526,504
7/1/03 @ 102) (d)
(Saint Raphael Hosp.) Series H:
5.25% 7/1/14 (AMBAC Insured) Aaa 4,400,000 4,538,116
6.5% 7/1/11 (AMBAC Insured) Aaa 2,780,000 3,216,849
6.5% 7/1/13 (AMBAC Insured) Aaa 3,125,000 3,642,563
(Yale Univ.) Series H, 6% Aaa 1,000,000 1,073,670
7/1/03 (MBIA Insured)
Connecticut Higher Ed.
Supplemental Ln. Auth. Rev.:
(Family Ed. Ln. Prog.) Series A 745,000 781,252
A, 7.2% 11/15/10 (c)
Series A:
7.375% 11/15/05 (c) A1 440,000 450,978
7.5% 11/15/10 (c) A1 1,500,000 1,538,250
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Hsg. Fin. Auth.
(Hsg. Mtg. Fin. Prog.):
Series A, 6.45% 5/15/22 (c) Aa2 $ 2,400,000 $ 2,439,000
Series B, 6.2% 5/15/12 Aa2 2,500,000 2,641,100
Series E, 6.2% 5/15/14 Aa2 1,000,000 1,063,990
Connecticut Muni. Elec.
Energy Coop. Pwr. Supply
Sys. Rev. Rfdg. Series A:
5% 1/1/05 (MBIA Insured) Aaa 1,200,000 1,245,756
6% 1/1/04 (MBIA Insured) Aaa 3,190,000 3,440,670
6% 1/1/05 (MBIA Insured) Aaa 3,380,000 3,675,378
6% 1/1/06 (MBIA Insured) Aaa 2,000,000 2,190,420
Connecticut Resources
Recovery Auth. Rev. Rfdg.:
(Fuel Co.) Series A, 5.5% Aaa 2,000,000 2,123,280
11/15/09 (MBIA Insured) (c)
(Mid-Connecticut Sys.) Series
A:
5.25% 11/15/08 (MBIA Insured) Aaa 4,000,000 4,233,240
5.375% 11/15/10 (MBIA Insured) Aaa 1,000,000 1,049,750
5.5% 11/15/11 (MBIA Insured) Aaa 2,500,000 2,628,500
Connecticut Spl. Tax Oblig.
Rev.:
(Cap. Appreciation) (Trans. A1 3,500,000 2,324,665
Infrastructure) Series B, 0%
6/1/08
(Trans. Infrastructure):
Series A:
5.5% 11/1/06 (FSA Insured) Aaa 1,925,000 2,067,797
6.75% 6/1/11 (Pre-Refunded to AAA 2,395,000 2,642,427
6/1/03 @ 100) (d)
7.125% 6/1/10 A1 3,550,000 4,244,309
Series B:
5.25% 11/1/14 (FSA Insured) Aaa 6,300,000 6,460,650
6.125% 9/1/12 A1 5,000,000 5,632,550
6.15% 9/1/09 A1 1,500,000 1,688,850
6.5% 10/1/07 A1 2,250,000 2,573,505
6.5% 10/1/10 A1 3,250,000 3,742,603
6.5% 10/1/12 A1 7,100,000 8,284,067
Rfdg. (Trans. Infrastructure) A1 2,500,000 2,622,575
Series A, 5.125% 9/1/05
Eastern Connecticut Resources BBB+ 1,000,000 1,005,210
Recovery Auth. Solid Waste
Rev. (Wheelabrator Lisbon
Proj.) Series A, 5% 1/1/04
(c)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Hartford Gen. Oblig.:
5% 11/15/10 (FGIC Insured) Aaa $ 1,385,000 $ 1,422,173
5% 11/15/13 (FGIC Insured) Aaa 1,425,000 1,441,658
Meriden Gen. Oblig.:
6.25% 8/1/05 (FGIC Insured) Aaa 2,000,000 2,225,940
6.25% 8/1/06 (FGIC Insured) Aaa 2,000,000 2,244,720
7% 10/1/07 (MBIA Insured) Aaa 500,000 589,925
Naugatuck Gen. Oblig.:
6.9% 6/15/07 (FGIC Insured) Aaa 485,000 568,197
7.25% 9/1/04 (MBIA Insured) Aaa 215,000 246,599
7.4% 9/1/07 (MBIA Insured) Aaa 370,000 446,131
7.4% 9/1/08 (MBIA Insured) Aaa 370,000 451,489
New Britain Gen. Oblig.:
Rfdg. 6% 2/1/12 (MBIA Insured) Aaa 400,000 447,852
Series B, 6% 3/1/12 (MBIA Aaa 2,000,000 2,240,420
Insured)
5% 2/1/12 (MBIA Insured) Aaa 885,000 907,258
5% 2/1/13 (MBIA Insured) Aaa 885,000 903,204
6% 4/15/06 (AMBAC Insured) Aaa 1,615,000 1,781,700
6% 4/15/07 (AMBAC Insured) Aaa 1,615,000 1,791,083
7% 4/1/07 (MBIA Insured) Aaa 580,000 679,018
7% 4/1/08 (MBIA Insured) Aaa 580,000 686,227
New Haven Gen. Oblig.:
Rfdg. Series A:
5% 8/1/09 (FGIC Insured) Aaa 1,775,000 1,826,617
6% 8/1/05 (FGIC Insured) Aaa 3,410,000 3,749,261
Series A, 7.4% 3/1/12 Baa1 1,000,000 1,110,940
(Pre-Refunded to 3/1/02 @
102) (d)
6% 2/15/05 (FGIC Insured) Aaa 1,650,000 1,803,104
7% 2/15/03 (FGIC Insured) Aaa 1,000,000 1,102,870
7% 2/15/04 (FGIC Insured) Aaa 1,150,000 1,290,772
7% 2/15/05 (FGIC Insured) Aaa 1,250,000 1,425,475
8.25% 8/15/01 A3 1,900,000 1,989,395
Newtown Gen. Oblig.:
6% 6/15/05 (MBIA Insured) Aaa 1,700,000 1,866,090
6% 6/15/06 (MBIA Insured) Aaa 1,700,000 1,879,248
North Thompsonville Fire
District #10:
6.75% 6/1/07 (MBIA Insured) Aaa 180,000 208,024
6.75% 6/1/08 (MBIA Insured) Aaa 190,000 221,557
6.75% 6/1/09 (MBIA Insured) Aaa 200,000 234,594
6.75% 6/1/10 (MBIA Insured) Aaa 215,000 253,251
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
North Thompsonville Fire
District #10: - continued
6.75% 6/1/11 (MBIA Insured) Aaa $ 230,000 $ 272,336
South Central Connecticut
Reg'l. Wtr. Auth. Wtr. Sys.
Rev. Series 11:
5.625% 8/1/05 (FGIC Insured) Aaa 5,000,000 5,337,050
5.75% 8/1/12 (FGIC Insured) Aaa 5,000,000 5,334,900
Stamford Gen. Oblig.:
Rfdg.:
5.25% 7/15/10 Aaa 5,000,000 5,248,500
5.25% 7/15/12 Aaa 1,580,000 1,639,408
6.25% 2/15/03 Aaa 1,725,000 1,864,535
6.25% 2/15/04 Aaa 1,725,000 1,890,617
6.25% 2/15/05 Aaa 535,000 592,807
6.25% 2/15/05 (Escrowed to Aaa 1,190,000 1,313,701
Maturity) (d)
6.6% 1/15/07 Aaa 295,000 338,698
6.6% 1/15/08 Aaa 1,480,000 1,715,231
6.6% 1/15/09 Aaa 1,000,000 1,167,970
Stamford Hsg. Auth. A3 6,000,000 5,808,900
Multifamily Rev. Rfdg.
(Fairfield Apts. Proj.)
4.75%, tender 12/1/08 (c)
Stratford Gen. Oblig. 7% Aaa 500,000 593,355
6/15/08 (FGIC Insured)
Univ. of Connecticut Series Aaa 3,070,000 3,277,379
A, 5.5% 2/1/06 (FGIC Insured)
West Hartford Gen. Oblig.:
5% 7/15/11 Aaa 2,000,000 2,044,280
6.5% 7/15/05 Aaa 2,000,000 2,257,060
6.5% 7/15/06 Aaa 2,000,000 2,280,480
West Haven Gen. Oblig. 6.7% Aaa 710,000 789,492
2/15/04 (MBIA Insured)
Wolcott Gen. Oblig.:
7% 6/15/09 (FGIC Insured) Aaa 445,000 531,477
7% 6/15/10 (FGIC Insured) Aaa 440,000 530,864
Woodstock Spl. Oblig. Rev. Aaa 725,000 762,294
(Woodstock Academy) 7%
3/1/08 (AMBAC Insured)
333,807,677
PUERTO RICO - 7.6%
Puerto Rico Commonwealth Hwy. Baa1 1,750,000 1,893,833
& Trans. Auth. Hwy. Rev.
Rfdg. Series V, 6.625% 7/1/12
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth
Infrastructure Fing. Auth.
Spl. Tax Rev.:
Rfdg. Series A, 5.25% 7/1/10 Aaa $ 11,065,000 $ 11,669,701
(AMBAC Insured)
Series A, 5% 7/1/28 (AMBAC Aaa 6,500,000 6,288,295
Insured)
Puerto Rico Commonwealth Pub. Baa1 2,500,000 2,621,075
Impt. 5.25% 7/1/10
Puerto Rico Elec. Pwr. Auth. Aaa 3,500,000 3,646,265
Pwr. Rev. Series AA, 5.375%
7/1/14 (MBIA Insured)
Puerto Rico Ind. Med. & Aa3 1,285,000 1,399,172
Envir. Poll. Cont.
Facilities Fing. Auth. Rev.
(Motorola, Inc. Proj.)
Series A, 6.75% 1/1/14
27,518,341
TOTAL INVESTMENT IN $ 361,326,018
SECURITIES - 100%
(Cost $343,233,587)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)
PURCHASED
40 U.S. Treasury Bonds Sept. 1999 $ 4,698,750 $ (6,490)
</TABLE>
The face value of futures purchased as a percentage of investment in
securities - 1.3%
LEGEND
(a) Standard & Poor's(registered trademark) credit ratings are used in
the absence of a rating by Moody's Investors Service, Inc.
(b) 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 $505,364.
(c) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(d) 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 86.9% AAA, AA, A 88.6%
Baa 5.0% BBB 7.8%
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 38.2%
Health Care 13.5
Special Tax 12.8
Escrowed/Pre-Refunded 9.8
Water & Sewer 8.4
Education 6.2
Others (individually less 11.1
than 5%)
100.0%
INCOME TAX INFORMATION
At May 31, 1999, the aggregate cost of investment securities for
income tax purposes was $343,233,587. Net unrealized appreciation
aggregated $18,092,431, of which $19,199,556 related to appreciated
investment securities and $1,107,125 related to depreciated investment
securities.
At November 30, 1998 the fund was required to defer approximately
$1,615,000 of losses on futures contracts.
SPARTAN CONNECTICUT MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 361,326,018
value (cost $343,233,587) -
See accompanying schedule
Cash 4,870,616
Receivable for investments 1,084,276
sold
Receivable for fund shares 9,000
sold
Interest receivable 5,833,743
Redemption fees receivable 980
TOTAL ASSETS 373,124,633
LIABILITIES
Payable for fund shares $ 319,481
redeemed
Distributions payable 399,320
Accrued management fee 174,649
Payable for daily variation 6,490
on futures contracts
Other payables and accrued 4,208
expenses
TOTAL LIABILITIES 904,148
NET ASSETS $ 372,220,485
Net Assets consist of:
Paid in capital $ 354,307,574
Accumulated undistributed net (173,030)
realized gain (loss) on
investments
Net unrealized appreciation 18,085,941
(depreciation) on investments
NET ASSETS, for 32,870,506 $ 372,220,485
shares outstanding
NET ASSET VALUE, offering $11.32
price and redemption price
per share ($372,220,485
(divided by) 32,870,506
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 9,604,342
EXPENSES
Management fee $ 1,031,905
Non-interested trustees' 589
compensation
Total expenses before 1,032,494
reductions
Expense reductions (70,491) 962,003
NET INTEREST INCOME 8,642,339
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,545,826
Futures contracts (100,816) 1,445,010
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (8,182,665)
Futures contracts (6,490) (8,189,155)
NET GAIN (LOSS) (6,744,145)
NET INCREASE (DECREASE) IN $ 1,898,194
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions:
Custodian credits $ 69,769
Transfer agent credits 722
$ 70,491
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 8,642,339 $ 16,780,200
Net realized gain (loss) 1,445,010 2,052,603
Change in net unrealized (8,189,155) 5,719,448
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,898,194 24,552,251
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,642,339) (16,780,200)
From net interest income
From net realized gain (1,613,237) (2,984,295)
TOTAL DISTRIBUTIONS (10,255,576) (19,764,495)
Share transactions Net 29,427,170 61,455,356
proceeds from sales of shares
Reinvestment of distributions 7,725,482 15,240,662
Cost of shares redeemed (30,020,626) (49,698,375)
NET INCREASE (DECREASE) IN 7,132,026 26,997,643
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 12,830 14,784
TOTAL INCREASE (DECREASE) (1,212,526) 31,800,183
IN NET ASSETS
NET ASSETS
Beginning of period 373,433,011 341,632,828
End of period $ 372,220,485 $ 373,433,011
OTHER INFORMATION
Shares
Sold 2,556,717 5,348,277
Issued in reinvestment of 672,643 1,327,375
distributions
Redeemed (2,611,065) (4,331,105)
Net increase (decrease) 618,295 2,344,547
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.580 $ 11.420 $ 11.240 $ 11.200 $ 9.960
period
Income from Investment .263 .541 .559 .569 .617
Operations Net interest
income
Net realized and unrealized (.210) .260 .190 .039 1.270
gain (loss)
Total from investment .053 .801 .749 .608 1.887
operations
Less Distributions
From net interest income (.263) (.541) (.559) (.569) (.617)
From net realized gain (.050) (.100) (.010) - (.020)
In excess of net realized - - - - (.010)
gain
Total distributions (.313) (.641) (.569) (.569) (.647)
Redemption fees added to paid .000 .000 .000 .001 .000
in capital
Net asset value, end of $ 11.320 $ 11.580 $ 11.420 $ 11.240 $ 11.200
period
TOTAL RETURN B, C 0.45% 7.20% 6.88% 5.65% 19.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 372,220 $ 373,433 $ 341,633 $ 334,620 $ 358,849
(000 omitted)
Ratio of expenses to average .55% A .55% .55% .55% .55%
net assets
Ratio of expenses to average .51% A, D .54% D .55% .52% D .55%
net assets after expense
reductions
Ratio of net interest income 4.60% A 4.71% 4.98% 5.15% 5.73%
to average net assets
Portfolio turnover rate 25% A 8% 12% 30% 39%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.840
period
Income from Investment .640
Operations Net interest
income
Net realized and unrealized (1.472)
gain (loss)
Total from investment (.832)
operations
Less Distributions
From net interest income (.640)
From net realized gain (.410)
In excess of net realized -
gain
Total distributions (1.050)
Redemption fees added to paid .002
in capital
Net asset value, end of $ 9.960
period
TOTAL RETURN B, C (7.61)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 315,582
(000 omitted)
Ratio of expenses to average .55%
net assets
Ratio of expenses to average .55%
net assets after expense
reductions
Ratio of net interest income 5.83%
to average net assets
Portfolio turnover rate 11%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN CT MUNICIPAL MONEY 1.28% 2.77% 16.18% 27.30%
MARKET
Connecticut Tax-Free Money 1.16% 2.50% 14.96% n/a
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on March 4, 1991. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. To measure how the
fund's performance stacked up against its peers, you can compare it to
the Connecticut tax-free money market funds average, which reflects
the performance of tax-free money market funds with similar objectives
tracked by IBC Financial Data, Inc. The past six months average
represents a peer group of 10 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN CT MUNICIPAL MONEY 2.77% 3.05% 2.97%
MARKET
Connecticut Tax-Free Money 2.50% 2.82% n/a
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
5/31/99 3/1/99 11/30/98 8/31/98 6/1/98
Spartan Connecticut 2.71% 2.38% 2.74% 2.86% 3.30%
Municipal Money Market Fund
Connecticut Tax-Free Money 2.41% 2.15% 2.44% 2.62% 2.97%
Market Funds Average
Spartan Connecticut 4.39% 3.86% 4.44% 4.67% 5.38%
Municipal Money Market
Fund - Tax-equivalent
Portion of fund's income 19.33% 18.84% 20.47% 5.94% 5.98%
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
table 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 1999 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
(photograph of Scott Orr)
An interview with Scott Orr, Portfolio Manager of Spartan Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE SIX MONTHS
THAT ENDED MAY 31, 1999?
A. As the period began, the market remained under the shadow of the
global turmoil that plagued it in the third and early fourth quarter
of 1998. There were a lot of questions about the pace of U.S. economic
growth and the direction of interest rates. However, early in the
period, market participants interpreted some signs to mean that the
economy would sustain the steady growth we've witnessed over the past
year. For example, in December, we saw reports that November's
employment data was stronger than expected. As the month went on, it
became more and more clear that the Federal Reserve Board would
discontinue the rapid-fire interest-rate cuts it had employed to boost
the markets from September through November 1998. Rates crept up from
that point through the end of the period, as market observers tried to
weigh what influence Fed action and emerging economic data might have
on the future course of interest rates.
Q. WHAT HAPPENED MORE RECENTLY, OVER THE LAST THREE MONTHS OF THE
PERIOD?
A. In March and April, data indicated that inflation might not be as
well-behaved as it had been in the recent past. Sentiment shifted from
the expectation that Fed policy was going to be unchanged to one
expecting a Fed rate increase. Such a hike would be employed by the
Fed to curb economic growth and diminish inflationary pressures. By
the end of May, the consensus viewpoint in the market was not "if" the
Fed would raise short-term interest rates, but "when." At its May Open
Market Committee meeting, the Fed added fuel to that fire when it
announced a bias toward raising rates.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. Supply and demand have a significant impact on the Connecticut
municipal money market. In some cases, it can be difficult to maneuver
the fund's average maturity in order to take full advantage of an
anticipated move in interest rates. The fund started the period with a
fairly neutral average maturity of 45 days. From that point, the
maturity trended downward - to the 20s in March and April - because
yields on the few long-term securities available were so low I didn't
feel they offered value to the fund. In other words, when paper became
available, demand was so strong that it pushed yields downward. This
came at a time when I was looking to lock in higher yields that
adequately reflected my expectations for higher interest rates.
Indeed, many of the fund's competitors chose to pay a higher premium
for some of these securities than I was willing to. My patience paid
off, because at the end of the period there was an influx of supply
that helped me lock in higher rates than had been seen in several
months. I extended the fund's maturity to 39 days at the end of 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 will be taxable at the state level this year
because of the out-of-state investments, I pursued this strategy so
the fund could provide higher yields on a tax-adjusted basis than if I
had chosen to invest the same assets in significantly lower-yielding
tax-exempt Connecticut securities.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1999, was 2.71%, compared to
2.74% six months ago. The more recent seven-day yield was the
equivalent of a 4.39% taxable rate of return for Connecticut investors
in the 38.88% combined state and federal income tax bracket, and
reflects that a portion of the fund's income was subject to state
taxes. Through May 31, 1999, the fund's six-month total return was
1.28%, compared to 1.16% for the Connecticut tax-free money market
funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. As of the end of May, the economy remains strong, labor markets are
tight and inflation looks like it might not be as subdued as it has
been. In addition, the Fed has announced its inclination to raise
interest rates to stave off inflationary pressures. I believe the Fed
will make such a move, probably at either its June or August Open
Market Committee meeting. Once the Fed raises rates, it may continue
some sort of interest-rate-hike approach to slow the economy, given
its strength and the Fed's desire to quash inflation spurred by rapid
economic growth and a tight labor market. It's conceivable the Fed
would look to erase the effects of its rate cuts in late 1998, which
were implemented largely to provide liquidity to the markets, not to
supply fuel to the economy. In addition, the Fed may want to implement
its policy well in advance of the new year, in an attempt to avoid
changing interest-rate policy during a time when potential Year 2000
computer problems may occur. Indeed, a concern as we moved toward the
end of the year is the Year 2000 issue and its possible impact on
municipal securities. As one of many factors we look at, we'll be
paying close attention to this issue in the months ahead.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
FUND FACTS
GOAL: high current tax-free
income while maintaining
share price stability by
investing in high-quality,
short-term Connecticut
municipal money market
securities
FUND NUMBER: 425
TRADING SYMBOL: SPCXX
START DATE: March 4, 1991
SIZE: as of May 31, 1999,
more than $178 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1989
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 5/31/99 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 5/31/98
11/30/98
0 - 30 59 74 61
31 - 90 22 11 16
91 - 180 19 3 14
181 - 397 0 12 9
WEIGHTED AVERAGE MATURITY
5/31/99 11/30/98 5/31/98
Spartan Connecticut Municipal 39 days 45 days 52 days
Money Market Fund
Connecticut Tax-Free Money 40 days 53 days 43 days
Market Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF MAY 31, 1999 AS OF NOVEMBER 30, 1998
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 37.3% (VRDNs) 44.4%
Commercial Paper (including Commercial Paper (including
CP Mode) 26.8% CP Mode) 16.8%
Tender Bonds 7.1% Tender Bonds 6.7%
Municipal Notes 5.9% Municipal Notes 10.8%
Municipal Money Market Funds Municipal Money Market Funds
18.8% 20.1%
Other 4.1% Other 1.2%
Row: 1, Col: 1, Value: 37.3 Row: 1, Col: 1, Value: 44.0
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 27.0 Row: 1, Col: 3, Value: 17.0
Row: 1, Col: 4, Value: 7.0 Row: 1, Col: 4, Value: 7.0
Row: 1, Col: 5, Value: 6.0 Row: 1, Col: 5, Value: 11.0
Row: 1, Col: 6, Value: 19.0 Row: 1, Col: 6, Value: 20.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 4.0 Row: 1, Col: 8, Value: 1.0
</TABLE>
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - 74.8%
Connecticut Clean Wtr. Fund $ 1,300,000 $ 1,300,000
Participating VRDN Series
PA 517, 3.12% (Liquidity
Facility Merrill Lynch &
Co., Inc.) (a)(e)
Connecticut Dev. Auth. Arpt.
Facilities Rev. (Bradley
Arpt. Hotel Proj.):
Series 1997 A, 3.2%, VRDN (a) 1,200,000 1,200,000
Series 1997 B, 3.2%, VRDN (a) 1,000,000 1,000,000
Series 1997 C, 3.2%, VRDN (a) 470,000 470,000
Connecticut Dev. Auth. Health 7,200,000 7,200,000
Care Rev. (Corp. for
Independent Living Proj.)
Series 1990, 3.1%, VRDN (a)
Connecticut Dev. Auth. Ind.
Dev. Rev.:
(Rojo Enterprises LLC) 3.3%, 1,000,000 1,000,000
VRDN (a)
(W.E. Bassett Co. Proj.) 800,000 800,000
Series 1986, 3.6%, VRDN
(a)(d)
Connecticut Dev. Auth. Poll. 6,400,000 6,400,000
Cont. Rev. (Connecticut Lt.
& Pwr. Co. Proj.) Series
1996 A, 3.25% (AMBAC
Insured), VRDN (a)(d)
Connecticut Gen. Oblig.:
Participating VRDN Series 1,495,000 1,495,000
PA-347, 3.12% (a)(e)
Series B, 3.25% (BPA 7,000,000 7,000,000
Bayerische Landesbank
Girozentrale), VRDN (a)
Connecticut Health & Edl.
Facilities Auth. Rev. Bonds
(Yale Univ. Proj.):
Series S 1:
3% tender 8/12/99, CP mode 5,000,000 5,000,000
3.1% tender 6/11/99, CP mode 1,000,000 1,000,000
Series S 2:
2.95% tender 8/9/99, CP mode 2,265,000 2,265,000
3.05% tender 8/11/99, CP mode 6,000,000 6,000,000
Connecticut Hsg. Fin. Auth.:
Participating VRDN:
Series 1997 L, 3.45% 1,800,000 1,800,000
(Liquidity Facility First
Union Nat'l. Bank of North
Carolina) (a)(d)(e)
Series FR/Rl-A4, 3.25% 1,475,000 1,475,000
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (a)(e)
Series PT-1003, 3.17% 6,800,000 6,800,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(d)(e)
Series PT-148, 3.12% 1,000,000 1,000,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(e)
Series PT-81, 3.17% 1,420,000 1,420,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(d)(e)
(Hsg. Mtg. Fin. Prog.) Series 3,000,000 3,000,000
1995 G, 3.1% (AMBAC Insured)
(BPA Morgan Guaranty Trust
Co., NY), VRDN (a)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Muni. Elec. $ 6,300,000 $ 6,300,000
Energy Coop. Pwr. Supply
Sys. Rev. Bonds Series 1995
A, 3% tender 7/19/99, LOC
Fleet Nat'l. Bank, CP mode
Connecticut Reg'l. School 2,100,000 2,100,000
District #14 BAN (Bethleham
- - Woodbury Proj.) 4% 6/1/99
Connecticut Spl. Assessment
Second Injury Fund:
2.95% 9/15/99, LOC Cr. 1,300,000 1,300,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
3% 8/17/99, LOC Cr. Communale 1,000,000 1,000,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 9/8/99, LOC Cr. Communale 2,900,000 2,900,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 9/9/99, LOC Cr. Communale 12,000,000 12,000,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 9/15/99, LOC Cr. Communale 2,000,000 2,000,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3.05% 9/7/99, LOC Cr. 3,900,000 3,900,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
3.1% 8/25/99, LOC Cr. 4,200,000 4,200,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
Connecticut Spl. Assessment 12,600,000 12,600,000
Unemployment Compensation
Rev. Bonds Series 1993 C,
3.6%, tender 7/1/99 (FGIC
Insured)
Connecticut Spl. Tax Oblig.:
Participating VRDN Series 52, 2,800,000 2,800,000
3.24% (a)(e)
(Transport Infrastructure 6,580,000 6,580,000
Purp.) Series 1, 3.2%, VRDN
(a)
Bonds:
(Transport Infrastructure
Purp.):
Series 1993 C, 4.4% 10/1/99 1,700,000 1,707,232
Series B, 5.25% 10/1/99 (FGIC 3,340,000 3,363,190
Insured)
Series 1995 C, 4.25% 10/1/99 1,100,000 1,103,873
(FGIC Insured)
Series 1998 B, 4% 11/1/99 1,200,000 1,203,955
Enfield Gen. Oblig. Rev. BAN 2,500,000 2,503,753
3.25% 10/15/99
Hartford Redev. Auth. 2,400,000 2,400,000
(Underwood Towers Proj.)
3.15% (FSA Insured) (BPA
Societe Generale, France),
VRDN (a)
Mansfield Gen. Oblig. Rev. 1,650,000 1,650,242
BAN 4% 6/16/99
New Fairfield Gen. Oblig. 1,000,000 1,000,581
Rev. BAN 3.25% 8/2/99
Redding Gen. Oblig. Rev. BAN 2,000,000 2,002,341
3.25% 10/21/99
Stratford Gen. Oblig. Rev. 1,200,000 1,200,181
BAN 4% 6/16/99
133,440,348
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - 6.4%
Puerto Rico Commonwealth Hwy. $ 2,400,000 $ 2,400,000
& Trans. Auth. Participating
VRDN Series ROC 2-99-2,
3.19% (Liquidity Facility
Commerzbank AG) (a)(e)
Puerto Rico Commonwealth Pub. 2,000,000 2,000,000
Impt. Participating VRDN
Series 1998-87, 3.17%
(Liquidity Facility Morgan
Stanley, Dean Witter & Co.)
(a)(e)
Puerto Rico Elec. Pwr. Auth. 6,995,000 6,995,000
Participating VRDN Series PA
346, 3.12% (Liquidity
Facility Merrill Lynch &
Co., Inc.) (a)(e)
11,395,000
SHARES
OTHER - 18.8%
Municipal Central Cash Fund 33,512,267 33,512,267
(b)(c)
TOTAL INVESTMENT IN $ 178,347,615
SECURITIES - 100%
Total Cost for Income Tax Purposes $ 178,347,615
</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 3.26%. 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.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 178,347,615
value - See accompanying
schedule
Receivable for fund shares 489,515
sold
Interest receivable 1,000,404
TOTAL ASSETS 179,837,534
LIABILITIES
Payable for fund shares $ 959,792
redeemed
Distributions payable 44,692
Accrued management fee 74,964
Other payables and accrued 1,010
expenses
TOTAL LIABILITIES 1,080,458
NET ASSETS $ 178,757,076
Net Assets consist of:
Paid in capital $ 178,754,458
Accumulated undistributed net 2,618
realized gain (loss) on
investments
NET ASSETS, for 178,754,456 $ 178,757,076
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($178,757,076
(divided by) 178,754,456
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 2,807,811
EXPENSES
Management fee $ 459,082
Non-interested trustees' 313
compensation
Total expenses before 459,395
reductions
Expense reductions (6,113) 453,282
NET INTEREST INCOME 2,354,529
NET REALIZED GAIN (LOSS) ON 14,482
INVESTMENTS
NET INCREASE IN NET ASSETS $ 2,369,011
RESULTING FROM OPERATIONS
OTHER INFORMATION
Expense reductions:
Custodian credits $ 1,308
Transfer agent credits 4,805
$ 6,113
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 2,354,529 $ 5,290,021
Net realized gain (loss) 14,482 (3,592)
NET INCREASE (DECREASE) IN 2,369,011 5,286,429
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (2,354,529) (5,290,021)
from net interest income
Share transactions at net 82,743,000 195,188,717
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 2,156,862 5,053,873
distributions from net
interest income
Cost of shares redeemed (96,196,691) (173,846,788)
NET INCREASE (DECREASE) IN (11,296,829) 26,395,802
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (11,282,347) 26,392,210
IN NET ASSETS
NET ASSETS
Beginning of period 190,039,423 163,647,213
End of period $ 178,757,076 $ 190,039,423
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .013 .030 .031 .030 .034
Operations Net interest
income
Less Distributions
From net interest income (.013) (.030) (.031) (.030) (.034)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 1.28% 3.05% 3.12% 3.08% 3.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 178,757 $ 190,039 $ 163,647 $ 186,974 $ 175,622
(000 omitted)
Ratio of expenses to average .50% A .50% .50% .50% .50%
net assets
Ratio of expenses to average .49% A, D .49% D .50% .50% .50%
net assets after expense
reductions
Ratio of net interest income 2.56% A 3.00% 3.08% 3.04% 3.36%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .023
Operations Net interest
income
Less Distributions
From net interest income (.023)
Net asset value, end of period $ 1.000
TOTAL RETURN B, C 2.28%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 167,056
(000 omitted)
Ratio of expenses to average .50%
net assets
Ratio of expenses to average .50%
net assets after expense
reductions
Ratio of net interest income 2.25%
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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
FIDELITY 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
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY CT MUNICIPAL MONEY 1.24% 2.68% 15.62% 37.25%
MARKET
Connecticut Tax-Free Money 1.16% 2.50% 14.96% n/a
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on August 29, 1989. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. To measure how the
fund's performance stacked up against its peers, you can compare it to
the Connecticut tax-free money market funds average, which reflects
the performance of tax-free money market funds with similar objectives
tracked by IBC Financial Data, Inc. The past six months average
represents a peer group of 10 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
FIDELITY CT MUNICIPAL MONEY 2.68% 2.95% 3.30%
MARKET
Connecticut Tax-Free Money 2.50% 2.82% n/a
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
5/31/99 3/1/99 11/30/98 8/31/98 6/1/98
Fidelity Connecticut 2.67% 2.30% 2.63% 2.77% 3.19%
Municipal Money Market Fund
Connecticut Tax-Free Money 2.41% 2.15% 2.44% 2.62% 2.97%
Market Funds Average
Fidelity Connecticut 4.34% 3.72% 4.26% 4.53% 5.21%
Municipal Money Market
Fund - Tax-equivalent
Portion of fund's income 13.83% 22.21% 21.49% 0.14% 2.78%
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
table 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 1999 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 fund will maintain a $1
share price.
(checkmark)
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Scott Orr)
An interview with Scott Orr, Portfolio Manager of Fidelity Connecticut
Municipal Money Market Fund
Q. SCOTT, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE SIX MONTHS
THAT ENDED MAY 31, 1999?
A. As the period began, the market remained under the shadow of the
global turmoil that plagued it in the third and early fourth quarter
of 1998. There were a lot of questions about the pace of U.S. economic
growth and the direction of interest rates. However, early in the
period, market participants interpreted some signs to mean that the
economy would sustain the steady growth we've witnessed over the past
year. For example, in December, we saw reports that November's
employment data was stronger than expected. As the month went on, it
became more and more clear that the Federal Reserve Board would
discontinue the rapid-fire interest-rate cuts it had employed to boost
the markets from September through November 1998. Rates crept up from
that point through the end of the period, as market observers tried to
weigh what influence Fed action and emerging economic data might have
on the future course of interest rates.
Q. WHAT HAPPENED MORE RECENTLY, OVER THE LAST THREE MONTHS OF THE
PERIOD?
A. In March and April, data indicated that inflation might not be as
well-behaved as it had been in the recent past. Sentiment shifted from
the expectation that Fed policy was going to be unchanged to one
expecting a Fed rate increase. Such a hike would be employed by the
Fed to curb economic growth and diminish inflationary pressures. By
the end of May, the consensus viewpoint in the market was not "if" the
Fed would raise short-term interest rates, but "when." At its May Open
Market Committee meeting, the Fed added fuel to that fire when it
announced a bias toward raising rates.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. Supply and demand have a significant impact on the Connecticut
municipal money market. In some cases, it can be difficult to maneuver
the fund's average maturity in order to take full advantage of an
anticipated move in interest rates. The fund started the period with a
fairly neutral average maturity of 45 days. From that point, the
maturity trended downward - to the 20s in March and April - because
yields on the few long-term securities available were so low I didn't
feel they offered value to the fund. In other words, when paper became
available, demand was so strong that it pushed yields downward. This
came at a time when I was looking to lock in higher yields that
adequately reflected my expectations for higher interest rates.
Indeed, many of the fund's competitors chose to pay a higher premium
for some of these securities than I was willing to. My patience paid
off, because at the end of the period there was an influx of supply
that helped me lock in higher rates than had been seen in several
months. I extended the fund's maturity to 40 days at the end of 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 will be taxable at the state level this year
because of the out-of-state investments, I pursued this strategy so
the fund could provide higher yields on a tax-adjusted basis than if I
had chosen to invest the same assets in significantly lower-yielding
tax-exempt Connecticut securities.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1999, was 2.67%, compared to
2.63% six months ago. The more recent seven-day yield was the
equivalent of a 4.34% taxable rate of return for Connecticut investors
in the 38.88% combined state and federal income tax bracket, and
reflects that a portion of the fund's income was subject to state
taxes. Through May 31, 1999, the fund's six-month total return was
1.24%, compared to 1.16% for the Connecticut tax-free money market
funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. As of the end of May, the economy remains strong, labor markets are
tight and inflation looks like it might not be as subdued as it has
been. In addition, the Fed has announced its inclination to raise
interest rates to stave off inflationary pressures. I believe the Fed
will make such a move, probably at either its June or August Open
Market Committee meeting. Once the Fed raises rates, it may continue
some sort of interest-rate-hike approach to slow the economy, given
its strength and the Fed's desire to quash inflation spurred by rapid
economic growth and a tight labor market. It's conceivable the Fed
would look to erase the effects of its rate cuts in late 1998, which
were implemented largely to provide liquidity to the markets, not to
supply fuel to the economy. In addition, the Fed may want to implement
its policy well in advance of the new year, in an attempt to avoid
changing interest-rate policy during a time when potential Year 2000
computer problems may occur. Indeed, a concern as we moved toward the
end of the year is the Year 2000 issue and its possible impact on
municipal securities. As one of many factors we look at, we'll be
paying close attention to this issue in the months ahead.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
FUND FACTS
GOAL: high current tax-free
income while maintaining
share price stability by
investing in high-quality,
short-term Connecticut
municipal money market
securities
FUND NUMBER: 418
TRADING SYMBOL: FCMXX
START DATE: August 29, 1989
SIZE: as of May 31, 1999,
more than $511 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1989
(checkmark)
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 5/31/99 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
11/30/98 5/31/98
0 - 30 61 76 67
31 - 90 22 9 15
91 - 180 16 3 10
181 - 397 1 12 8
WEIGHTED AVERAGE MATURITY
5/31/99 11/30/98 5/31/98
Fidelity Connecticut 40 days 45 days 44 days
Municipal Money Market Fund
Connecticut Tax-Free Money 40 days 53 days 43 days
Market Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF MAY 31, 1999 AS OF NOVEMBER 30, 1998
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 44.6% (VRDNs) 48.5%
Commercial Paper (including Commercial Paper (including
CP Mode) 25.4% CP Mode) 11.6%
Tender Bonds 7.3% Tender Bonds 6.5%
Municipal Notes 5.6% Municipal Notes 11.1%
Municipal Money Market Funds Municipal Money Market Funds
13.4% 20.0%
Other 3.7% Other 2.3%
Row: 1, Col: 1, Value: 44.6 Row: 1, Col: 1, Value: 48.0
Row: 1, Col: 3, Value: 25.4 Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 7.3 Row: 1, Col: 4, Value: 7.0
Row: 1, Col: 5, Value: 5.6 Row: 1, Col: 5, Value: 11.0
Row: 1, Col: 6, Value: 13.4 Row: 1, Col: 6, Value: 20.0
Row: 1, Col: 8, Value: 3.7 Row: 1, Col: 8, Value: 2.0
</TABLE>
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MUNICIPAL SECURITIES - 100.0%
PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - 72.1%
Connecticut Clean Wtr. Fund $ 3,195,000 $ 3,195,000
Participating VRDN Series PA
517, 3.12% (Liquidity
Facility Merrill Lynch &
Co., Inc.) (a)(f)
Connecticut Dev. Auth. Arpt.
Facilities Rev. (Bradley
Arpt. Hotel Proj.):
Series 1997 A, 3.2%, VRDN (a) 3,900,000 3,900,000
Series 1997 C, 3.2%, VRDN (a) 830,000 830,000
Connecticut Dev. Auth. Health
Care Rev.:
(Corp. for Independent Living 4,000,000 4,000,000
Proj.) Series 1990, 3.1%,
VRDN (a)
Rfdg. (Corp. for Independent 2,565,000 2,565,000
Living) Series 1999, 3.1%,
VRDN (a)
Connecticut Dev. Auth. Ind. 6,600,000 6,600,000
Dev. Auth. Rev. Rfdg. (Cap.
District Energy Ctr. Proj.)
Series 1998, 3.1%, VRDN
(a)(d)
Connecticut Dev. Auth. Ind.
Dev. Rev.:
(Rojo Enterprises LLC) 3.3%, 1,700,000 1,700,000
VRDN (a)
(W.E. Bassett Co. Proj.) 800,000 800,000
Series 1986, 3.6%, VRDN
(a)(d)
Connecticut Dev. Auth. Poll.
Cont. Rev.:
(Connecticut Lt. & Pwr. Co. 9,400,000 9,400,000
Proj.) Series 1996 A, 3.25%
(AMBAC Insured), VRDN (a)(d)
Bonds (New England Pwr. Co. 3,000,000 3,104,285
Proj.) 7.25% (Pre-Refunded
to 10/15/99 @ 102) (e)
Connecticut Gen. Oblig.:
Participating VRDN:
Series PA-338, 3.12% (a)(f) 4,095,000 4,095,000
Series PA-347, 3.12% (a)(f) 3,500,000 3,500,000
Bonds: Series B, 4% 3/15/00 2,000,000 2,015,703
Series D, 3.75% 12/1/99 3,200,000 3,209,358
Series B, 3.25% (BPA 11,790,000 11,790,000
Bayerische Landesbank
Girozentrale), VRDN (a)
Connecticut Health & Edl.
Facilities Auth. Rev.:
Bonds (Yale Univ. Proj.):
Series S 1:
3% tender 8/10/99, CP mode 2,000,000 2,000,000
3% tender 8/12/99, CP mode 6,000,000 6,000,000
3.05% tender 7/22/99, CP mode 2,435,000 2,435,000
Series S 2:
2.95% tender 8/9/99, CP mode 7,500,000 7,500,000
3.05% tender 8/11/99, CP mode 17,200,000 17,200,000
3.1% tender 9/13/99, CP mode 3,190,000 3,190,000
(Pomfret School Issue) Series 900,000 900,000
A, 3.2%, LOC Cr. Local de
France, VRDN (a)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl.
Facilities Auth. Rev.: -
continued
(Yale Univ. Proj.) Series $ 10,000,000 $ 10,000,000
T-1, 3.25%, VRDN (a)
Connecticut Hsg. Fin. Auth.:
Bonds (Hsg. Mtge. Fin. Prog.)
Series 1989 D:
3% tender 6/11/99, CP mode (d) 500,000 500,000
3.05% tender 8/9/99, CP mode 1,500,000 1,500,000
(d)
3.05% tender 9/1/99, CP mode 1,225,000 1,225,000
(d)
Participating VRDN:
Series 1997 L, 3.45% 3,685,000 3,685,000
(Liquidity Facility First
Union Nat'l. Bank of North
Carolina) (a)(d)(f)
Series FR/Rl-A4, 3.25% 3,200,000 3,200,000
(Liquidity Facility
Bayerische Hypo-und
Vereinsbank AG) (a)(f)
Series PT-1003, 3.17% 15,380,000 15,380,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(d)(f)
Series PT-81, 3.17% 2,500,000 2,500,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(d)(f)
(Hsg. Mtg. Fin. Prog.) Series 13,670,000 13,670,000
1995 G, 3.1% (AMBAC Insured)
(BPA Morgan Guaranty Trust
Co., NY), VRDN (a)
Connecticut Muni. Elec. 2,400,000 2,400,000
Energy Coop. Pwr. Supply
Sys. Rev. Bonds Series 1995
A, 3% tender 7/19/99, LOC
Fleet Nat'l. Bank, CP mode
Connecticut Reg'l. School 4,900,000 4,900,000
District #14 BAN (Bethleham
- - Woodbury Proj.) 4% 6/1/99
Connecticut Spl. Assessment
Second Injury Fund:
2.95% 9/15/99, LOC Cr. 3,700,000 3,700,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
3% 8/10/99, LOC Cr. Communale 15,000,000 15,000,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 8/17/99, LOC Cr. Communale 3,000,000 3,000,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 8/17/99, LOC Cr. Communale 3,100,000 3,100,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 9/8/99, LOC Cr. Communale 8,300,000 8,300,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3% 9/9/99, LOC Cr. Communale 27,500,000 27,500,000
de Belgique, LOC Cr.
Agricole Indosuez, CP
3.05% 9/7/99, LOC Cr. 11,100,000 11,100,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
3.1% 8/25/99, LOC Cr. 12,100,000 12,100,000
Communale de Belgique, LOC
Cr. Agricole Indosuez, CP
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Spl. Assessment $ 36,500,000 $ 36,501,108
Unemployment Compensation
Rev. Bonds Series 1993 C,
3.6%, tender 7/1/99 (FGIC
Insured)
Connecticut Spl. Tax Oblig.
Rev.:
Participating VRDN Series 52, 7,200,000 7,200,000
3.24% (a)(f)
(Transport Infrastructure 25,310,000 25,310,000
Purp.) Series 1, 3.2%, VRDN
(a)
Bonds:
(Transport Infrastructure 5,000,000 5,021,271
Purp.) Series 1993 C, 4.4%
10/1/99
Series 1995 C, 4.25% 10/1/99 2,400,000 2,408,451
(FGIC Insured)
Series 1998 B, 4% 11/1/99 2,800,000 2,809,228
Enfield Gen. Oblig. Rev. BAN 7,500,000 7,511,259
3.25% 10/15/99
Hartford Redev. Auth. 11,945,000 11,945,000
(Underwood Towers Proj.)
3.15% (FSA Insured) (BPA
Societe Generale, France),
VRDN (a)
Mansfield Gen. Oblig. Rev. 3,600,000 3,600,528
BAN 4% 6/16/99
New Britain Gen. Oblig. 3,000,000 3,000,000
Series 1999, 3.35% (AMBAC
Insured), VRDN (a)
New Fairfield Gen. Oblig. 2,500,000 2,501,453
Rev. BAN 3.25% 8/2/99
New Haven Facilities Rev. 2,100,000 2,100,000
(Starter Sportswear) Series
1986, 3.55%, VRDN (a)(d)
Redding Gen. Oblig. Rev. BAN 5,000,000 5,005,852
3.25% 10/21/99
Shelton Gen. Oblig. Rev. BAN 1,250,000 1,252,127
3.25% 12/1/99
Stratford Gen. Oblig. Rev. 2,800,000 2,800,421
BAN 4% 6/16/99
361,656,044
PUERTO RICO - 14.5%
Puerto Rico Commonwealth Hwy.
& Trans. Auth.
Participating VRDN:
Series PA 114, 3.12% 12,735,000 12,735,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PA 331, 3.12% 4,900,000 4,900,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PA 494, 3.12% 1,870,000 1,870,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series ROC 2-98-1, 3.19% 1,000,000 1,000,000
(Liquidity Facility
Commerzbank AG) (a)(f)
Series ROC 2-99-2, 3.19% 6,300,000 6,300,000
(Liquidity Facility
Commerzbank AG) (a)(f)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Commonwealth Pub.
Impt. Participating VRDN:
Series PA 97, 3.12% $ 4,745,000 $ 4,745,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PT 1025, 3.12% 20,225,000 20,225,000
(Liquidity Facility Bank of
America Nat'l. Trust &
Savings Assoc.) (a)(f)
Puerto Rico Elec. Pwr. Auth.
Participating VRDN:
Series PA 150, 3.12% 3,700,000 3,700,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PA 205, 3.12% 11,995,000 11,995,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PA 311, 3.12% 4,195,000 4,195,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
Series PA 346, 3.12% 900,000 900,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(f)
72,565,000
SHARES
OTHER - 13.4%
Municipal Central Cash Fund 67,475,942 67,475,942
(b)(c)
TOTAL INVESTMENT IN $ 501,696,986
SECURITIES - 100%
Total Cost for Income Tax Purposes $ 501,696,986
</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 3.26%. 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) Security collateralized by an amount sufficient to pay interest
and principal.
(f) 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.
FIDELITY CONNECTICUT MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 501,696,986
value - See accompanying
schedule
Receivable for investments 2,500,000
sold
Receivable for fund shares 7,899,911
sold
Interest receivable 3,074,621
Prepaid expenses 10,963
TOTAL ASSETS 515,182,481
LIABILITIES
Payable to custodian bank $ 1,984
Payable for fund shares 3,760,840
redeemed
Distributions payable 74,468
Accrued management fee 160,789
Other payables and accrued 94,989
expenses
TOTAL LIABILITIES 4,093,070
NET ASSETS $ 511,089,411
Net Assets consist of:
Paid in capital $ 511,101,501
Accumulated net realized gain (12,090)
(loss) on investments
NET ASSETS, for 511,101,413 $ 511,089,411
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($511,089,411
(divided by) 511,101,413
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 8,010,905
EXPENSES
Management fee $ 1,010,624
Transfer agent fees 332,615
Accounting fees and expenses 44,735
Non-interested trustees' 890
compensation
Custodian fees and expenses 15,209
Registration fees 23,432
Audit 11,285
Legal 17,176
Miscellaneous 8,382
Total expenses before 1,464,348
reductions
Expense reductions (33,812) 1,430,536
NET INTEREST INCOME 6,580,369
NET REALIZED GAIN (LOSS) ON 24,682
INVESTMENTS
NET INCREASE IN NET ASSETS $ 6,605,051
RESULTING FROM OPERATIONS
OTHER INFORMATION
Expense reductions:
Custodian credits $ 3,343
Transfer agent credits 30,469
$ 33,812
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31,1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 6,580,369 $ 12,938,963
Net realized gain (loss) 24,682 (18,425)
NET INCREASE (DECREASE) IN 6,605,051 12,920,538
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (6,580,369) (12,938,963)
from net interest income
Share transactions at net 815,518,964 1,319,043,753
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 6,193,406 12,271,598
distributions from net
interest income
Cost of shares redeemed (798,637,841) (1,230,483,349)
NET INCREASE (DECREASE) IN 23,074,529 100,832,002
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) 23,099,211 100,813,577
IN NET ASSETS
NET ASSETS
Beginning of period 487,990,200 387,176,623
End of period $ 511,089,411 $ 487,990,200
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .012 .029 .030 .029 .032
Operations Net interest
income
Less Distributions
From net interest income (.012) (.029) (.030) (.029) (.032)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 1.24% 2.94% 3.05% 2.98% 3.29%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 511,089 $ 487,990 $ 387,177 $ 339,487 $ 321,870
(000 omitted)
Ratio of expenses to average .55% A .56% .58% .59% .61%
net assets
Ratio of expenses to average .54% A, D .56% .57% D .58% D .61%
net assets after expense
reductions
Ratio of net interest income 2.49% A 2.90% 3.00% 2.93% 3.24%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .022
Operations Net interest
income
Less Distributions
From net interest income (.022)
Net asset value, end of period $ 1.000
TOTAL RETURN B, C 2.19%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 300,885
(000 omitted)
Ratio of expenses to average .60%
net assets
Ratio of expenses to average .60%
net assets after expense
reductions
Ratio of net interest income 2.16%
to average net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Connecticut Municipal Income Fund (the income fund) is a fund
of Fidelity Court Street Trust. Spartan Connecticut Municipal Money
Market Fund 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. Each fund may be affected by
economic and political developments in the state of Connecticut. The
following summarizes the significant accounting policies of the money
market funds and the income fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
capital gains on investments, if any, are recorded on the ex-dividend
date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions and losses deferred due 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 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 SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc., (FIMM) 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.
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
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS - CONTINUED
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.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $45,875,151 and $47,523,046, respectively.
The market value of futures contracts opened and closed during the
period amounted to $11,553,539 and $6,747,483, 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 annualized rate of .38% of average net assets for
Fidelity Connecticut Municipal Money Market Fund.
As the income fund's and Spartan Connecticut 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 the income fund and Spartan
Connecticut Municipal Money Market Fund, respectively.
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 collected certain
transaction fees from shareholders which amounted to $743 for the
period.
SUB-ADVISER FEE. As each money market and the income (effective
January 1, 1999) funds' investment sub-adviser, FIMM, a wholly owned
subsidiary of FMR, receives
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE - CONTINUED
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
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
annualized rate of .13% of average net assets for Fidelity Connecticut
Municipal Money Market Fund.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market funds, along with other money market funds
advised by FMR or its affiliates, have entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company, effective January 1, 1999. FIDFUNDS provides
limited coverage for certain loss events including issuer default as
to payment of principal or interest and bankruptcy or insolvency of a
credit enhancement provider. The insurance does not cover losses
resulting from changes in interest rates, ratings downgrades or other
market conditions. Each fund may be subject to a special assessment of
up to approximately 2.5 times the fund's annual gross premium if
covered losses exceed certain levels. During the period, Fidelity
Connecticut Municipal Money Market Fund paid premiums of $18,793 to
FIDFUNDS, which are being amortized over one year. During the period,
FMR has borne the cost of Spartan Connecticut Municipal Money Market
Fund's premium payable to FIDFUNDS.
5. EXPENSE REDUCTIONS.
Fidelity Connecticut Municipal Money Market Fund and FMR (on behalf of
the income fund and Spartan Connecticut 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.
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
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
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
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc. (FIMM)
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
Matthew N. Karstetter, Deputy 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
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
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)(automated graphic)
1-800-544-5555
(automated graphic) AUTOMATED LINES FOR QUICKEST SERVICE
CTR-SANN-0799 80203
1.704902.101
(Fidelity Logo Graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
NEW JERSEY MUNICIPAL
FUNDS
AND
FIDELITY
NEW JERSEY MUNICIPAL
MONEY MARKET FUND
SEMIANNUAL REPORT
MAY 31, 1999
CONTENTS
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
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
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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:
After its first-ever close above 11,000 on the first trading day of
May, the Dow Jones Industrial Average dropped over 450 points by
month's end. The Federal Reserve Board's shift in bias toward raising
rates to ward off inflation contributed to the decline. Government
securities followed a similar path during May, as expectations of an
eventual boost in interest rates drove the price of the bellwether
30-year Treasury consistently downwards.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN NJ MUNICIPAL INCOME 0.55% 4.02% 36.56% 100.92%
LB New Jersey Municipal Bond 0.97% 4.60% n/a n/a
with Port Authority of New
York and New Jersey
New Jersey Municipal Debt 0.22% 3.70% 35.95% 100.08%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 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 with Port Authority
of New York and New Jersey Index - 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 Inc. The past six months average represents a peer
group of 58 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN NJ MUNICIPAL INCOME 4.02% 6.43% 7.23%
LB New Jersey Municipal Bond 4.60% n/a n/a
with Port Authority of New
York and New Jersey
New Jersey Municipal Debt 3.70% 6.33% 7.18%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a 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
1989/05/31 10000.00 10000.00
1989/06/30 10159.87 10135.80
1989/07/31 10271.97 10273.75
1989/08/31 10145.60 10173.17
1989/09/30 10106.80 10142.85
1989/10/31 10247.73 10266.90
1989/11/30 10400.60 10446.57
1989/12/31 10448.46 10532.02
1990/01/31 10344.66 10482.21
1990/02/28 10449.99 10575.50
1990/03/31 10468.18 10578.67
1990/04/30 10332.11 10502.08
1990/05/31 10601.54 10731.34
1990/06/30 10708.66 10825.67
1990/07/31 10876.38 10984.81
1990/08/31 10666.59 10825.31
1990/09/30 10735.29 10831.48
1990/10/31 10887.27 11027.96
1990/11/30 11144.70 11249.73
1990/12/31 11194.72 11298.67
1991/01/31 11330.40 11450.30
1991/02/28 11402.58 11549.92
1991/03/31 11431.82 11554.07
1991/04/30 11590.74 11707.74
1991/05/31 11685.74 11811.82
1991/06/30 11683.66 11800.13
1991/07/31 11876.57 11943.86
1991/08/31 12017.30 12101.16
1991/09/30 12169.60 12258.71
1991/10/31 12299.47 12369.04
1991/11/30 12329.73 12403.55
1991/12/31 12575.09 12669.73
1992/01/31 12596.19 12698.62
1992/02/29 12603.08 12702.68
1992/03/31 12579.35 12707.38
1992/04/30 12680.65 12820.48
1992/05/31 12864.84 12971.38
1992/06/30 13070.05 13189.04
1992/07/31 13536.20 13584.44
1992/08/31 13347.19 13451.99
1992/09/30 13402.11 13539.97
1992/10/31 13127.41 13406.87
1992/11/30 13479.74 13646.99
1992/12/31 13670.07 13786.33
1993/01/31 13836.84 13946.66
1993/02/28 14376.57 14451.11
1993/03/31 14196.23 14298.36
1993/04/30 14361.25 14442.63
1993/05/31 14478.33 14523.80
1993/06/30 14742.86 14766.20
1993/07/31 14745.88 14785.55
1993/08/31 15090.63 15093.38
1993/09/30 15270.85 15265.30
1993/10/31 15276.36 15294.76
1993/11/30 15113.61 15160.01
1993/12/31 15455.25 15480.04
1994/01/31 15617.57 15656.82
1994/02/28 15156.57 15251.31
1994/03/31 14463.73 14630.28
1994/04/30 14546.91 14754.34
1994/05/31 14712.42 14882.26
1994/06/30 14635.12 14791.33
1994/07/31 14909.77 15062.46
1994/08/31 14967.92 15114.57
1994/09/30 14738.82 14892.69
1994/10/31 14470.74 14628.20
1994/11/30 14228.65 14363.72
1994/12/31 14567.11 14679.86
1995/01/31 15003.96 15099.41
1995/02/28 15351.66 15538.50
1995/03/31 15538.75 15717.04
1995/04/30 15568.63 15735.59
1995/05/31 15939.98 16237.71
1995/06/30 15841.72 16096.44
1995/07/31 15900.96 16249.04
1995/08/31 16033.11 16455.07
1995/09/30 16176.35 16559.24
1995/10/31 16423.73 16800.01
1995/11/30 16655.38 17078.72
1995/12/31 16803.25 17242.85
1996/01/31 16893.14 17373.03
1996/02/29 16814.78 17255.76
1996/03/31 16607.77 17035.23
1996/04/30 16545.89 16987.02
1996/05/31 16530.65 16980.23
1996/06/30 16708.15 17165.14
1996/07/31 16843.03 17321.34
1996/08/31 16826.68 17317.19
1996/09/30 17036.07 17559.63
1996/10/31 17247.66 17758.23
1996/11/30 17550.31 18083.20
1996/12/31 17486.92 18007.25
1997/01/31 17531.59 18041.29
1997/02/28 17663.27 18206.91
1997/03/31 17454.52 17964.21
1997/04/30 17576.09 18114.57
1997/05/31 17811.54 18387.01
1997/06/30 17981.33 18582.83
1997/07/31 18443.35 19097.58
1997/08/31 18276.64 18918.63
1997/09/30 18480.08 19143.20
1997/10/31 18589.57 19266.29
1997/11/30 18680.55 19379.57
1997/12/31 18946.94 19662.32
1998/01/31 19124.74 19865.24
1998/02/28 19112.88 19871.20
1998/03/31 19125.59 19888.68
1998/04/30 19051.10 19798.99
1998/05/31 19314.75 20112.40
1998/06/30 19374.00 20191.65
1998/07/31 19417.21 20242.33
1998/08/31 19716.88 20555.07
1998/09/30 19946.99 20811.19
1998/10/31 19956.56 20810.77
1998/11/30 19980.79 20883.82
1998/12/31 20042.80 20936.45
1999/01/31 20278.87 21185.38
1999/02/28 20157.39 21092.80
1999/03/31 20165.77 21122.12
1999/04/30 20224.40 21174.71
1999/05/28 20091.60 21052.11
IMATRL PRASUN SHR__CHT 19990531 19990615 084821 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan New Jersey Municipal Income Fund on May 31, 1989.
As the chart shows, by May 31, 1999, the value of your investment
would have grown to $20,092 - a 100.92% increase on your 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 $21,052 a 110.52% 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
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
1999 1998 1997 1996 1995 1994
Dividend returns 2.29% 4.98% 5.19% 5.37% 6.40% 5.26%
Capital returns -1.74% 1.98% 1.25% 0.00% 10.66% -11.12%
Total returns 0.55% 6.96% 6.44% 5.37% 17.06% -5.86%
</TABLE>
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.
DIVIDENDS AND YIELD
PERIODS ENDED MAY 31, 1999 PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
Dividends per share 4.51(cents) 26.46(cents) 53.53(cents)
Annualized dividend rate 4.68% 4.63% 4.66%
30-day annualized yield 4.16% - -
30-day annualized 6.94% - -
tax-equivalent yield
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 $11.34 over the past month,
$11.46 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 40.08% combined effective 1999
federal and state tax bracket, but does not reflect the payment of the
federal alternative minimum tax, if applicable.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Despite a continued decline in new
issues that helped create a stable
supply and demand environment
for municipal bonds, the market for
municipal securities deteriorated
during the six-month period that
ended May 31, 1999. During this
time, the Lehman Brothers Municipal
Bond Index - an index of
approximately 50,000
investment-grade, fixed-rate
tax-exempt bonds - returned
0.81%. In comparison, the Lehman
Brothers Aggregate Bond Index -
a widely followed measure of
taxable bond performance -
declined 0.76% during the same
period. While municipal bonds
outperformed taxable bonds over
the six-month period, the municipal
market struggled as investors
anticipated that interest rates may
increase in an effort to slow the
booming U.S. economy and fight the
threat of inflation. Although there is
no consistent agreement among
economists that the Federal Reserve
Board will increase interest rates at
its next meeting, yields - which
move in the opposite direction of
prices - increased during the
period, causing municipal securities
to trade lower. Late in the period,
investors sold bonds in response to a
stronger-than-expected
consumer-price index in April. After
the Federal Reserve Board's policy
meeting in early May, municipal
bonds came under further pressure
as the Fed shifted its bias toward
tighter monetary policy and higher
interest rates, although it did not
raise rates at that time.
(Photograph of Norm Lind)
An interview with Norm Lind, Portfolio Manager of Spartan New Jersey
Municipal Income Fund
Q. HOW DID THE FUND PERFORM, NORM?
A. Although rising interest rates curtailed the municipal bond
market's returns during the past six months, the fund performed well
relative to its peers. For the six-month period that ended May 31,
1999, the fund had a total return 0.55%. To get a sense of how the
fund did relative to its competitors, the New Jersey municipal debt
funds average returned 0.22% for the same six-month period, according
to Lipper Inc. 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
0.97% for the same six-month period. For the 12-month period that
ended May 31, 1999, the fund had a total return of 4.02%. That return
compared to the New Jersey municipal debt funds average's 3.70% return
and the Lehman Brothers index's 4.60% return for the same 12-month
period.
Q. WHY DID THE FUND OUTPERFORM ITS PEERS DURING THE PAST SIX MONTHS?
A. The fund benefited from its emphasis on relatively high-quality
bonds rated A, Aa or Aaa. In the report to shareholders six months
ago, I mentioned that I was concerned that the spread - the difference
in income - between Aaa-rated and Baa-rated bonds might widen in
response to an economic downturn or other reason. In that case, the
prices of Baa-rated bonds would likely 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. Well, in response to an increase in the perceived
risk of Baa-rated securities, investors pushed their prices lower, and
their yields - which move in the opposite direction - climbed during
the past six months. The trouble began when a hospital system in
Philadelphia - which, at one point was rated Baa - declared bankruptcy
and cast a pall over Baa-rated securities across the national
municipal market. Later, there was news that one of the larger
municipal bond insurance agencies decided to stop insuring Baa-rated
hospital securities. While the fund didn't escape the pressure on
Baa-rated securities, it suffered less than some peers with relatively
large holdings in them.
Q. WHICH TYPES OF BONDS WERE LAGGARDS DURING THE PAST SIX MONTHS?
A. Intermediate-term bonds - those with maturities between 10 and 15
years - lagged the overall municipal market during the period. In the
past several months in particular, the relative cheapness of
Treasuries prompted significant selling of intermediate-maturity
municipal bonds from "crossover" buyers, such as pension funds and
insurance companies, who move among taxable and tax-free bonds in
search of value. Despite their recent disappointing performance, I
continued to emphasize intermediate-maturity bonds because I felt they
offered an attractive combination of reward - or income - for their
given risk.
Q. FOR SOME TIME NOW, YOU'VE EMPHASIZED PREMIUM COUPON BONDS. WHAT ARE
THEY AND WHY ARE THEY ATTRACTIVE?
A. A premium bond carries a coupon - the interest rate the issuer
promises to pay - above prevailing market rates and is priced above
its face (par) value. The primary reason why I favor them is because
their premium gives the bond protection from unfavorable tax treatment
that can occur during particular market environments. In addition,
individual investors tend to shy away from buying premiums, so I'm
often able to get them at attractive prices compared to similarly
rated, comparable maturity bonds with coupons at or below prevailing
rates.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET AND THE FUND?
A. Supply and demand conditions - which can have a dramatic effect on
the municipal market's performance - appear favorable. In contrast to
last year, there has been a relatively light supply of municipal bonds
issued so far in 1999. Meanwhile, demand has been firm. However, the
direction of interest rates will be the primary factor determining
municipal bond performance. But I don't spend time trying to predict
where interest rates are headed since I don't believe anyone can do it
consistently well. Rather, I'll continue to look for attractively
priced bonds that I believe can perform well in relation to other
bonds, no matter where interest rates end up.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
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 May 31, 1999,
more than $405 million
MANAGER: Norm Lind, since
1997; manager, various Fidelity
and Spartan municipal
income funds; joined Fidelity
in 1986
(checkmark)
NORM LIND ON DEVELOPMENTS
IN TECHNOLOGY AND THEIR EFFECT
ON MUNICIPAL-BOND ISSUERS:
"Among the many factors I
consider in security selection, I'm
currently keeping an eye on two
technology-related developments
and their potential effect on
municipal-bond issuers. How
individual issuers meet these
challenges could have an impact
on their fiscal health and,
ultimately, their creditworthiness.
The first is potential problems
stemming from the so-called Year
2000 glitch, or `Y2K.' The issue is
whether problems that arise from
Y2K will compromise the
operations of a municipal issuer.
I'll also be monitoring the extent to
which municipal issuers
adequately budget for Y2K fixes.
"The second technology-related
issue I'm watching is the rise of
the Internet. As more and more
people shop for goods and services
online, it's uncertain to what
extent states and municipalities
will lose out on sales tax revenue.
Many government entities across
the nation are wrestling with
whether they will be able to tax
Internet-based sales that emanate
from their states or
municipalities. As yet, there's no
definitive estimate of the
magnitude of potential problems
stemming from this issue.
Nonetheless, I'm factoring it in
when I evaluate the attractiveness
of issuers, especially those that
are heavily reliant on sales-tax
revenues."
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE SECTORS AS OF MAY
31, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE SECTORS 6 MONTHS AGO
General Obligations 25.6 23.7
Transportation 22.6 21.9
Water & Sewer 13.2 10.6
Health Care 8.5 10.7
Escrowed/Pre-Refunded 8.0 6.9
AVERAGE YEARS TO MATURITY AS
OF MAY 31, 1999
6 MONTHS AGO
Years 12.2 12.5
</TABLE>
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF MAY 31, 1999
6 MONTHS AGO
Years 6.1 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 MAY 31, 1999
Aaa 47.9%
Aa, A 39.4%
Baa 7.5%
Ba, B 0.6%
Not Rated 3.5%
Short-term
investments 1.1%
Row: 1, Col: 1, Value: 47.1
Row: 1, Col: 2, Value: 39.4
Row: 1, Col: 3, Value: 7.5
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 5, Value: 3.5
Row: 1, Col: 6, Value: 1.5
AS OF NOVEMBER 30, 1998
Aaa 47.2%
Aa, A 37.5%
Baa 9.3%
Ba, B 0.7%
Not Rated 3.7%
Short-term
investments 1.6%
Row: 1, Col: 1, Value: 47.0
Row: 1, Col: 2, Value: 37.5
Row: 1, Col: 3, Value: 9.199999999999999
Row: 1, Col: 4, Value: 1.1
Row: 1, Col: 5, Value: 3.7
Row: 1, Col: 6, Value: 2.0
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P (registered
trademark) RATINGS. AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S
INVESTMENTS.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.9%
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - 86.9%
Atlantic County Impt. Auth.
Luxury Tax Rev. (Convention
Ctr.):
7.375% 7/1/10 (MBIA Insured) Aaa $ 1,000,000 $ 1,173,630
(Escrowed to Maturity) (f)
7.4% 7/1/16 (MBIA Insured) Aaa 3,510,000 4,423,162
(Escrowed to Maturity) (f)
Atlantic County Pub.
Facilities Lease Agreement
Ctfs. of Prtn. Rfdg. (Pub.
Facilities Lease Agreement):
7.4% 3/1/07 (FGIC Insured) Aaa 3,035,000 3,607,644
7.4% 3/1/08 (FGIC Insured) Aaa 3,260,000 3,922,367
Atlantic County Util. Auth.
Swr. Rev. Rfdg.:
Series A, 5.85% 1/15/15 Aaa 2,620,000 2,792,737
(AMBAC Insured)
5.25% 1/15/11 (AMBAC Insured) Aaa 4,145,000 4,304,583
Bergen County Utils. Auth.
Wtr. Poll. Cont. Rev.:
Rfdg.:
(Cap. Appreciation) Series B, Aaa 7,500,000 5,099,550
0% 12/15/07 (FGIC Insured)
Series A, 5.125% 12/15/11 Aaa 5,000,000 5,104,600
(FGIC Insured)
Series B, 5.6% 12/15/03 (FGIC Aaa 2,000,000 2,134,080
Insured)
Series A, 5% 12/15/13 (FGIC Aaa 2,675,000 2,687,733
Insured)
Camden County Muni. Util.
Auth. Swr. Rev. Rfdg.:
5.5% 7/15/05 (FGIC Insured) Aaa 1,110,000 1,185,691
5.5% 7/15/08 (FGIC Insured) Aaa 1,300,000 1,397,669
6% 7/15/03 (FGIC Insured) Aaa 3,180,000 3,422,570
6% 7/15/06 (FGIC Insured) Aaa 1,060,000 1,168,088
Cape May County Ind. Poll. Aaa 1,350,000 1,645,610
Cont. Fing. Auth. 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 2,353,658
5.25% 1/1/11 (AMBAC Insured) Aaa 2,365,000 2,459,387
Edison Township Gen. Oblig. A1 1,000,000 1,155,380
6.5% 6/1/11
Essex County Gen. Oblig.:
Rfdg.:
Series A 1, 6% 11/15/05 (FGIC Aaa 3,000,000 3,311,010
Insured)
Series A 2, 6.25% 9/1/10 Aaa 4,735,000 5,233,453
(AMBAC Insured)
Series A:
5.75% 9/1/07 (AMBAC Insured) Aaa 1,385,000 1,518,306
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
Essex County Gen. Oblig.: -
continued
Series A: - continued
5.75% 9/1/08 (AMBAC Insured) Aaa $ 1,465,000 $ 1,611,954
5.75% 9/1/09 (AMBAC Insured) Aaa 1,550,000 1,705,574
Essex County Impt. Auth.:
Gen. Oblig. Lease Rev. 7% Aaa 1,000,000 1,070,280
12/1/20 (AMBAC Insured)
(Pre-Refunded to 12/1/00 @
102) (f)
Util. Sys. Rev. (Orange Aaa 550,000 581,977
Franchise) 5.75% 7/1/27
(MBIA Insured)
Essex County Util. Auth.
Solid Waste Rev. Series A:
5.75% 4/1/05 (FSA Insured) Aaa 1,000,000 1,077,720
(Escrowed to Maturity)
6% 4/1/06 (FSA Insured) Aaa 1,000,000 1,097,730
(Escrowed to Maturity)
Jersey City Muni. Utils. Aaa 3,720,000 3,915,188
Auth. Wtr. Rev. 5.25% 4/1/05
(FSA Insured)
Jersey City Swr. Auth. Swr.
Rev. Rfdg.:
6% 1/1/07 (AMBAC Insured) Aaa 2,175,000 2,394,392
6% 1/1/09 (AMBAC Insured) Aaa 1,000,000 1,109,450
Lenape Reg'l. High School
District:
7.625% 1/1/13 (MBIA Insured) Aaa 675,000 864,317
7.625% 1/1/14 (MBIA Insured) Aaa 1,000,000 1,288,780
Middlesex County Gen. Impt. Aaa 2,665,000 2,738,021
4.75% 8/1/02
Middlesex County Poll. Cont.
Auth. Rev. Rfdg. (Amerada
Hess):
6.875% 12/1/22 - 5,000,000 5,326,550
7.875% 6/1/22 - 7,750,000 8,803,613
Middletown Township Board of Aaa 1,500,000 1,603,965
Ed. 5.7% 8/1/10 (MBIA
Insured)
Morris County Gen. Oblig. Aaa 2,180,000 2,395,537
6.5% 8/1/03
New Jersey Bldg. Auth. Bldg.
Rev. Rfdg.:
5% 6/15/14 Aa2 4,000,000 4,013,520
5.75% 6/15/09 Aa2 3,000,000 3,282,240
New Jersey Econ. Dev. Auth. A2 2,000,000 2,416,820
Econ. Dev. Rev.
(Weyerhaeuser Co. Proj.) 9%
11/1/04
New Jersey Econ. Dev. Auth.
Market Transition Facilities
Rev. (Senior Lien) Series A:
5.25% 7/1/01 (MBIA Insured) Aaa 1,000,000 1,030,090
5.8% 7/1/07 (MBIA Insured) Aaa 3,300,000 3,564,693
5.8% 7/1/09 (MBIA Insured) Aaa 5,000,000 5,382,050
5.875% 7/1/11 (MBIA Insured) Aaa 4,090,000 4,393,069
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth.
Rev.:
(Edl. Testing Svc.):
Series A, 6.5% 5/15/05 (MBIA Aaa $ 2,200,000 $ 2,371,072
Insured)
Series B, 6.125% 5/15/15 Aaa 2,000,000 2,228,660
(MBIA Insured) (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 2,370,619
5% 5/15/09 (MBIA Insured) Aaa 2,600,000 2,687,386
New Jersey Econ. Dev. Auth. Aaa 7,700,000 8,198,113
Wtr. Facilities Rev.
(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 3,533,249
5.9% 7/1/26 Aaa 2,000,000 2,151,140
Rfdg.:
(Saint Peters College) Series
B:
5.375% 7/1/12 Baa3 1,450,000 1,440,720
5.375% 7/1/18 Baa3 1,000,000 980,570
(Seton Hall Univ. Proj.) Aaa 2,200,000 2,313,278
5.25% 7/1/09 (AMBAC Insured)
(b)
New Jersey Gen. Oblig.:
Rfdg.:
Series D:
5.75% 2/15/06 Aa1 1,950,000 2,114,054
6% 2/15/13 Aa1 7,500,000 8,306,250
Series E, 6% 7/15/10 Aa1 3,000,000 3,336,270
4.75% 3/1/17 Aa1 9,000,000 8,613,000
5.9% 8/1/02 Aa1 1,500,000 1,590,615
6.5% 7/15/04 Aa1 9,035,000 10,032,554
New Jersey Health Care
Facilities Fing. Auth. Rev.:
(East Orange Gen. Hosp.) BBB+ 2,450,000 2,559,295
Series B, 7.75% 7/1/20
(Elizabeth Gen. Med. Ctr.) Baa1 1,975,000 2,066,285
Series C, 7.25% 7/1/06
(Muhlenberg Reg'l. Med. Ctr.) Aaa 2,000,000 2,037,000
Series B, 8% 7/1/18 (AMBAC
Insured)
(Pascack Valley Hosp. Assoc.) BBB 5,200,000 5,590,156
6.7% 7/1/11 (Pre-Refunded to
7/1/01 @ 102) (f)
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Health Care
Facilities Fing. Auth. Rev.:
- - continued
Rfdg.:
(AHS Hosp. Corp.) Series A, Aaa $ 3,500,000 $ 3,890,670
6% 7/1/11 (AMBAC Insured)
(Atlantic City Med. Ctr.) A3 4,200,000 4,533,942
Series C, 6.8% 7/1/11
(Burdette Tomlin Memorial Aaa 1,710,000 1,801,588
Hosp.) Series D, 6.25%
7/1/06 (FGIC Insured)
(Cmnty. Med. Ctr./Kimball Aaa 3,835,000 3,972,868
Etc.) 5.25% 7/1/11 (FSA
Insured)
(Hackensack Univ. Med. Ctr.) Aaa 4,665,000 4,796,973
Series A, 5.25% 1/1/12 (MBIA
Insured)
(Kennedy Health Sys.) Series B:
5% 7/1/09 (MBIA Insured) Aaa 1,000,000 1,029,870
5.75% 7/1/07 (MBIA Insured) Aaa 1,930,000 2,096,192
5.75% 7/1/08 (MBIA Insured) Aaa 1,135,000 1,236,548
(Newcomb Med. Ctr.) Series A, Ba3 2,465,000 2,565,128
7.875% 7/1/03
(Saint Barnabas Med. Ctr.) Aaa 2,000,000 1,851,960
Series A, 4.75% 7/1/28 (MBIA
Insured)
New Jersey Hsg. & Mtg. Fin.
Agcy. Rev.:
(Home Buyer): Series B, 7.9% Aaa 895,000 918,100
10/1/22 (MBIA Insured) (e)
Series W, 4.75% 10/1/17 (MBIA Aaa 4,485,000 4,475,312
Insured)
Rfdg. Series 1:
6% 11/1/02 A+ 2,830,000 2,927,720
6.2% 11/1/04 A+ 3,100,000 3,303,205
6.45% 11/1/07 A+ 5,090,000 5,420,087
New Jersey Hsg. Fin. Agcy.
Gen. Resolution Series A:
6.9% 11/1/07 AA+ 2,670,000 2,833,404
6.95% 11/1/08 AA+ 2,265,000 2,400,832
7% 11/1/09 AA+ 2,855,000 3,027,413
7.05% 11/1/10 AA+ 3,500,000 3,711,190
New Jersey Hwy. Auth. Garden
St. Parkway (Senior Parkway):
6% 1/1/05 A1 2,200,000 2,335,234
6% 1/1/19 (Escrowed to Aaa 4,485,000 5,011,046
Maturity) (f)
6.1% 1/1/06 A1 1,750,000 1,859,585
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Hwy. Auth. Garden
St. Parkway (Senior
Parkway): - continued
6.2% 1/1/10 (c) A1 $ 7,000,000 $ 7,927,010
New Jersey Sport and Aaa 2,675,000 2,795,696
Exposition Auth. Rev. Rfdg.
Series A, 5.25% 3/1/11 (MBIA
Insured)
New Jersey Tpk. Auth. Tpk.
Rev.:
Rfdg.:
Series A:
6.3% 1/1/01 Baa1 1,000,000 1,034,790
6.4% 1/1/02 Baa1 1,000,000 1,054,930
6.75% 1/1/08 Baa1 1,000,000 1,048,580
Series C:
6.5% 1/1/09 Baa1 1,300,000 1,445,288
6.5% 1/1/16 Baa1 615,000 696,863
10.375% 1/1/03 (FGIC Insured) AAA 5,830,000 6,579,913
(Escrowed to Maturity) (f)
Series A, 5.9% 1/1/03 Baa1 9,000,000 9,493,830
New Jersey Trans. Corp. Aaa 5,100,000 5,298,288
Series A, 5.4% 9/1/02 (FSA
Insured)
New Jersey Trans. Trust Fund
Auth.:
(Trans. Sys.) Series B:
5.25% 6/15/10 Aa2 5,000,000 5,219,800
6% 6/15/06 (AMBAC Insured) Aa2 16,450,000 18,121,481
Rfdg. (Trans. Sys.) Series B, Aaa 3,000,000 3,476,610
6.5% 6/15/10 (MBIA Insured)
New Jersey Wastewtr.
Treatment Trust Ln. Rev.:
Series A:
6% 7/1/10 Aa1 15,000 15,788
6% 7/1/10 (Pre-Refunded to Aa1 985,000 1,046,287
7/1/01 @ 102) (f)
6.875% 6/15/06 Aa2 105,000 109,427
6.875% 6/15/09 Aa2 80,000 83,657
7% 6/15/10 Aa2 140,000 146,457
New Jersey Wtr. Supply Auth. Aaa 2,465,000 2,534,094
Rev. Rfdg. (Delaware &
Raritan Sys.) 5.375% 11/1/12
(MBIA Insured) (e)
Newark Gen. Oblig. 5.3% Aaa 3,500,000 3,558,485
9/1/16 (MBIA Insured)
North Brunswick Township Gen.
Oblig. Rfdg.:
5.25% 5/15/10 (FGIC Insured) Aaa 1,235,000 1,290,773
5.25% 5/15/11 (FGIC Insured) Aaa 1,290,000 1,339,020
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (A) PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
Ocean County Gen. Oblig. Aa2 $ 3,475,000 $ 3,621,471
Rfdg. 5% 10/1/09
Ocean County Util. Auth. Aa2 5,000,000 5,152,050
Wastewtr. Rev. Rfdg. 5.125%
1/1/10
Rutgers State Univ. of New A1 3,000,000 3,426,480
Jersey Rfdg. (State Univ. of
New Jersey) Series A, 6.4%
5/1/13
348,804,659
NEW YORK & NEW JERSEY - 9.7%
Port Auth. New York & New
Jersey Gen. Oblig.:
77th Series, 6.25% 1/15/27 (e) A1 5,000,000 5,241,500
92nd Series, 4.75% 1/15/29 A1 7,000,000 6,438,320
109th Series, 5.375% 1/15/32 A1 11,500,000 11,575,095
117th Series, 5.125% 11/15/11 Aaa 5,220,000 5,301,589
(FGIC Insured) (e)
Rfdg.:
94th Series, 5.7% 12/1/10 A1 6,385,000 6,783,488
107th Series:
6% 10/15/05 (e) A1 1,740,000 1,901,959
6% 10/15/06 (e) A1 1,535,000 1,687,103
38,929,054
PUERTO RICO - 2.3%
Puerto Rico Commonwealth Baa1 510,000 519,945
Infrastructure Fing. Auth.
Series A, 7.75% 7/1/08
Puerto Rico Commonwealth Gen. Baa1 2,000,000 2,125,660
Oblig. Rfdg. Series A, 6%
7/1/14
Puerto Rico Elec. Pwr. Auth. Aaa 4,000,000 4,069,840
Pwr. Rev. Series DD, 5%
7/1/12 (FSA Insured)
Puerto Rico Hsg. Fin. Corp. AA 2,290,000 2,365,753
Rev. (Multi-family Mtg.)
Series A I, 7.5% 4/1/22, LOC
Puerto Rico Govt. Dev. Bank
9,081,198
TOTAL MUNICIPAL BONDS 396,814,911
(Cost $379,838,666)
MUNICIPAL NOTES - 1.1%
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - 0.2%
New Jersey Econ. Dev. Auth. $ 800,000 $ 800,000
Wtr. Facilities Rev. Rfdg.
(United Wtr., Inc. Proj.)
Series C, 3.35% (AMBAC
Insured) (BPA Bank of New
York NA), VRDN (d)
NEW YORK & NEW JERSEY - 0.9%
Port Auth. New York & New 3,700,000 3,700,000
Jersey Spl. Oblig. Rev.
(Versatile Structure) Series
6, 3.3%, VRDN (d)(e)
TOTAL MUNICIPAL NOTES 4,500,000
(Cost $4,500,000)
TOTAL INVESTMENT IN $ 401,314,911
SECURITIES - 100%
(Cost $384,338,666)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT UNREALIZED GAIN/(LOSS)
SOLD
45 Bond Buyer Municipal Bond June 1999 $ 5,488,594 $ 54,574
Index Contracts
</TABLE>
The face value of futures sold as a percentage of investment in
securities - 1.4%
SECURITY TYPE ABBREVIATION
VRDN - VARIABLE RATE DEMAND NOTE
LEGEND
(a) Standard & Poor's(registered trademark) 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.
(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 $192,513.
(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.
SECURITY ACQUISITION DATE ACQUISITION COST
New Jersey Econ. Dev. Auth. 8/23/95 $ 1,953,920
Rev. (Edl. Testing Svc.)
Series B, 6.125% 5/15/15
(MBIA Insured) (Pre-Refunded
to 5/15/05 @ 102)
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A isues)
amounted to $2,228,660 or 0.6% of net assets.
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 79.1% AAA, AA, A 83.7%
Baa 5.5% BBB 7.0%
Ba 0.6% BB 0.0%
B 0.0% B 0.6%
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 3.5%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investments in securities, is as follows:
General Obligations 25.6%
Transportation 22.6
Water & Sewer 13.2
Health Care 8.5
Escrowed/Pre-Refunded 8.0
Housing 7.7
Others (individually less 14.4
than 5%)
100.0%
INCOME TAX INFORMATION
At May 31, 1999, the aggregate cost of investment securities for
income tax purposes was $384,338,666. Net unrealized appreciation
aggregated $16,976,245, of which $18,061,264 related to appreciated
investment securities and $1,085,019 related to depreciated investment
securities.
SPARTAN NEW JERSEY MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 401,314,911
value (cost $384,338,666) -
See accompanying schedule
Receivable for fund shares 3,239
sold
Interest receivable 7,276,085
TOTAL ASSETS 408,594,235
LIABILITIES
Payable to custodian bank $ 184,375
Payable for investments 2,267,320
purchased on a delayed
delivery basis
Payable for fund shares 416,416
redeemed
Distributions payable 416,617
Accrued management fee 189,870
Payable for daily variation 15,469
on futures contracts
Other payables and accrued 3,757
expenses
TOTAL LIABILITIES 3,493,824
NET ASSETS $ 405,100,411
Net Assets consist of:
Paid in capital $ 388,516,627
Accumulated undistributed net (447,035)
realized gain (loss) on
investments
Net unrealized appreciation 17,030,819
(depreciation) on investments
NET ASSETS, for 35,878,367 $ 405,100,411
shares outstanding
NET ASSET VALUE, offering $11.29
price and redemption price
per share ($405,100,411
(divided by) 35,878,367
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 10,377,659
EXPENSES
Management fee $ 1,102,385
Non-interested trustees' 679
compensation
Total expenses before 1,103,064
reductions
Expense reductions (7,697) 1,095,367
NET INTEREST INCOME 9,282,292
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (57,635)
Futures contracts 13,610 (44,025)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (7,271,024)
Futures contracts 89,224 (7,181,800)
NET GAIN (LOSS) (7,225,825)
NET INCREASE (DECREASE) IN $ 2,056,467
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions Custodian $ 6,826
credits
Transfer agent credits 871
$ 7,697
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30, 1998
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 9,282,292 $ 17,868,355
Net realized gain (loss) (44,025) 2,113,812
Change in net unrealized (7,181,800) 5,092,798
appreciation (depreciation)
NET INCREASE (DECREASE) IN 2,056,467 25,074,965
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (9,282,292) (17,868,355)
From net interest income
From net realized gain (2,030,613) (1,741,847)
TOTAL DISTRIBUTIONS (11,312,905) (19,610,202)
Share transactions Net 46,765,640 60,470,984
proceeds from sales of shares
Reinvestment of distributions 8,401,750 14,908,087
Cost of shares redeemed (30,524,502) (52,762,136)
NET INCREASE (DECREASE) IN 24,642,888 22,616,935
NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
Redemption fees 17,728 21,466
TOTAL INCREASE (DECREASE) 15,404,178 28,103,164
IN NET ASSETS
NET ASSETS
Beginning of period 389,696,233 361,593,069
End of period $ 405,100,411 $ 389,696,233
OTHER INFORMATION
Shares
Sold 4,072,806 5,270,314
Issued in reinvestment of 734,144 1,300,244
distributions
Redeemed (2,663,513) (4,606,133)
Net increase (decrease) 2,143,437 1,964,425
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.550 $ 11.380 $ 11.380 $ 11.420 $ 10.320
period
Income from Investment .265 .548 .561 .588 .623
Operations Net interest
income
Net realized and unrealized (.201) .224 .140 - 1.099
gain (loss)
Total from investment .064 .772 .701 .588 1.722
operations
Less Distributions
From net interest income (.265) (.548) (.561) (.588) (.623)
From net realized gain (.060) (.055) (.140) (.040) -
Total distributions (.325) (.603) (.701) (.628) (.623)
Redemption fees added to paid .001 .001 - - .001
in capital
Net asset value, end of $ 11.290 $ 11.550 $ 11.380 $ 11.380 $ 11.420
period
TOTAL RETURN B, C 0.55% 6.96% 6.44% 5.37% 17.06%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 405,100 $ 389,696 $ 361,593 $ 357,367 $ 366,569
(000 omitted)
Ratio of expenses to average .55% A .55% .55% .55% .55%
net assets
Ratio of expenses to average .55% A .54% D .55% .52% D .55%
net assets after expense
reductions
Ratio of net interest income 4.63% A 4.78% 5.00% 5.26% 5.64%
to average net assets
Portfolio turnover rate 6% A 12% 16% 57% 36%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.760
period
Income from Investment .637
Operations Net interest
income
Net realized and unrealized (1.291)
gain (loss)
Total from investment (.654)
operations
Less Distributions
From net interest income (.637)
From net realized gain (.150)
Total distributions (.787)
Redemption fees added to paid .001
in capital
Net asset value, end of $ 10.320
period
TOTAL RETURN B, C (5.86)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 327,060
(000 omitted)
Ratio of expenses to average .55%
net assets
Ratio of expenses to average .55%
net assets after expense
reductions
Ratio of net interest income 5.70%
to average net assets
Portfolio turnover rate 8%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
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
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PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN NJ MUNICIPAL MONEY 1.35% 2.85% 16.98% 34.89%
MARKET
New Jersey Tax-Free Money 1.18% 2.52% 15.16% n/a
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on 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 six months average
represents a peer group of 15 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN NJ MUNICIPAL MONEY 2.85% 3.19% 3.35%
MARKET
New Jersey Tax-Free Money 2.52% 2.84% n/a
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
5/31/99 3/1/99 11/30/98 8/31/98 6/1/98
Spartan New Jersey 2.76% 2.54% 2.84% 2.90% 3.27%
Municipal Money Market
New Jersey Tax-Free Money 2.49% 2.21% 2.51% 2.57% 2.99%
Market Funds Average
Spartan New Jersey 4.60% 4.21% 4.72% 4.84% 5.46%
Municipal Money Market -
Tax-equivalent
Portion of fund's income 3.36% 9.13% 6.95% 0.00% 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
table 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 1999 federal and state income tax rate of 40.08%
and reflects that a portion of the fund's income was subject to state
tax. 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 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 NEW JERSEY MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Scott Orr)
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 SIX MONTHS
THAT ENDED MAY 31, 1999?
A. As the period began, the market remained under the shadow of the
global turmoil that plagued it in the third and early fourth quarter
of 1998. There were a lot of questions about the pace of U.S. economic
growth and the direction of interest rates. However, early in the
period, market participants interpreted some signs to mean that the
economy would sustain the steady growth we've witnessed over the past
year. For example, in December, we saw reports that November's
employment data was stronger than expected. As the month went on, it
became more and more clear that the Federal Reserve Board would
discontinue the rapid-fire interest-rate cuts it had employed to boost
the markets from September through November 1998. Rates crept up from
that point through the end of the period, as market observers tried to
weigh what influence Fed action and emerging economic data might have
on the future course of interest rates.
Q. WHAT HAPPENED MORE RECENTLY, OVER THE LAST THREE MONTHS OF THE
PERIOD?
A. In March and April, data indicated that inflation might not be as
well-behaved as it had been in the recent past. Sentiment shifted from
the expectation that Fed policy was going to be unchanged to one
expecting a Fed rate increase. Such a hike would be employed by the
Fed to curb economic growth and diminish inflationary pressures. By
the end of May, the consensus viewpoint in the market was not "if" the
Fed would raise short-term interest rates, but "when." At its May Open
Market Committee meeting, the Fed added fuel to that fire when it
announced a bias toward raising rates.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. A recurring issue for this fund is the strong demand for very
short-term, variable-rate securities in New Jersey. Because of this
demand, issuers can keep the yields on these notes very low. I tend to
keep the fund's average maturity longer than the average of its
competitors by limiting investments in lower-yielding variable-rate
securities and taking advantage of opportunities in the six- to
12-month area. Given the uncertainty in the markets last fall, the
fund began the period with an average maturity of 57 days, roughly
equal to its competitors. The maturity dipped down to the 40-day range
in the middle of the period, but moved out gradually as I bought
longer-term money market securities that adequately reflected my
expectations for higher interest rates. Locking in those yields helped
the fund's performance. 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 will be taxable at the state level this year
because of the out-of-state investments, I pursued this strategy so
the fund could provide higher yields on a tax-adjusted basis than if I
had chosen to invest the same assets in significantly lower-yielding
tax-exempt New Jersey securities.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1999, was 2.76%, compared to
2.84% six months ago. The more recent seven-day yield was the
equivalent of a 4.60% taxable rate of return for New Jersey investors
in the 40.08% combined state and federal income tax bracket, and
reflects that a portion of the fund's income was subject to state
taxes. Through May 31, 1999, the fund's six-month total return was
1.35%, compared to 1.18% for the New Jersey tax-free money market
funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. As of the end of May, the economy remains strong, labor markets are
tight and inflation looks like it might not be as subdued as it has
been. In addition, the Fed has announced its inclination to raise
interest rates to stave off inflationary pressures. I believe the Fed
will make such a move, probably at either its June or August Open
Market Committee meeting. Once the Fed raises rates, it may continue
some sort of interest-rate-hike approach to slow the economy, given
its strength and the Fed's desire to quash inflation spurred by rapid
economic growth and a tight labor market. It's conceivable the Fed
would look to erase the effects of its rate cuts in late 1998, which
were implemented largely to provide liquidity to the markets, not to
supply fuel to the economy. In addition, the Fed may want to implement
its policy well in advance of the new year, in an attempt to avoid
changing interest-rate policy during a time when potential Year 2000
computer problems may occur. Indeed, a concern as we move toward the
end of the year is the Year 2000 issue and its possible impact on
municipal securities. As one of many factors we look at, we'll be
paying close attention to this issue in the months ahead.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
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 May 31, 1999,
more than $494 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1989
(checkmark)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
<TABLE>
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MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 5/31/99 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS
11/30/98 5/31/98
0 - 30 68 61 71
31 - 90 11 12 6
91 - 180 4 16 6
181 - 397 17 11 17
WEIGHTED AVERAGE MATURITY
5/31/99 11/30/98 5/31/98
Spartan New Jersey Municipal 65 DAYS 57 Days 63 Days
Money Market Fund
New Jersey Tax-Free Money 55 DAYS 56 Days 50 Days
Market Funds Average *
</TABLE>
<TABLE>
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ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF MAY 31, 1999 AS OF NOVEMBER 30, 1998
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 61.5% (VRDNs) 54.0%
Commercial Paper (including Commercial Paper (including
CP Mode) 9.0% CP Mode) 11.5%
Tender Bonds 0.6% Tender Bonds 0.5%
Municipal Notes 28.9% Municipal Notes 26.4%
Other 0.0% Other 7.6%
Row: 1, Col: 1, Value: 61.5 Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 3, Value: 9.0 Row: 1, Col: 3, Value: 11.5
Row: 1, Col: 5, Value: 1.0 Row: 1, Col: 5, Value: 1.0
Row: 1, Col: 7, Value: 28.5 Row: 1, Col: 7, Value: 26.0
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 7.5
</TABLE>
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
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MUNICIPAL SECURITIES - 100.0%
PRINCIPAL AMOUNT VALUE (NOTE 1)
ILLINOIS - 0.4%
Madison County Envir. Impt. $ 1,800,000 $ 1,800,000
Rev. (Shell Wood Proj.)
Series A, 3.45% VRDN (a)(b)
NEW JERSEY - 74.1%
Bethlehem Township Gen. 2,750,000 2,752,522
Oblig. BAN 3.75% 9/21/99
Bloomfield Township Gen. 4,200,000 4,200,000
Oblig. BAN 3.8% 6/1/99
Brick Township Gen. Oblig. 6,700,000 6,720,260
BAN 3.4% 5/12/00
Burlington County Gen. Oblig. 2,136,000 2,143,341
BAN 3.5% 4/21/00
Camden County Impt. Auth. Rev.:
(Jewish Cmnty. Ctr. Proj.) 1,000,000 1,000,000
Series 1995, 3.2%, LOC
Nat'l. Westminster Bank PLC,
VRDN (a)
(Parkview Redev. Hsg. Proj.) 6,800,000 6,800,000
3.25%, LOC Gen. Elec. Cap.
Corp., VRDN (a)(b)
Clifton Gen. Oblig. BAN 3.5% 1,700,000 1,706,584
3/31/00
Cranford Township Gen. Oblig. 2,295,634 2,303,572
BAN 3.5% 3/17/00
Delaware River Port Auth. 2,900,000 2,900,000
Pennsylvania & New Jersey
Rev. Participating VRDN
Series SG 53, 3.32%
(Liquidity Facility Societe
Generale, France) (a)(c)
Dover Gen. Oblig. BAN 4% 3,514,950 3,516,623
7/16/99
East Brunswick Township Gen.
Oblig. BAN:
3.25% 3/31/00 6,547,000 6,560,196
4% 7/28/99 4,000,000 4,002,349
Englewood Gen. Oblig. BAN 4% 2,548,500 2,549,713
7/16/99
Fair Lawn Gen. Oblig. BAN 4,000,000 4,004,613
3.25% 12/16/99
Hopatcong Gen. Oblig. BAN 4% 3,500,000 3,500,221
6/11/99
Hudson County Impt. Auth. 24,960,000 24,960,000
Rev. (Essential Purp. Pooled
Govt. Ln. Prog.) Series
1986, 3.15%, LOC Comerica
Bank, Detroit, VRDN (a)
Margate City Gen. Oblig. BAN 2,194,500 2,200,714
3.5% 3/24/00
Medford Township Gen. Oblig. 3,000,000 3,000,526
BAN 3.13% 1/7/00
Mercer County Impt. Auth. 11,000,000 11,000,000
Rev. (Atlantic Foundation &
Johnson Proj.) Series 1998,
3.22% (MBIA Insured), VRDN
(a)
Middlesex County Gen. Oblig. 20,600,000 20,619,529
BAN 3.25% 1/24/00
Monroe Township Middlesex 3,100,000 3,101,680
County Gen. Oblig. BAN 4%
7/28/99
Montclair Township Gen.
Oblig. BAN:
3.4% 2/15/00 3,000,000 3,007,415
3.5% 1/21/00 3,537,000 3,547,544
Montgomery Township Gen. 3,122,160 3,125,503
Oblig. BAN Series 1998,
3.25% 12/10/99
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
Moorestown Township Gen.
Oblig. BAN:
3.5% 6/2/00 $ 3,900,000 $ 3,911,271
3.75% 6/4/99 3,000,000 3,000,063
New Jersey Econ. Dev. Auth.
Econ. Dev. Rev.:
(Arden Group) Series 1989 BB, 1,350,000 1,350,000
3.2%, LOC PNC Bank NA, VRDN
(a)(b)
(Composite Issue) Series 1989 50,000 50,000
B, 3.2%, LOC PNC Bank NA,
VRDN (a)(b)
(Ctr. for Aging Applewood 2,125,000 2,125,000
Proj.) Series 1989, 3.35%,
LOC Fleet Nat'l. Bank, VRDN
(a)
(Dial Realty) Series 1988 L, 1,850,000 1,850,000
3.2%, LOC PNC Bank NA, VRDN
(a)(b)
(Guttenplan's Bakery) Series 1,750,000 1,750,000
1989 G, 3.2%, LOC PNC Bank
NA, VRDN (a)(b)
(Herzel Mor Corp.) Series 400,000 400,000
1989 L, 3.2%, LOC PNC Bank
NA, VRDN (a)(b)
(Newark LLC) Series 1998, 6,000,000 6,000,000
3.05% (AMBAC Insured), VRDN
(a)(b)
(Pictorial Offset Corp.) 400,000 400,000
Series 1989 H, 3.2%, LOC
PNC Bank NA, VRDN (a)(b)
(PVC Container Corp.) Series 1,865,000 1,865,000
1987 D, 3.3%, VRDN (a)(b)
(Recycle, Inc. Proj.) Series 4,300,000 4,300,000
1995, 3.5%, LOC Fleet Bank
NA, VRDN (a)(b)
New Jersey Econ. Dev. Auth.
Ind. & Econ. Dev. Rev.:
(Block Drug Corp.) Series A, 715,000 715,000
3.3%, LOC SunTrust Bank of
Atlanta, VRDN (a)
(Casa DiBertacchi Corp. 200,000 200,000
Facilities) Series 1988,
3.4%, VRDN (a)(b)
New Jersey Econ. Dev. Auth. 650,000 650,000
Ind. Dev. Rev. (Nat'l.
Refrigerant) Series 1994 A,
3.3%, LOC First Union Nat'l.
Bank of North Carolina, VRDN
(a)(b)
New Jersey Econ. Dev. Auth.
Rev.:
Bonds:
(Chambers Cogeneration LTP 12,200,000 12,200,000
1991 Proj.) 3.05% tender
8/11/99, LOC Cr. Local de
France, CP mode (b)
(Keystone Proj.) Series 1992, 5,100,000 5,100,000
3.05% tender 9/10/99, LOC
UBS AG, CP mode (b)
Participating VRDN Series PA 3,095,000 3,095,000
453, 3.27% (a)(c)
(Bayshore Health Ctr.) Series 4,655,000 4,655,000
1998 A, 3.25%, LOC
Kredietbank NV, VRDN (a)
(E.P. Henry Corp. Proj.) 695,000 695,000
3.15%, VRDN (a)(b)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth.
Rev.: - continued
(Eastern Silk) 2nd Series D2, $ 1,160,000 $ 1,160,000
3.35%, LOC Banque Nationale
de Paris, VRDN (a)(b)
(Jewish Home Rockleigh Proj.) 7,000,000 7,000,000
Series B, 3.2%, LOC PNC Bank
NA, VRDN (a)
New Jersey Econ. Dev. Auth.
Wtr. Facilities Rev.:
Participating VRDN:
Series FR/RI 34, 3.35% 8,415,000 8,415,000
(Liquidity Facility Bank of
New York NA) (a)(b)(c)
Series FR/RI 35, 3.35% 1,500,000 1,500,000
(Liquidity Facility Bank of
New York NA) (a)(b)(c)
(Elizabethtown Wtr. Co.) 2,500,000 2,500,000
Series 1997 B, 3.15% (AMBAC
Insured) (BPA Bank of New
York NA), VRDN (a)(b)
New Jersey Edl. Facilities
Auth. Rev.:
(College of New Jersey) 8,000,000 8,000,000
Series 1999 A, 3.2% (AMBAC
Insured), VRDN (a)
Series 1997 A, 3% 8/10/99, CP 2,600,000 2,600,000
New Jersey Gen. Oblig. 3.25% 14,400,000 14,400,000
6/1/99, CP
New Jersey Higher Ed. Auth. 2,800,000 2,800,000
Student Ln. Rev. Bonds (New
Jersey Class Ln. Prog.)
Series 1997 B, 3.75%, tender
6/1/99 (MBIA Insured) (BPA
Landesbank Hessen-Thuringen)
(b)
New Jersey Hsg. & Mtg. Fin. 7,595,000 7,595,000
Agcy. Participating VRDN
Series 94C 3003, 3.39%
(Liquidity Facility
Citibank, New York NA)
(a)(b)(c)
New Jersey Hsg. & Mtg. Fin.
Rev. Participating VRDN:
Series PA 117, 3.32% 4,150,000 4,150,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(b)(c)
Series PT 118, 3.32% 29,055,000 29,054,999
(Liquidity Facility Banco
Santander SA) (a)(b)(c)
Series PT 92, 3.32% 6,880,000 6,880,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(b)(c)
New Jersey Sport and 4,600,000 4,600,000
Exposition Auth. Rev.
Participating VRDN Series
FR/RI A3, 3.35% (a)(c)
New Jersey Tpk. Auth. Tpk. 5,600,000 5,600,000
Rev. Participating VRDN
Series PA 440, 3.27%
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(c)
New Jersey Trans. Trust Fund
Auth. Participating VRDN:
Series 1998-82, 3.27% (a)(c) 2,000,000 2,000,000
Series PA 499, 3.3% (a)(c) 2,500,000 2,500,000
Old Bridge Township New 3,000,000 3,002,368
Jersey BAN 3.25% 10/20/99
Rahway New Jersey Gen. Oblig. 3,202,000 3,207,579
BAN 3.75% 10/8/99
Readington Township Gen. 4,900,000 4,913,772
Oblig. BAN 3.4% 4/28/00
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
Ringwood Boro Gen. Oblig. BAN $ 2,388,000 $ 2,396,618
3.5% 3/17/00
Salem County Ind. Poll. Cont.
Fing. Auth. Poll. Cont. Rev.:
Bonds (Philadelphia Elec. 2,200,000 2,200,000
Co.) Series 1993 A, 3%
tender 8/12/99, LOC Toronto
Dominion Bank, CP mode (b)
Participating VRDN Series PA 6,760,000 6,760,000
357, 3.27% (a)(c)
Secaucus Gen. Oblig. BAN 3.4% 3,009,500 3,015,760
6/1/00
South Plainfield Gen. Oblig. 4,500,000 4,502,096
BAN 4% 7/20/99
Union County Gen. Oblig. BAN 2,860,000 2,860,094
3.63% 7/14/99
Union County Util. Auth. 6,200,000 6,200,000
Solid Waste Facilities Lease
Rev. Participating VRDN
Series FR/RI 38, 3.35%
(a)(b)(c)
Vernon Township School 7,000,000 7,013,132
District BAN 3.5% 12/3/99
Wall Township Gen. Oblig. BAN 2,900,000 2,900,528
Series B, 4% 6/24/99
Warren Co. Gen. Oblig. BAN 2,199,921 2,200,633
3.17% 4/7/00
Washington Township Gen. 4,500,000 4,504,213
Oblig. BAN 3.25% 11/15/99
Woodbridge Township Gen. 11,000,000 11,006,526
Oblig. BAN 4% 7/30/99
360,972,557
NEW YORK & NEW JERSEY - 22.5%
Port Auth. New York & New
Jersey:
Participating VRDN:
Series 6:
3.37% (Liquidity Facility 20,955,000 20,955,000
Societe Generale, France)
(a)(b)(c)
Series FR/RI 16, 3.3% 8,000,000 8,000,000
(Liquidity Facility Bank of
New York NA) (a)(b)(c)
Series SG 117, 3.37% 6,900,000 6,900,000
(Liquidity Facility Societe
Generale, France) (a)(b)(c)
(Versatile Structure):
Series 1R, 3.45%, VRDN (a)(b) 600,000 600,000
Series 3, 3.35%, VRDN (a) 6,800,000 6,800,000
Series 5, 3.35%, VRDN (a) 4,300,000 4,300,000
3.25% (BPA Morgan Guaranty 2,100,000 2,100,000
Trust Co., NY), VRDN (a)
Port Auth. New York & New
Jersey Gen. Oblig.:
Participating VRDN:
Series PT 232, 3.37% 3,925,000 3,925,000
(Liquidity Facility
Commerzbank AG) (a)(b)(c)
Series RI 3, 3.3% (Liquidity 2,100,000 2,100,000
Facility Bank of New York
NA) (a)(b)(c)
Series 1991, 3.41%, VRDN 6,400,000 6,400,000
(a)(b)(d)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW YORK & NEW JERSEY -
CONTINUED
Port Auth. New York & New
Jersey Gen. Oblig.: -
continued
Series 1992, 3.225%, VRDN $ 6,900,000 $ 6,900,000
(a)(d)
Series 1995 1, 3.2%, VRDN (a) 5,000,000 5,000,000
Series 1995, 3.225%, VRDN 10,500,000 10,500,000
(a)(b)(d)
Series 1996 3, 3.2%, VRDN (a) 5,000,000 5,000,000
Series 1997 1B, 3.2%, VRDN (a) 3,200,000 3,200,000
Series 1997 2, 3.225%, VRDN 10,400,000 10,400,000
(a)(d)
Series A:
3% 8/9/99, CP (b) 4,600,000 4,600,000
3.1% 9/14/99, CP (b) 1,900,000 1,900,000
109,580,000
TEXAS - 2.8%
Harris County Gen. Oblig. 11,900,000 11,900,000
3.25% (BPA Morgan Guaranty
Trust Co., NY), VRDN (a)
West Side Calhoun County 1,600,000 1,600,000
Naval District Sewerage
Solid Waste Disp. Rev. (BP
Chemicals, Inc. Proj.)
Series 1996, 3.45% VRDN
(a)(b)
13,500,000
VIRGINIA - 0.2%
Dinwiddie County Ind. Dev. 950,000 950,000
Auth. Rev. (Chaparral Steel
Proj.) Series 1998 A, 3.5%,
LOC NationsBank NA, VRDN
(a)(b)
TOTAL INVESTMENT IN $ 486,802,557
SECURITIES - 100%
Total Cost for Income Tax Purposes $ 486,802,557
</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) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
SECURITY ACQUISITION DATE COST
Port Auth. New York & New 6/18/91 $ 6,400,000
Jersey Gen. Oblig. VRDN:
Series 1991, 3.41%
Series 1992, 3.225% 2/14/92 $ 6,900,000
Series 1995, 3.225% 9/15/95 $ 10,500,000
Series 1997 2, 3.225% 9/15/97 $ 10,400,000
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A
issues) amounted to $34,200,000 or 6.9% of net assets.
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.
SPARTAN NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 486,802,557
value - See accompanying
schedule
Cash 26,995
Receivable for investments 10,078,932
sold
Receivable for fund shares 1,775,772
sold
Interest receivable 4,388,821
TOTAL ASSETS 503,073,077
LIABILITIES
Payable for investments $ 6,927,031
purchased
Payable for fund shares 1,344,361
redeemed
Distributions payable 73,928
Accrued management fee 208,953
Other payables and accrued 3,296
expenses
TOTAL LIABILITIES 8,557,569
NET ASSETS $ 494,515,508
Net Assets consist of:
Paid in capital $ 494,572,231
Accumulated undistributed net (56,723)
realized gain (loss) on
investments
NET ASSETS, for 494,545,036 $ 494,515,508
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($494,515,508
(divided by) 494,545,036
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 8,134,078
EXPENSES
Management fee $ 1,276,764
Non-interested trustees' 895
compensation
Total expenses before 1,277,659
reductions
Expense reductions (4,150) 1,273,509
NET INTEREST INCOME 6,860,569
NET REALIZED GAIN (LOSS) ON 13,699
INVESTMENTS
NET INCREASE (DECREASE) IN $ 6,874,268
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions
Custodian credits $ 1,536
Transfer agent credits 2,614
$ 4,150
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
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SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 6,860,569 $ 15,704,226
Net realized gain (loss) 13,699 672
NET INCREASE (DECREASE) IN 6,874,268 15,704,898
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (6,860,569) (15,704,226)
from net interest income
Share transactions at net 195,552,266 474,746,691
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 6,468,336 15,281,562
distributions from net
interest income
Cost of shares redeemed (236,008,323) (485,904,369)
NET INCREASE (DECREASE) IN (33,987,721) 4,123,884
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (33,974,022) 4,124,556
IN NET ASSETS
NET ASSETS
Beginning of period 528,489,530 524,364,974
End of period $ 494,515,508 $ 528,489,530
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 F 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .013 .030 .003 .032
Operations Net interest
income
Less Distributions
From net interest income (.013) (.030) (.003) (.032)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 1.35% 3.06% 0.27% 3.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 494,516 $ 528,490 $ 524,365 $ 520,551
(000 omitted)
Ratio of expenses to average .50% A .50% .50% A .40% D
net assets
Ratio of expenses to average .50% A .50% .50% A .40%
net assets after expense
reductions
Ratio of net interest income 2.68% A 3.02% 3.28% A 3.15%
to average net assets
</TABLE>
<TABLE>
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FINANCIAL HIGHLIGHTS
1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .032 .036 .024
Operations Net interest
income
Less Distributions
From net interest income (.032) (.036) (.024)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 3.24% 3.65% 2.45%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 504,875 $ 469,834 $ 395,935
(000 omitted)
Ratio of expenses to average .35% D .31% D .28% D
net assets
Ratio of expenses to average .34% E .31% .28%
net assets after expense
reductions
Ratio of net interest income 3.20% 3.59% 2.44%
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.
F FOR THE ONE MONTH ENDED NOVEMBER 30.
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
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
<TABLE>
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PERIODS ENDED MAY 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY NJ MUNICIPAL MONEY 1.29% 2.74% 15.64% 38.96%
MARKET
New Jersey Tax-Free Money 1.18% 2.52% 15.16% n/a
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 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 six months average represents a peer group of 15
money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY NJ MUNICIPAL MONEY 2.74% 2.95% 3.35%
MARKET
New Jersey Tax-Free Money 2.52% 2.84% n/a
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
5/31/99 3/1/99 11/30/98 8/31/98 6/1/98
Fidelity New Jersey Municipal 2.66% 2.44% 2.72% 2.82% 3.17%
Money Market Fund
New Jersey Tax-Free Money 2.49% 2.21% 2.51% 2.57% 2.99%
Market Funds Average
Fidelity New Jersey Municipal 4.43% 4.02% 4.51% 4.71% 5.29%
Money Market Fund -
Tax-equivalent
Portion of fund's income 3.51% 17.39% 9.36% 0.00% 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
table 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 1999 federal and state income tax
rate of 40.08% and reflects that a portion of the fund's income was
subject to state tax. 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
(photograph of Scott Orr)
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 SIX MONTHS
THAT ENDED MAY 31, 1999?
A. As the period began, the market remained under the shadow of the
global turmoil that plagued it in the third and early fourth quarter
of 1998. There were a lot of questions about the pace of U.S. economic
growth and the direction of interest rates. However, early in the
period, market participants interpreted some signs to mean that the
economy would sustain the steady growth we've witnessed over the past
year. For example, in December, we saw reports that November's
employment data was stronger than expected. As the month went on, it
became more and more clear that the Federal Reserve Board would
discontinue the rapid-fire interest-rate cuts it had employed to boost
the markets from September through November 1998. Rates crept up from
that point through the end of the period, as market observers tried to
weigh what influence Fed action and emerging economic data might have
on the future course of interest rates.
Q. WHAT HAPPENED MORE RECENTLY, OVER THE LAST THREE MONTHS OF THE
PERIOD?
A. In March and April, data indicated that inflation might not be as
well-behaved as it had been in the recent past. Sentiment shifted from
the expectation that Fed policy was going to be unchanged to one
expecting a Fed rate increase. Such a hike would be employed by the
Fed to curb economic growth and diminish inflationary pressures. By
the end of May, the consensus viewpoint in the market was not "if" the
Fed would raise short-term interest rates, but "when." At its May Open
Market Committee meeting, the Fed added fuel to that fire when it
announced a bias toward raising rates.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. A recurring issue for this fund is the strong demand for very
short-term, variable-rate securities in New Jersey. Because of this
demand, issuers can keep the yields on these notes very low. I tend to
keep the fund's average maturity longer than the average of its
competitors by limiting investments in lower-yielding variable-rate
securities and taking advantage of opportunities in the six- to
12-month area. Given the uncertainty in the markets last fall, the
fund began the period with an average maturity of 56 days, roughly
equal to its competitors. The maturity dipped down to the 40-day range
in the middle of the period, but moved out gradually as I bought
longer-term money market securities that adequately reflected my
expectations for higher interest rates. Locking in those yields helped
the fund's performance. 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 will be taxable at the state level this year
because of the out-of-state investments, I pursued this strategy so
the fund could provide higher yields on a tax-adjusted basis than if I
had chosen to invest the same assets in significantly lower-yielding
tax-exempt New Jersey securities.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on May 31, 1999, was 2.66%, compared to
2.72% six months ago. The more recent seven-day yield was the
equivalent of a 4.43% taxable rate of return for New Jersey investors
in the 40.08% combined state and federal income tax bracket, and
reflects that a portion of the fund's income was subject to state
taxes. Through May 31, 1999, the fund's six-month total return was
1.29%, compared to 1.18% for the New Jersey tax-free money market
funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. As of the end of May, the economy remains strong, labor markets are
tight and inflation looks like it might not be as subdued as it has
been. In addition, the Fed has announced its inclination to raise
interest rates to stave off inflationary pressures. I believe the Fed
will make such a move, probably at either its June or August Open
Market Committee meeting. Once the Fed raises rates, it may continue
some sort of interest-rate-hike approach to slow the economy, given
its strength and the Fed's desire to quash inflation spurred by rapid
economic growth and a tight labor market. It's conceivable the Fed
would look to erase the effects of its rate cuts in late 1998, which
were implemented largely to provide liquidity to the markets, not to
supply fuel to the economy. In addition, the Fed may want to implement
its policy well in advance of the new year, in an attempt to avoid
changing interest-rate policy during a time when potential Year 2000
computer problems may occur. Indeed, a concern as we move toward the
end of the year is the Year 2000 issue and its possible impact on
municipal securities. As one of many factors we look at, we'll be
paying close attention to this issue in the months ahead.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
FUND FACTS
GOAL: high current tax-free
income while maintaining
share price stability by
investing in high-quality,
short-term New Jersey
municipal money market
securities
FUND NUMBER: 417
TRADING SYMBOL: FNJXX
START DATE: March 17, 1988
SIZE: as of May 31, 1999,
more than $657 million
MANAGER: Scott Orr, since
1997; manager, various
Fidelity and Spartan
municipal money market
funds; joined Fidelity in
1989
(checkmark)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
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MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 5/31/99 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 5/31/99
11/30/98
0 - 30 65 63 71
31 - 90 11 11 6
91 - 180 6 16 7
181 - 397 18 10 16
WEIGHTED AVERAGE MATURITY
5/31/99 11/30/98 5/31/98
Fidelity New Jersey Municipal 69 DAYS 56 Days 62 Days
Money Market Fund
New Jersey Tax-Free Money 55 DAYS 56 Days 50 Days
Market Funds Average *
</TABLE>
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ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF MAY 31, 1999 AS OF NOVEMBER 30, 1998
Variable Rate Demand Notes Variable Rate Demand Notes
(VRDNs) 59.6% (VRDNs) 52.9%
Commercial Paper (including Commercial Paper (including
CP Mode) 11.8% CP Mode) 11.8%
Tender Bonds 0.4% Tender Bonds 0.5%
Municipal Notes 27.8% Municipal Notes 24.8%
Other 0.4% Other 10.0%
Row: 1, Col: 1, Value: 59.6 Row: 1, Col: 1, Value: 52.9
Row: 1, Col: 3, Value: 11.8 Row: 1, Col: 3, Value: 11.3
Row: 1, Col: 5, Value: 0.4 Row: 1, Col: 5, Value: 1.0
Row: 1, Col: 7, Value: 27.8 Row: 1, Col: 7, Value: 24.6
Row: 1, Col: 8, Value: 0.4 Row: 1, Col: 8, Value: 10.0
</TABLE>
*SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
INVESTMENTS MAY 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
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MUNICIPAL SECURITIES - 100.0%
PRINCIPAL AMOUNT VALUE (NOTE 1)
GEORGIA - 0.6%
Burke County Dev. Auth. Poll. $ 700,000 $ 700,000
Cont. Rev. (Georgia Pwr.
Co.) Series 1994 4, 3.45%,
VRDN (a)
Monroe County Dev. Auth. 3,350,000 3,350,000
Poll. Cont. Rev. (Georgia
Pwr. Co.) 2nd Series, 3.45%,
VRDN (a)
4,050,000
ILLINOIS - 0.2%
Madison County Envir. Impt. 1,100,000 1,100,000
Rev. (Shell Wood Proj.)
Series A, 3.45% VRDN (a)(b)
LOUISIANA - 0.2%
Saint Charles Parish Poll. 1,600,000 1,600,000
Cont. Rev. (Shell Oil
Co.-Norco Proj.) Series
1991, 3.45%, VRDN (a)(b)
NEW JERSEY - 75.8%
Bethlehem Township Gen. 2,760,000 2,762,531
Oblig. BAN 3.75% 9/21/99
Bloomfield Township Gen. 4,300,000 4,300,000
Oblig. BAN 3.8% 6/1/99
Brick Township Gen. Oblig. 8,781,000 8,807,553
BAN 3.4% 5/12/00
Burlington County Gen. Oblig. 2,800,000 2,809,624
BAN 3.5% 4/21/00
Camden County Impt. Auth. Rev.:
(Jewish Cmnty. Ctr. Proj.) 2,000,000 2,000,000
Series 1995, 3.2%, LOC
Nat'l. Westminster Bank PLC,
VRDN (a)
(Parkview Redev. Hsg. Proj.) 6,000,000 6,000,000
3.25%, LOC Gen. Elec. Cap.
Corp., VRDN (a)(b)
Clifton Gen. Oblig. BAN 3.5% 2,300,000 2,308,908
3/31/00
Cranford Township Gen. Oblig. 3,000,000 3,010,373
BAN 3.5% 3/17/00
Delaware River Port Auth. 3,540,000 3,540,000
Pennsylvania & New Jersey
Rev. Participating VRDN
Series SG 53, 3.32%
(Liquidity Facility Societe
Generale, France) (a)(c)
Dover Gen. Oblig. BAN 4% 3,600,000 3,601,713
7/16/99
East Brunswick Township Gen.
Oblig. BAN:
3.25% 3/31/00 8,500,000 8,517,132
4% 7/28/99 4,000,000 4,002,349
Englewood Gen. Oblig. BAN 4% 2,600,000 2,601,237
7/16/99
Fair Lawn Gen. Oblig. BAN 4,563,500 4,568,763
3.25% 12/16/99
Fairfield Township Gen. 2,025,000 2,028,151
Oblig. BAN 3.4% 3/22/00
Hopatcong Gen. Oblig. BAN 4% 3,500,000 3,500,221
6/11/99
Hudson County Impt. Auth. 28,795,000 28,794,999
Rev. (Essential Purp. Pooled
Govt. Ln. Prog.) Series
1986, 3.15%, LOC Comerica
Bank, Detroit, VRDN (a)
Lakewood Township Gen. Oblig. 3,172,788 3,176,994
BAN 3.4% 1/14/00
Margate City Gen. Oblig. BAN 2,700,000 2,707,646
3.5% 3/24/00
Medford Township Gen. Oblig. 3,500,000 3,500,613
BAN 3.13% 1/7/00
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
Mercer County Impt. Auth. $ 16,000,000 $ 16,000,000
Rev. (Atlantic Foundation &
Johnson Proj.) Series 1998,
3.22% (MBIA Insured), VRDN
(a)
Middlesex County Gen. Oblig. 27,200,000 27,225,786
BAN 3.25% 1/24/00
Monroe Township Middlesex 3,182,206 3,183,930
County Gen. Oblig. BAN 4%
7/28/99
Montclair Township Gen.
Oblig. BAN:
3.4% 2/15/00 4,000,000 4,009,886
3.5% 1/21/00 4,323,000 4,335,887
3.5% 3/10/00 1,671,000 1,677,008
Montgomery Township Gen. 3,500,000 3,503,748
Oblig. BAN Series 1998,
3.25% 12/10/99
Moorestown Township Gen.
Oblig. BAN:
3.5% 6/2/00 5,200,000 5,215,028
3.75% 6/4/99 3,000,000 3,000,063
New Jersey Econ. Dev. Auth.
Econ. Dev. Rev.:
(Ctr. for Aging Applewood 2,275,000 2,275,000
Proj.) Series 1989, 3.35%,
LOC Fleet Nat'l. Bank, VRDN
(a)
(Headquarters Proj.) Series 5,100,000 5,100,000
1997, 3.1%, VRDN (a)
(Newark LLC) Series 1998, 9,800,000 9,800,000
3.05% (AMBAC Insured), VRDN
(a)(b)
(PVC Container Corp.) Series 1,035,000 1,035,000
1987 D, 3.3%, VRDN (a)(b)
New Jersey Econ. Dev. Auth. 300,000 300,000
Ind. & Econ. Dev. Rev. (Casa
DiBertacchi Corp.
Facilities) Series 1988,
3.4%, VRDN (a)(b)
New Jersey Econ. Dev. Auth. 3,000,000 3,000,000
Poll. Cont. Rev. (Hoffman-LA
Roche Proj.) Series 1985,
3.25%, LOC Wachovia Bank NA,
VRDN (a)
New Jersey Econ. Dev. Auth.
Rev.:
Bonds (Chambers Cogeneration
LTP 1991 Proj.):
3% tender 8/9/99, LOC Cr. 3,600,000 3,600,000
Local de France, CP mode (b)
3.05% tender 8/11/99, LOC Cr. 16,300,000 16,300,000
Local de France, CP mode (b)
3.05% tender 8/12/99, LOC Cr. 3,200,000 3,200,000
Local de France, CP mode (b)
3.05% tender 9/10/99, LOC Cr. 11,100,000 11,100,000
Local de France, CP mode (b)
3.1% tender 9/14/99, LOC Cr. 3,000,000 3,000,000
Local de France, CP mode (b)
Participating VRDN Series PA 3,400,000 3,400,000
453, 3.27% (a)(c)
(Bayshore Health Ctr.) Series 4,600,000 4,600,000
1998 A, 3.25%, LOC
Kredietbank NV, VRDN (a)
(Jewish Home Rockleigh Proj.) 7,430,000 7,430,000
Series B, 3.2%, LOC PNC Bank
NA, VRDN (a)
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Econ. Dev. Auth.
Wtr. Facilities Rev.:
Participating VRDN Series $ 10,000,000 $ 10,000,000
FR/RI 35, 3.35% (Liquidity
Facility Bank of New York
NA) (a)(b)(c)
Rfdg. (United Wtr., Inc. 13,200,000 13,200,000
Proj.) Series 1996 C, 3.45%
(AMBAC Insured) (BPA Bank of
New York NA), VRDN (a)(b)
New Jersey Edl. Facilities
Auth. Rev.:
Participating VRDN Series SG 3,800,000 3,800,000
48, 3.27% (Liquidity
Facility Societe Generale,
France) (a)(c)
(College of New Jersey) 22,455,000 22,455,000
Series 1999 A, 3.2% (AMBAC
Insured), VRDN (a)
Series 1997 A, 3% 8/10/99, CP 3,400,000 3,400,000
New Jersey Gen. Oblig.:
3.15% 6/15/99, CP 5,300,000 5,300,000
3.25% 6/1/99, CP 15,600,000 15,600,000
New Jersey Higher Ed. Auth.:
Participating VRDN Series 2,100,000 2,100,000
1998 18, 3.37% (Liquidity
Facility Morgan Stanley,
Dean Witter & Co.) (a)(c)
Student Ln. Rev. Bonds (New 2,600,000 2,600,000
Jersey Class Ln. Prog.)
Series 1997 B, 3.75%, tender
6/1/99 (MBIA Insured) (BPA
Landesbank Hessen-Thuringen)
(b)
New Jersey Hsg. & Mtg. Fin. 6,800,000 6,800,000
Agcy. Participating VRDN
Series 94C 3003, 3.39%
(Liquidity Facility
Citibank, New York NA)
(a)(b)(c)
New Jersey Hsg. & Mtg. Fin.
Rev. Participating VRDN:
Series PA 117, 3.32% 3,720,000 3,720,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(b)(c)
Series PT 118, 3.32% 23,310,000 23,310,000
(Liquidity Facility Banco
Santander SA) (a)(b)(c)
Series PT 80, 3.27% 9,205,000 9,205,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(c)
Series PT 92, 3.32% 10,410,000 10,410,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(b)(c)
New Jersey Sport and 6,100,000 6,100,000
Exposition Auth. Rev.
Participating VRDN Series
FR/RI A3, 3.35% (a)(c)
New Jersey Tpk. Auth. Tpk. 12,200,000 12,200,000
Rev. Participating VRDN
Series PA 440, 3.27%
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(c)
New Jersey Trans. Corp. 2,675,000 2,675,000
Series A, 4.625% 9/1/99
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Trans. Trust Fund
Auth. Participating VRDN:
Series 1998-82, 3.27% (a)(c) $ 10,000,000 $ 10,000,000
Series PA 505, 3.3% (a)(c) 5,410,000 5,410,000
North Brunswick Township BAN 2,920,000 2,922,687
4% 8/27/99
Old Bridge Township Gen. 3,400,000 3,402,684
Oblig. New Jersey BAN 3.25%
10/20/99
Rahway New Jersey Gen. Oblig. 3,500,000 3,506,098
BAN 3.75% 10/8/99
Readington Township Gen. 6,439,000 6,457,098
Oblig. BAN 3.4% 4/28/00
Ringwood Boro Gen. Oblig. BAN 3,000,000 3,010,827
3.5% 3/17/00
Salem County Ind. Poll. Cont.
Fing. Auth. Poll. Cont. Rev.:
Bonds (Philadelphia Elec.
Co.) Series 1993 A:
3% tender 8/12/99, LOC 2,800,000 2,800,000
Toronto Dominion Bank, CP
mode (b)
3.05% tender 9/8/99, LOC 4,000,000 4,000,000
Toronto Dominion Bank, CP
mode (b)
Participating VRDN Series PA 900,000 900,000
357, 3.27% (a)(c)
Secaucus Gen. Oblig. BAN 3.4% 3,986,000 3,994,291
6/1/00
South Plainfield Gen. Oblig. 4,400,000 4,402,049
BAN 4% 7/20/99
Union County Gen. Oblig. BAN 2,900,000 2,900,096
3.63% 7/14/99
Union County Util. Auth. 6,260,000 6,260,000
Solid Waste Facilities Lease
Rev. Participating VRDN
Series FR/RI 38, 3.35%
(a)(b)(c)
Vernon Township School 8,900,000 8,916,697
District BAN 3.5% 12/3/99
Wall Township Gen. Oblig. BAN 3,000,000 3,000,546
Series B, 4% 6/24/99
Warren County Gen. Oblig. BAN 2,800,000 2,800,907
3.17% 4/7/00
Washington Township Gen. 5,300,000 5,304,962
Oblig. BAN 3.25% 11/15/99
West Milford Township Gen. 3,976,000 3,987,604
Oblig. BAN 3.5% 1/21/00
Woodbridge Township Gen. 11,068,950 11,075,517
Oblig. BAN 4% 7/30/99
492,757,206
NEW YORK & NEW JERSEY - 20.8%
Port Auth. New York & New
Jersey:
Participating VRDN:
Series 6, 3.37% (Liquidity 18,000,000 18,000,000
Facility Societe Generale,
France) (a)(b)(c)
Series FR/RI 16, 3.3% 5,200,000 5,200,000
(Liquidity Facility Bank of
New York NA) (a)(b)(c)
Series SG 117, 3.37% 6,400,000 6,400,000
(Liquidity Facility Societe
Generale, France) (a)(b)(c)
(Versatile Structure):
Series 1R, 3.45%, VRDN (a)(b) 12,100,000 12,100,000
Series 3, 3.35%, VRDN (a) 5,850,000 5,850,000
Series 5, 3.35%, VRDN (a) 16,150,000 16,150,000
MUNICIPAL SECURITIES -
CONTINUED
PRINCIPAL AMOUNT VALUE (NOTE 1)
NEW YORK & NEW JERSEY -
CONTINUED
Port Auth. New York & New
Jersey: - continued
3.25% (BPA Morgan Guaranty $ 2,300,000 $ 2,300,000
Trust Co., NY), VRDN (a)
Port Auth. New York & New
Jersey Gen. Oblig.:
Participating VRDN:
Series GS 52, 3.37% 4,600,000 4,600,000
(Liquidity Facility Societe
Generale, France) (a)(b)(c)
Series PA 518, 3.32% 3,405,000 3,405,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(c)
Series PA 67, 3.32% 4,080,000 4,080,000
(Liquidity Facility Merrill
Lynch & Co., Inc.) (a)(c)
Series PT 232, 3.37% 4,200,000 4,200,000
(Liquidity Facility
Commerzbank AG) (a)(b)(c)
Series RI 3, 3.3% (Liquidity 4,000,000 4,000,000
Facility Bank of New York
NA) (a)(b)(c)
Series 1991, 3.41%, VRDN 8,800,000 8,800,000
(a)(b)(d)
Series 1992, 3.225%, VRDN 6,800,000 6,800,000
(a)(d)
Series 1995, 3.225%, VRDN 9,400,000 9,400,000
(a)(b)(d)
Series 1996 2, 3.3%, VRDN 3,500,000 3,500,000
(a)(b)
Series 1997 1, 3.225%, VRDN 8,900,000 8,900,000
(a)(d)
Series 1997 1A, 3.2%, VRDN (a) 2,800,000 2,800,000
Series A:
3% 8/9/99, CP (b) 5,835,000 5,835,000
3.1% 9/14/99, CP (b) 2,600,000 2,600,000
134,920,000
TEXAS - 1.6%
Harris County Gen. Oblig. 10,400,000 10,400,000
3.25% (BPA Morgan Guaranty
Trust Co., NY), VRDN (a)
VIRGINIA - 0.8%
Dinwiddie County Ind. Dev. 5,000,000 5,000,000
Auth. Rev. (Chaparral Steel
Proj.) Series 1998 A, 3.5%,
LOC NationsBank NA, VRDN
(a)(b)
TOTAL INVESTMENT IN $ 649,827,206
SECURITIES - 100%
Total Cost for Income Tax Purposes $ 649,827,206
</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) Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
SECURITY ACQUISITION DATE COST
Port Auth. New York & New 6/18/91 $ 8,800,000
Jersey Gen. Oblig.VRDN:
Series 1991, 3.41%,
Series 1992, 3.225% 2/14/92 $ 6,800,000
Series 1995, 3.225% 9/15/95 $ 9,400,000
Series 1997 1, 3.225% 9/15/97 $ 8,900,000
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A
issues) amounted to $33,900,000 or 5.2% of net assets.
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.
FIDELITY NEW JERSEY MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 649,827,206
value - See accompanying
schedule
Receivable for investments 12,078,932
sold
Receivable for fund shares 7,416,420
sold
Interest receivable 5,394,600
Prepaid expenses 15,434
TOTAL ASSETS 674,732,592
LIABILITIES
Payable to custodian bank $ 55,691
Payable for investments 9,209,319
purchased
Payable for fund shares 7,255,738
redeemed
Distributions payable 24,319
Accrued management fee 205,223
Other payables and accrued 141,970
expenses
TOTAL LIABILITIES 16,892,260
NET ASSETS $ 657,840,332
Net Assets consist of:
Paid in capital $ 657,847,346
Accumulated undistributed net (7,014)
realized gain (loss) on
investments
NET ASSETS, for 657,847,409 $ 657,840,332
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($657,840,332
(divided by) 657,847,409
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
1999 (UNAUDITED)
INTEREST INCOME $ 10,098,380
EXPENSES
Management fee $ 1,219,479
Transfer agent fees 502,157
Accounting fees and expenses 50,241
Non-interested trustees' 1,070
compensation
Custodian fees and expenses 18,274
Registration fees 37,287
Audit 11,758
Legal 18,680
Miscellaneous 11,025
Total expenses before 1,869,971
reductions
Expense reductions (5,917) 1,864,054
NET INTEREST INCOME 8,234,326
NET REALIZED GAIN (LOSS) ON 33,788
INVESTMENTS
NET INCREASE (DECREASE) IN $ 8,268,114
NET ASSETS RESULTING FROM
OPERATIONS
OTHER INFORMATION
Expense reductions
Custodian credits $ 1,254
Transfer agent credits 4,663
$ 5,917
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEAR ENDED NOVEMBER 30,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 8,234,326 $ 15,601,509
Net realized gain (loss) 33,788 14,434
NET INCREASE (DECREASE) IN 8,268,114 15,615,943
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (8,234,326) (15,601,509)
from net interest income
Share transactions at net 1,240,954,752 1,801,008,658
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 8,061,516 15,168,608
distributions from net
interest income
Cost of shares redeemed (1,181,699,838) (1,713,362,802)
NET INCREASE (DECREASE) IN 67,316,430 102,814,464
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) 67,350,218 102,828,898
IN NET ASSETS
NET ASSETS
Beginning of period 590,490,114 487,661,216
End of period $ 657,840,332 $ 590,490,114
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED MAY 31, 1999 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .013 .029 .030 .029 .033
Operations Net interest
income
Less Distributions
From net interest income (.013) (.029) (.030) (.029) (.033)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 1.29% 2.93% 3.03% 2.93% 3.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 657,840 $ 590,490 $ 487,661 $ 423,224 $ 434,709
(000 omitted)
Ratio of expenses to average .59% A .60% .61% .63% .62%
net assets
Ratio of expenses to average .58% A, D .59% D .61% .61%D .62%
net assets after expense
reductions
Ratio of net interest income 2.58% A 2.90% 2.98% 2.89% 3.28%
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .022
Operations Net interest
income
Less Distributions
From net interest income (.022)
Net asset value, end of $ 1.000
period
TOTAL RETURN B, C 2.19%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 399,548
(000 omitted)
Ratio of expenses to average .62%
net assets
Ratio of expenses to average .62%
net assets after expense
reductions
Ratio of net interest income 2.17%
to average net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1999 (Unaudited)
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. Each fund may be affected by
economic and political developments in the state of New Jersey. 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 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
basis 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.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission (the SEC), the funds may invest
in the Municipal Central Cash Fund (the Cash Fund) managed by Fidelity
Investments Money Management, Inc., (FIMM) 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.
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
Each fund may receive compensation for interest forgone in the
purchase of a when-issued security. With respect to purchase
commitments, each fund identifies securities as segregated in its
records with a value at least equal to the amount of the commitment.
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 $31,348,391 and $11,843,513, respectively.
The market value of futures contracts opened and closed during the
period amounted to $14,425,920 and $11,953,616, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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 annualized rate of .38% of
average net assets.
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 $2,217 for the
period.
SUB-ADVISER FEE. As the money market and the income (effective January
1, 1999) funds' investment sub-adviser, FIMM, 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
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
annualized rate of .16% of average net assets for Fidelity New Jersey
Municipal Money Market Fund.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the money market funds, along with other money market funds
advised by FMR or its affiliates, have entered into insurance
agreements with FIDFUNDS Mutual Limited (FIDFUNDS), an affiliated
mutual insurance company, effective January 1, 1999. FIDFUNDS provides
limited coverage for certain loss events including issuer default as
to payment of principal or interest and bankruptcy or insolvency of a
credit enhancement provider. The insurance does not cover losses
resulting from changes in
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MONEY MARKET INSURANCE -
CONTINUED
interest rates, ratings downgrades or other market conditions. Each
fund may be subject to a special assessment of up to approximately 2.5
times the fund's annual gross premium if covered losses exceed certain
levels. During the period, Fidelity New Jersey Municipal Money Market
Fund paid premiums of $26,459 to FIDFUNDS, which are being amortized
over one year. FMR has borne the cost of Spartan New Jersey Municipal
Money Market Fund's premium payable to FIDFUNDS.
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.
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 75039-5517
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 75039-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
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
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
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
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc. (FIMM),
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 -
INCOME FUND
Scott A. Orr, Vice President -
MONEY MARKET FUNDS
Eric D. Roiter, Secretary
Matthew N. Karstetter, Deputy Treasurer
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
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
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)(automated graphic)
1-800-544-5555
(automated graphic) AUTOMATED LINE FOR QUICKEST SERVICE
NJN-SANN-0799 80194
1.704871.101
(Fidelity Logo Graphic)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
