FIDELITY
(Registered trademark)
OHIO
MUNICIPAL
PORTFOLIOS
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
CHECK PAGE NUMBERS !!!
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PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
FIDELITY OHIO
MUNICIPAL HIGH YIELD PORTFOLIO
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 last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 24 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
FIDELITY OHIO
MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE 28 How the fund has done over time.
FUND TALK 30 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 32 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 33 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 39 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 43 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 46 The auditor's opinion.
ACCOUNTANTS
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THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments-either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
FIDELITY OHIO MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value). You can also look at the fund's income. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Ohio Municipal High Yield 12.56% 61.16% 111.35%
Lehman Brothers Municipal Bond Index 12.29% 62.86% n/a
Average Ohio Tax-Exempt
Municipal Bond Fund 12.25% 58.50% n/a
Consumer Price Index 2.75% 21.00% 33.76%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or since the fund started on November 15,
1985. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the performance of the Lehman Brothers Municipal Bond index - a
broad gauge of the municipal bond market. To measure how the fund stacked
up against its peers, you can look at the average Ohio municipal bond fund,
which reflects the performance of 37 Ohio tax-exempt municipal bond funds
tracked by Lipper Analytical Services. Both benchmarks include reinvested
dividends and capital gains, if any. Comparing the fund's performance to
the consumer price index helps show how your fund did compared to
inflation. (The periods covered by the CPI numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Ohio Municipal High Yield 12.56% 10.02% 9.64%
Lehman Brothers Municipal Bond Index 12.29% 10.25% n/a
Average Ohio Tax-Exempt
Municipal Bond Fund 12.25% 9.64% n/a
Consumer Price Index 2.75% 3.89% 3.66%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Ohio Tax Free (088) Lehman Muni Bond Index
11/30/85 10000.00 10000.00
12/31/85 10222.80 10087.90
01/31/86 10749.09 10682.08
02/28/86 11073.37 11105.62
03/31/86 11161.00 11109.18
04/30/86 11072.97 11117.62
05/31/86 10944.21 10936.62
06/30/86 11012.12 11040.96
07/31/86 11068.97 11107.98
08/31/86 11526.58 11605.28
09/30/86 11519.26 11634.41
10/31/86 11765.60 11835.34
11/30/86 11978.65 12069.80
12/31/86 11905.20 12036.48
01/31/87 12310.19 12398.90
02/28/87 12431.90 12459.90
03/31/87 12355.81 12327.83
04/30/87 11391.80 11709.22
05/31/87 11282.79 11651.14
06/30/87 11527.96 11993.22
07/31/87 11696.64 12115.55
08/31/87 11708.49 12142.81
09/30/87 11096.64 11695.10
10/31/87 11110.44 11736.50
11/30/87 11411.72 12042.94
12/31/87 11622.03 12217.69
01/31/88 12158.17 12652.88
02/29/88 12320.35 12786.62
03/31/88 12000.79 12637.66
04/30/88 12059.93 12733.70
05/31/88 12143.87 12696.90
06/30/88 12371.68 12882.66
07/31/88 12480.80 12966.65
08/31/88 12506.32 12978.07
09/30/88 12738.78 13212.97
10/31/88 13009.43 13446.18
11/30/88 12911.14 13323.01
12/31/88 13124.55 13459.30
01/31/89 13313.64 13737.64
02/28/89 13201.16 13580.90
03/31/89 13202.43 13548.44
04/30/89 13559.05 13870.08
05/31/89 13853.97 14158.16
06/30/89 14034.67 14350.43
07/31/89 14150.68 14545.74
08/31/89 14004.90 14403.33
09/30/89 13938.64 14360.12
10/31/89 14118.49 14535.32
11/30/89 14322.17 14789.69
12/31/89 14435.12 14910.96
01/31/90 14299.67 14840.88
02/28/90 14461.42 14972.96
03/31/90 14477.87 14977.46
04/30/90 14257.79 14869.62
05/31/90 14627.17 15193.78
06/30/90 14778.15 15327.48
07/31/90 15000.32 15552.79
08/31/90 14764.39 15327.28
09/30/90 14877.17 15336.48
10/31/90 15089.30 15614.07
11/30/90 15443.68 15927.91
12/31/90 15517.64 15997.99
01/31/91 15689.71 16212.36
02/28/91 15788.58 16353.41
03/31/91 15817.52 16359.95
04/30/91 16064.27 16577.54
05/31/91 16195.73 16725.08
06/30/91 16137.44 16708.36
07/31/91 16359.71 16912.20
08/31/91 16523.33 17135.44
09/30/91 16718.81 17358.20
10/31/91 16869.42 17514.42
11/30/91 16898.75 17563.46
12/31/91 17293.79 17941.08
01/31/92 17324.53 17982.34
02/29/92 17335.75 17987.74
03/31/92 17322.95 17994.93
04/30/92 17462.35 18155.09
05/31/92 17698.81 18369.32
06/30/92 18011.01 18677.92
07/31/92 18531.14 19238.26
08/31/92 18324.40 19049.72
09/30/92 18433.24 19173.55
10/31/92 18097.76 18985.65
11/30/92 18579.99 19325.49
12/31/92 18792.03 19522.61
01/31/93 19037.57 19749.07
02/28/93 19715.74 20463.99
03/31/93 19485.45 20247.07
04/30/93 19664.22 20451.57
05/31/93 19763.22 20566.09
06/30/93 20091.93 20909.55
07/31/93 20121.74 20936.73
08/31/93 20590.13 21372.21
09/30/93 20836.47 21615.86
10/31/93 20850.17 21656.93
11/30/93 20672.87 21466.35
12/31/93 21152.11 21919.29
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity Ohio
Municipal High Yield Portfolio on November 30, 1985, shortly after the fund
started. As the chart shows, by December 31, 1993, the value of your
investment would have grown to $21,152 - a 111.52% increase on your initial
investment. For comparison, look at how the Lehman Brothers Municipal Bond
index did over the same period. With dividends reinvested, the same $10,000
would have grown to $21,919 - a 119.19% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, 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)
INCOME
YEARS ENDED DECEMBER 31, 1993 1992 1991 1990 1989
Income return 6.19% 6.63% 7.02% 7.04% 7.23%
Capital gain returns 2.30% 0% 0% 0% 0%
Change in share price 4.07% 2.03% 4.43% .46% 2.76%
Total return 12.56% 8.66% 11.45% 7.50% 9.99%
Income returns, capital gains returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 34.25(cents) 69.29(cents)
Annualized dividend rate n/a 5.60% 5.79%
Annualized yield 4.96% n/a n/a
Tax-equivalent yield 8.38% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $12.13 over
the past six months and $11.97 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 40.80%
combined federal and state tax bracket.
FIDELITY OHIO MUNICIPAL HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Generally, interest rates fell
during the 12 months ended
December 31, 1993. As a result,
bond prices rose and most
fixed-income investors -
including those in tax-free bonds
- - enjoyed attractive returns.
The period began with worries of
rising interest rates. The
economic recovery was finally
taking hold, and the spending
plans of the president-elect were
still unclear. But the bond market
signaled its approval as
President Clinton promised to
reduce the deficit and fight
inflation. The yield on the
benchmark 30-year Treasury
bond declined steadily and
reached an historic low of 5.79%
in mid-October. By year-end,
mild inflation fears, fueled by a
strengthening economy, had
pushed up the yield on the
30-year bond to 6.35%. Two
factors affected tax-free bonds
specifically: on the positive side,
higher federal taxes -
discussed all year and approved
in August - boosted demand.
At the same time, record new
issuance kept supplies high,
which somewhat dampened
prices. Overall during the period,
tax-free bonds performed well
compared to other fixed-income
investments. The Lehman
Brothers Municipal Bond Index
- - a broad measure of the
tax-free bond market - rose
12.29%. By comparison, the
Lehman Brothers Aggregate
Bond Index - which tracks
investment-grade taxable bonds
- - rose only 9.75%, due in part
to relatively poor performance
by mortgage backed securities.
An interview with Peter Allegrini,
Portfolio Manager of Fidelity
Ohio Tax-Free High Yield Portfolio
Q. PETER, HOW DID THE FUND DO?
A. For the 12 months ended December 31, 1993, it had a total return of
12.56%. That was ahead of the average Ohio tax-free bond fund, which
returned 12.25% over the same period, according to Lipper Analytical
Services.
Q. WHAT EXPLAINS THE DIFFERENCE?
A. The fund had a longer duration than other Ohio funds - meaning it was
more sensitive to interest rate declines. So as interest rates fell over
the past year, it beat funds with shorter durations. In the past, the
fund's duration was shorter than it is now because it still had a
significant investment in premium bonds. These trade to their shorter call
dates, rather than to their stated maturities. They also carry an interest
rate above the current rate for similar bonds; this helped generate the
fund's income. But as interest rates have come down this year, I've
steadily worked to lengthen the fund's duration to eight years on December
31. Over the next six months to a year, I'll probably keep it between eight
and 8 1/2 years because I think long-term rates could continue to stay low.
Q. HOW DID YOU LENGTHEN THE FUND'S DURATION?
A. Mainly by buying non-callable and zero coupon bonds. At the end of the
period the fund had about a 24% stake in non-callable bonds, which can't be
prematurely returned to their issuers. That also means they have a longer
duration because non-callables always trade to their maturity date, rather
than a shorter call date. When interest rates are falling and bond prices
are rising, non-callable bonds tend to do well. Zero coupon bonds - which
made up about 9.5% of the fund's investments at year end - behave in a
similar way.
Q. WHAT'S THE ATTRACTION TO BONDS WITH 15 TO 20 YEAR MATURITIES?
A. During the past year, the slope of the yield curve - or the difference
in yield between bonds with different maturities - was fairly flat. That
meant you weren't rewarded much for taking on the extra risk of buying a
bond with a 30-year maturity. For example, you could pick up about 95% of
the yield of a 30-year bond with a 15-year bond. I just didn't think that a
5% difference in yield justified the added price risk of a 30-year bond. At
the end of December, about 35.7% of the fund was concentrated in
intermediate bonds with maturities of 15 to 20 years.
Q. THE FUND'S SECOND LARGEST SECTOR - AT 20.9% OF INVESTMENTS - IS HEALTH
CARE. ARE YOU CONCERNED THAT THESE BONDS MIGHT BE AFFECTED BY HEALTH-CARE
REFORM?
A. Not really. Unlike other states, pressure to cut costs and be more
competitive isn't really a factor for Ohio hospitals. Ohio has a well-run
hospital system, and doesn't suffer from an excess supply of hospital beds
like other states do. I look for hospitals that are well managed and have
strong relationships with HMOs. Those hospitals are already accustomed to
providing services in a managed care environment and should fare the best
once health-care reform is enacted. Even so, I'll continue to monitor the
health care sector closely going forward.
Q. AFTER ENJOYING SUCH A STRONG YEAR IN 1993, CAN MUNICIPAL BONDS CONTINUE
TO POST SUCH IMPRESSIVE RETURNS?
A. Throughout the past year, municipal bond prices were artificially low,
in part because there was a record supply of bonds issued. But now, many of
the refinancings permitted by law have already taken place; and once those
refinancings taper off, I expect supply to be lower. On the demand side,
investors are just now beginning to calculate their 1993 tax bills. And I
think that once they see how much their taxes have risen, many will find
tax-free municipal bonds a more attractive investment.
Q. SO, ARE YOU OPTIMISTIC ABOUT MUNICIPAL BONDS FOR 1994?
A. I am because I expect interest rates to continue to stay low, despite
some recent jitters in the bond market. Most commodity prices and wages -
two early warning signals for higher inflation - have stabilized with no
real signs of heading up. As long as inflation stays under control, and
economic growth stays at a 2% to 3% level, interest rates and bond yields
could continue at current levels. Even so, it's probably realistic for
investors not to expect the strong returns than we've seen during the past
12 months.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Ohio state income tax
START DATE: November 15,
1985
SIZE: as of December 31,
1993, over $457 million
MANAGER: Peter Allegrini
since November 1985;
manager, Fidelity Advisor
High Income Municipal Fund,
and Fidelity Michigan
Tax-Free Fund, since
November 1985; Spartan
Connecticut Municipal High
Yield Portfolio, since October
1987; Fidelity Minnesota
Tax-Free Fund, November
1985 - September 1993;
Spartan Pennsylvania
Municipal High Yield Portfolio,
August 1986 - September
1993
(checkmark)
PETER ALLEGRINI'S OUTLOOK ON THE
OHIO ECONOMY:
"Since the recession, Ohio
has started to shed its "rust
belt" image and has built a
more diversified economy
based not only on
manufacturing, but on
retailing, banking, insurance
and other service sectors.
Even the state's
manufacturing base emerged
from the recession with higher
productivity. Retail sales have
been much stronger than the
national average, while
housing starts are in line with
the nation as a whole.
Employment growth has
slowed somewhat over the
past 12 months, but has kept
pace with the U.S. average."
(bullet) Although the fund invests
primarily in long-term,
investment grade (Baa or
above) bonds, up to one-third
of its assets may be in lower
quality bonds. At the end of
December, about 25% of the
fund's assets were in below
investment grade bonds.
These bonds provide a higher
income than higher-rated
bonds.
(bullet) General Obligation bonds
(Gos) - backed by the taxing
power of the issuer - are the
fund's largest industry
concentration. They're
attractive in part because an
abundant supply of Ohio GOs
were available and offered at
attractive prices.
FIDELITY OHIO MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF DECEMBER 31, 1993
% OF FUND'S INVESTMENT % OF FUND'S INVESTMENT
S S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 24 26
Health Care 21 21
Water & Sewer 13 16
Industrial Development 10 13
Lease Revenue 9 5
AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 18.1 19.2
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 8.0 7.5
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF DECEMBER 31, 1993
(MOODY'S RATINGS)
Row: 1, Col: 1, Value: 31.0
Row: 1, Col: 2, Value: 27.0
Row: 1, Col: 3, Value: 25.0
Row: 1, Col: 4, Value: 17.0
Aaa 31%
Aa, A 27%
Baa, Ba 25%
Non-rated 17%
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY OHIO TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENTS/DECEMBER 31, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 97.2%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - 87.8%
Akron Bath Copley Township Hosp. Dist. Rev. Rfdg.
(Children's Hosp. Med. Ctr.) 5% 11/15/15,
(AMBAC Insured) Aaa $ 4,855,000 $ 4,679,006 009730HN
Akron Metropolitan Hsg. Corp. 1st Lien Rev. Section 8:
(Ellet): 999948RN
7.50% 1/1/14 - 160,000 170,400 999948RN
7.50% 1/1/15 - 170,000 181,475 999948RP
7.50% 1/1/16 - 180,000 192,375 999948RQ
7.50% 1/1/17 - 195,000 208,650 999948RR
7.50% 1/1/18 - 200,000 214,250 999948RS
(Hillwood Village) 010062BL
7.40% 1/1/11 - 130,000 136,500 999948RT
7.40% 1/1/12 - 145,000 152,431 999948RW
7.40% 1/1/13 - 150,000 158,063 999948RX
7.50% 1/1/13 - 55,000 58,506 010062BL
Akron Parking Facs. Ltd. Tax: 0100326N
8.75% 11/1/03 A 160,000 210,200 0100326N
8.75% 11/1/04 A 160,000 212,400 0100326Q
8.75% 11/1/05 A 160,000 214,400 0100326S
Akron Str. Impt. Ltd. Tax Series 1985-1: 0100326P
8.75% 11/1/03 A 200,000 262,750 0100326P
8.75% 11/1/04 A 200,000 265,500 0100326R
8.75% 11/1/05 A 200,000 268,000 0100326T
Alliance Wtrwks. Rev. (Cap. Appreciation) 0%
10/15/06, (FGIC Insured) Aaa 765,000 402,581 018753DG
Barberton Hosp. Facs. Rev. (Barberton Citizens
Hosp. Co. Proj.) 7.25% 1/1/12 A 3,000,000 3,337,500 067207AN
Bedford Hosp. Impt. Rev. Rfdg. (Bedford
Commty. Hosp.) Series 1990, 8.50%
5/15/09 - 895,000 995,687 076372AS
Bedford Wtr. & Swr. Sys. Mtg. Rev.
(AMBAC Insured): 076381BW
7.125% 7/1/13 Aaa 280,000 323,750 076381BW
7.125% 7/1/14 Aaa 300,000 346,875 076381BX
Berea Gen. Oblig. Ltd. Tax Rfdg.: 083581MN
0% 12/1/04 Aa 535,000 310,969 083581MN
5.125% 12/1/13 Aa 1,215,000 1,213,481 083581MV
Berea Wtrwks. Rfdg. 0% 12/1/06 Aa 510,000 260,100 083581MT
Berlin & Milan Local School Dist. 7.45%
12/1/11 A 675,000 798,187 085059BH
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Bexley City School Dist.: 088599CJ
0% 12/1/06 Aa $ 440,000 $ 230,450 088599CJ
0% 12/1/07 Aa 540,000 265,275 088599CK
0% 12/1/08 Aa 540,000 250,425 088599CL
Blue Ash Ind. Dev. Rev. Rfdg. (1st. Mtg.)
(Kmart Corp.) Series A, 6.75% 11/1/06 A 515,000 581,306 095245CV
Brunswick Gen. Oblig. Unltd. Tax 7.35%
12/1/10 A 1,000,000 1,143,750 117331KJ
Buckeye Local School Dist. (AMBAC Insured): 118205CN
Rfdg. (Jefferson County) 0% 12/1/07 Aaa 760,000 367,650 118205CQ
(Jefferson County) (Cap. Appreciation)
0% 12/1/06 Aaa 375,000 192,656 118205CN
Butler County Hosp. Facs. Rev. 7.50% 1/1/10 Baa1 1,500,000 1,659,375
123550DP
Cambridge Hosp. Impt. Rev. Rfdg. (Guernsey
Mem. Hosp.) 8% 12/1/11 BBB 1,500,000 1,696,875 132472BJ
Canal Winchester Local School Dist. Unltd. Tax
7.10% 12/1/13, (MBIA Insured) (Pre-Refunded
to 12/01/01 @102) (e) Aaa 1,400,000 1,674,750 137087DN
Canton Gen. Oblig. Ltd. Tax 7.875% 12/1/08
(Pre-Refunded to 12/1/98 @ 103) (e) Baa 1,250,000 1,503,125 138429EJ
Celina Rfdg. Str. Sidewalk & Swr. Impt. Ltd. Tax
7.75% 12/1/08 A1 200,000 226,500 151051AL
Centerville Ind. Dev. Rev. (Kroger Co. Proj.)
8.60% 1/1/94 - 1,480,000 1,480,000 152236CP
Centerville Recreational Facs. 5.85% 12/1/20 A1 1,500,000 1,558,125
152236CP
Chillicothe Wtr. Sys. Rev. Mtg. 7.20% 12/1/14,
(MBIA Insured) Aaa 1,000,000 1,185,000 169214BA
Cincinnati Univ. Gen. Receipts Series II,
7.10% 6/1/10 Aaa 1,000,000 1,162,500 914118JL
Clark County Hosp. Impt. Rev. Rfdg. (Commty.
Hosp.) Series A, 9.375% 4/1/08 A 800,000 889,000 181075CA
Clermont County Swr. Sys. Rev. 7.10% 12/1/21,
(AMBAC Insured) Aaa 1,500,000 1,794,375 185716HK
Cleveland Arpt. Sys. Rev. Series A, 7.25%
1/1/20, (MBIA Insured) Aaa 800,000 914,000 186352BR
Cleveland Gen. Oblig. Rev. Rfdg. 5.30% 9/1/07,
(AMBAC Insured) Aaa 2,000,000 2,092,500 186343JZ
Cleveland Pub. Pwr. Sys. Impt. Rev. (1st Mtg.)
Series 1987, 8.375% 8/1/17, (Pre-Refunded
to 8/1/97 @ 102) (e) Aaa 2,500,000 2,931,250 186398AP
Cleveland Wtrwks. Rev. 1st Mtg. Rfdg.: 186432NY
Series D, 5% 1/1/15, (AMBAC Insured) Aaa 1,000,000 972,500 186432NY
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Cleveland Wtrwks. Rev. 1st Mtg. Rfdg.: 186432NY - continued
Series E, 7.875% 1/1/16 (Pre-Refunded
to 1/1/97 @ 102) (e) Aaa $ 1,000,000 $ 1,136,250 186432PW
Series G (MBIA Insured): 186432SE
5.50% 1/1/08 Aaa 3,700,000 3,866,500 186432SE
5.50% 1/1/13 Aaa 4,500,000 4,708,125 186432SF
5.50% 1/1/21 Aaa 24,725,000 25,714,000 186432SG
Columbus Gen. Oblig.: 199489NS
Ltd. Tax 9.50% 4/15/04 Aa1 500,000 692,500 199489NS
Unltd. Tax Series 1, 5.25% 9/15/18 Aa1 2,000,000 2,002,500 1994893H
Columbus Swr. Sys. Impt. Ltd. Tax
9.375% 4/15/07 Aa1 590,000 836,325 199489NZ
Cuyahoga County Cap. Appreciation Unltd.
Tax Rfdg. Series A, (MBIA Insured):
0% 10/1/08 Aaa 4,000,000 1,840,000 2322373L
0% 10/1/09 Aaa 4,200,000 1,821,750 2322373M
0% 10/1/10 Aaa 5,000,000 2,037,500 2322373N
0% 10/1/11 Aaa 2,400,000 927,000 2322373P
0% 1/1/12 Aaa 1,505,000 551,206 2322373Q
0% 1/1/13 Aaa 4,000,000 1,385,000 2322373R
Cuyahoga County Gen. Oblig. Jail Facs.
Unltd. Tax 7% 10/1/13 - 1,250,000 1,482,812 232237U8
Cuyahoga County Health Care Facs. Rev.
(Judson Retirement Commty.) 8.875%
11/15/19 - 2,500,000 2,800,000 232264AL
Cuyahoga County Hosp. Rev.:
(Cleveland Clinic Foundation):
Rfdg.Series A, 8% 12/1/08 Aa 1,000,000 1,130,000 232265PE
Series A, 8% 12/1/15 Aa 2,250,000 2,553,750 232265PF
(Deaconess Hosp.) 9.25% 10/1/09,
(FGIC Insured) Aaa 250,000 278,750 232265JE
(Fairview Gen. Hosp.) 7.375% 8/1/19 A1 1,250,000 1,387,500 232265TV
Cuyahoga County Ltd. Tax: 2322372C
Series B, 5.25% 10/1/12 Aa 7,000,000 7,096,250 2322372C
5.60% 5/15/13 Aa 2,685,000 2,822,606 2322374G
5.65% 5/15/18 Aa 2,295,000 2,444,175 2322374H
Defiance County Econ. Dev. Rev.
(Kroger Co. Proj.) 8% 10/15/15 - 2,325,000 2,635,969 244652AA
Defiance Gen. Oblig. 6.95% 12/1/11 A 340,000 380,375 244703KB
Defiance Spl. Assessments 7% 12/1/11 A 365,000 414,731 244703KN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Dublin City School Dist.: 26371GAW
Rfdg. (Cap. Appreciation) 0% 12/1/07,
(FGIC Insured) Aaa $ 500,000 $ 240,625 26371GAW
Unltd. Tax Rfdg. (Cap. Appreciation)
0% 12/1/04, (AMBAC Insured) Aaa 1,930,000 1,121,812 26371GCB
East Liverpool Hosp. Rev. (East Liverpool City
Hosp.) Series A, 8.125% 10/1/11 Baa 2,430,000 2,782,350 273505BH
Erie County Gen. Oblig. Rfdg. 5% 9/1/16,
(MBIA Insured) Aaa 1,000,000 970,000 295119XL
Euclid County School Dist. Series 1991
7.10% 12/1/11 A 1,500,000 1,725,000 298047CA
Fairfield City School Dist. Unltd. Tax 7.75%
12/1/09, (AMBAC Insured) Aaa 750,000 873,750 304657GR
Fairfield Econ. Dev. Rev. Rfdg. (Beverly Enterprises
Proj.) 8.50% 1/1/03 - 1,060,000 1,158,050 304661AX
Forest Park Ind. Dev. 1st Mtg. Rev. Rfdg.
(Kmart Corp.) Series A, 6.25% 4/1/08 A 700,000 761,250 346193AD
Franklin City School Dist. Unltd. Tax
(Warren County Impt.) 7% 12/1/14 A 1,250,000 1,395,312 354172FF
Franklin County Hosp. Rev. Rfdg. & Impt.
(Riverside United Methodist Hosp.) 7.25%
5/15/20, (MBIA Insured) Aaa 1,750,000 2,008,125 353186TM
Franklin County Rev. (OCLC Online Computer
Library Ctr.) : 353202AL
7.20% 7/15/06 - 1,000,000 1,118,750 353202AX
6% 4/15/09 - 1,500,000 1,531,875 353202BM
9.75% 7/15/09 - 5,000,000 5,400,000 353202AL
6% 4/15/13 - 3,500,000 3,561,250 353202BN
Gahanna Gen. Oblig. Series A, 7% 6/1/12 A1 1,000,000 1,137,500 362676EJ
Gahanna-Jefferson City School Dist.
Series C, 7.30% 12/1/14 A1 1,000,000 1,196,250 362668CF
Gateway Econ. Dev. Corp. (Greater
Cleveland Stadiums) Series 1990,
6.50% 9/15/14 - 10,000,000 9,900,000 367599AM
Granville Village School Dist. Rfdg.
(Cap. Appreciation) (AMBAC Insured):
0% 12/1/06 Aaa 625,000 325,000 388568CV
0% 12/1/07 Aaa 665,000 324,187 388568CW
0% 12/1/08 Aaa 650,000 296,562 388568CX
0% 12/1/09 Aaa 645,000 274,931 388568CY
Green County 1st Mtg. Rev. (Fairview Extended
Care) Series A, 10.125% 1/1/11 - 6,070,000 6,730,112 394645AL
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Green County Swr. Sys. Rev. (Cap. Appreciation)
0% 12/1/09, (AMBAC Insured) Aaa $ 775,000 $ 332,281 39465GAR
Hamilton County Health Sys. Rev.: 40727JBN
Rfdg. (Providence Hosp.-Franciscan Sisters
Poor Health Sys.) 6.875% 7/1/15 Baa 5,000,000 5,337,500 40727JBN
(Children's Hosp. Med. Ctr.) Series D,
5% 5/15/13, (FGIC Insured) Aaa 1,500,000 1,466,250 407272B7
(St. Francis-St. George Franciscan)
9.375% 7/1/15 Baa 1,500,000 1,620,000 40727JBD
Hamilton County Swr. Sys. Rev. (FGIC Insured): 407288FY
Rfdg. & Impt. Metro. Swr. Dist. Series A,
5.45% 12/1/09 Aaa 1,000,000 1,045,000 407288FY
Series A, 5.40% 12/1/08 Aaa 3,715,000 3,845,025 407288FV
Hamilton Gas Sys. Rev. Series A (MBIA Insured): 407796AR
5% 10/15/18 Aaa 1,600,000 1,572,000 407796AR
4.75% 10/15/23 Aaa 1,000,000 927,500 407796AS
Hilliard Ind. Dev. Rev. Rfdg. (Kroger Co.) 8.10%
7/1/12 Ba3 3,600,000 4,108,500 431618AF
Hudson Local School Dist. Series A, 7.10%
12/15/13 A1 2,000,000 2,370,000 444096FB
Huron County Gen. Oblig. 7% 12/1/09 A 1,000,000 1,110,000 447537CL
Kettering Gen. Oblig. Unltd. Tax 7.25%
12/1/08 Aa 3,000,000 3,588,750 492674HU
Lake County Ind. Dev. Rev. Rfdg. 1st Mtg.
(Kmart Corp.) Series A, 6.40% 8/1/06 A 1,000,000 1,100,000 509441BC
Lakota Local School Dist.: 512804KN
Rfdg. (Cap. Appreciation)
0% 12/1/00 A1 625,000 460,156 512804KN
0% 12/1/01 A1 590,000 412,262 512804KP
0% 12/1/02 A1 555,000 367,687 512804KQ
0% 12/1/03 A1 260,000 162,825 512804KR
Unltd. Tax 512804GR
Rfdg. (Cap. Appreciation) 0% 12/1/99 A1 445,000 346,544 512804KM
7.90% 12/1/11
(Pre-Refunded to 12/1/98 @ 100) (e) A1 1,000,000 1,176,250 512804GR
Logan Hocking Local School Dist. Rfdg. Series B,
0% 12/1/08, (AMBAC Insured) Aaa 1,065,000 481,913 541008BH
0% 12/1/12, (AMBAC Insured) Aaa 840,000 299,250 541008BM
Lorain County Rev. (1st Mtg. Kendal at Oberlin
Proj.) Series A, 8.625% 2/1/22 - 4,250,000 4,467,812 543613AH
Lorain Gen. Oblig. Ltd. Tax 7.875% 12/1/09 Baa 1,000,000 1,130,000
543689WK
Lorain Swr. Sys. Mtg. Rev. Rfdg. 8.75% 4/1/11 BBB- 2,815,000 3,226,694
543761AN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Lowellville San. Swr. Sys. Rev. (Browning-Ferris
Industries, Inc.) 7.25% 6/1/06 (b) A+ $ 1,600,000 $ 1,710,000 547753AA
Lucas County Convention Ctr. Site Acquisition
Bonds Ltd. Tax:
6.50% 12/1/09 Baa1 340,000 394,400 549305G8
6.50% 12/1/10 Baa1 340,000 396,525 549305G9
6.50% 12/1/11 Baa1 340,000 396,100 549305H2
6.50% 12/1/12 Baa1 340,000 398,225 549305H3
Lucas County Hosp. Rev. Rfdg.:
(Riverside Hosp. Proj.) 7.625% 6/1/15 Baa1 7,485,000 7,934,100 549310JA
(Toledo Hosp.) 5% 11/15/13, (MBIA Insured) Aaa 1,750,000 1,699,687
549310NY
(St. Vincent Med. Ctr.) Series 1993, 5.25%
8/15/14, (MBIA Insured) (d) Aaa 5,000,000 5,112,500 549310QB
Lucas County Ind. Dev. Rev. Rfdg. (Kroger Co.)
8.50% 7/1/11 Ba3 3,600,000 4,153,500 549315GB
Mahoning County Hosp. Facs. Rev. (YHA, Inc. Proj.)
Series A, 7% 10/15/14, (MBIA Insured) Aaa 1,000,000 1,153,750 560060DK
Mahoning County San. Swr. Sys. Rev. 7.50%
2/1/19, (BIG Insured) Aaa 1,000,000 1,161,250 560069AR
Mahoning Valley San. Dist.:
7.85% 12/15/12 - 1,200,000 1,335,000 560126AV
7.85% 12/15/13 - 1,275,000 1,418,437 560126AW
Marion County Health Care Facs. Rev. Rfdg. &
Impt. (United Church Homes, Inc. Proj.)
6.30% 11/15/15 BBB- 1,800,000 1,779,750 569120AR
Marysville Exempt Village School Rfdg.
(Cap. Appreciation):
0% 12/1/05, (AMBAC Insured) Aaa 795,000 434,269 574480DP
0% 12/1/06, (AMBAC Insured) Aaa 750,000 385,312 574480DQ
0% 12/1/07, (AMBAC Insured) Aaa 690,000 332,062 574480DR
Marysville Swr. Sys. Ltd. Tax 7.15% 12/1/11 A 500,000 578,750 574463CF
Marysville Wtr. Sys. Mtg. Rev. 7.05% 12/1/21,
(MBIA Insured) Aaa 1,000,000 1,148,750 574486AQ
Mentor Exempt Village School Dist. Rfdg.
(Cap. Appreciation) (MBIA Insured):
0% 12/1/00 Aaa 755,000 550,206 587227LK
0% 12/1/01 Aaa 795,000 546,563 587227LL
0% 12/1/02 Aaa 845,000 549,250 587227LM
0% 12/1/03 Aaa 840,000 515,550 587227LN
Mentor Gen. Oblig. Ltd. Tax Series 1991,
7.15% 12/1/11 A 500,000 569,375 587210XE
Miami County Hosp. Facs. Rev. (Upper Valley Med.
Ctr.) Project B, 8.25% 5/1/04, (BIG Insured) Aaa 500,000 571,250
593328CQ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Miami Univ. Gen. Receipts (Cap. Appreciation)
0% 12/1/07(FGIC Insured) Aaa $ 500,000 $ 245,000 593791AP
Miamisburg Gen. Oblig. 7.25% 12/1/17
(AMBAC Insured) Aaa 500,000 598,125 593864FT
Middleburg Heights Gen. Oblig. 7.20%
12/1/11 Aa 500,000 588,125 596119EP
Middleburg Heights Hosp. Impt. Rev.
(Southwest Gen. Hosp.) 7.20% 8/15/19 A 2,000,000 2,217,500 596126AL
Montgomery County Swr. Impt. Ltd. Tax
Issue 1, 7.10% 9/1/10 Aa 1,000,000 1,177,500 613477R3
Mount Vernon Hosp. Rev. (Knox Commty. Hosp.)
7.875% 6/1/12 - 7,000,000 7,498,750 623646AM
Muskingum County Rev. (Franciscan Health
Advisory Svcs.) 7.50% 3/1/12 BBB 2,000,000 2,110,000 628082AL
Newark Wtr. (Cap. Appreciation) 0% 12/1/07,
(AMBAC Insured) Aaa 455,000 218,969 650451HL
North Olmsted Gen. Oblig. Unltd. Tax 7.50%
12/1/10 A1 670,000 787,250 661292ML
Ohio Air Quality Dev. Auth. Rev. Rfdg.
(Ohio Pwr. Co. Proj.) Series B, 7.40%
8/1/09 Baa1 3,250,000 3,644,063 677525JK
Ohio Bldg. Auth.:
(Administration Bldg. Fund Proj.) Series A:
5.60% 10/1/06 A1 2,410,000 2,539,538 6775535R
5.60% 10/1/07 A1 3,330,000 3,492,338 6775535S
(Correctional Facs.) Series A, 7.35% 8/1/04 A1 2,000,000 2,302,500
677553XH
(Ohio Ctr. Arts) Series A:
5.25% 10/1/05 A1 1,900,000 1,959,375 67755ABB
5.35% 10/1/06 A1 3,060,000 3,163,275 67755ABD
5.45% 10/1/07 A1 2,000,000 2,070,000 67755ABF
(State Correctional Facs.) Series A, 8%
2/1/07 Aaa 1,000,000 1,173,750 677553UP
(State Facs. Columbus State Bldg. Proj.)
Series A, 7.75% 10/1/08 A1 500,000 578,750 677553TA
(Workers Comp.) 4.75% 4/1/14 A 15,755,000 14,849,088 6775536N
Ohio Coal Rev. Series C, 6.90% 2/1/94 Aa 1,200,000 1,203,000 6775174T
Ohio Econ. Dev. Rev. Rfdg. (Kroger Co. Proj.)
Series 1992, 7.50% 9/1/10 Ba3 2,000,000 2,207,500 677555RF
Ohio Expositions Commission Ctfs. of Prtn.
(Agricenter Facs.):
8% 10/1/95 - 395,000 408,331 677559AG
8.25% 10/1/06 - 1,150,000 1,288,000 677559AX
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Cap. Corp. Multi-Family Hsg. Rev. Rfdg.:
Series A, 7.50% 1/1/24, (FNMA Coll.) AAA $ 1,000,000 $ 1,080,000
677220CG
Series C, 7.375% 7/1/23, (FNMA Coll.) AAA 2,000,000 2,135,000 677220CB
Ohio Gen. Oblig. (Cap. Appreciation
Infrastructure) Series 1989, 0% 9/1/07 Aa 7,225,000 3,666,688 677517T6
Ohio Gen. Oblig. (College Savings Bonds):
0% 8/1/09 Aa 2,290,000 1,016,188 677517Y2
0% 8/1/10 Aa 2,000,000 842,500 677517Y3
Ohio Higher Edl. Facs. Commission Rev.:
(Case Western Reserve Proj.):
Series A, 7.70% 10/1/18 Aa 2,000,000 2,257,500 677560WY
Series B, 6.50% 10/1/20 Aa 1,750,000 2,080,313 67756BAF
(Kenyon College Proj.):
5.30% 12/1/08 A 1,115,000 1,124,756 6775603Z
5.375% 12/1/16 A 1,500,000 1,496,250 6775604A
(Oberlin College Proj.) 9.25% 10/1/15
(Pre-Refunded to 10/1/95 @ 102) AA+ 1,000,000 1,121,250 677560QM
(Univ. Dayton Proj.) 7.25% 12/1/12,
(FGIC Insured) Aaa 1,000,000 1,160,000 677560ZD
Ohio Hsg. Auth. Agcy. Single Family Mtg. Rev.
Series F, 7.60% 9/1/16, (GNMA Coll.) AAA 2,410,000 2,542,550 677377TZ
Ohio Ind. Dev. Rev. Rfdg. (Kroger Co.)
8.65% 6/1/11 Ba3 2,300,000 2,670,875 6775653N
Ohio Liquor Profits Rev. Rfdg. 0% 9/1/00,
(BIG Insured) Aaa 3,720,000 2,762,100 677576BG
Ohio Poll. Cont. Rev. (Standard Oil Co.)
6.75% 12/1/15 A1 3,100,000 3,816,875 677596AH
Ohio Univ. Ctfs. of Prtn. (Stores & Receiving
Bldg. Proj.) 8.125% 6/1/05 - 1,045,000 1,136,438 677630DB
Ohio Wtr. Dev. Auth. Poll. Cont. Facs.
(Buckeye Pwr. Inc. Proj.) 10.875%
11/1/14 A1 250,000 272,500 677660AX
Ohio Wtr. Dev. Auth. Poll. Cont. Rfdg.
(Toledo Edison Co.) Series A, 7.55%
6/1/23 Baa3 7,800,000 8,580,000 677660DP
Ohio Wtr. Dev. Auth. Rev.:
(Pure Wtr.) Series I, 6% 12/1/16,
(AMBAC Insured) Aaa 1,000,000 1,105,000 677658Q4
3.55% 6/1/94, (MBIA Insured) Aaa 1,355,000 1,361,775 677658R8
Ohio Wtr. Dev. Auth. Rev. Rfdg. (Safe Wtr.)
Series A, 5% 12/1/12, (BIG Insured) Aaa 1,880,000 1,868,250 677658ZN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Olentangy Local School Dist. Unltd. Tax (BIG Insured):
7.75% 12/1/07 Aaa $ 500,000 $ 635,000 680616AZ
7.75% 12/1/09 Aaa 100,000 128,250 680616BB
7.75% 12/1/11 Aaa 190,000 246,525 680616AT
Olmsted Falls Local School Dist. Unltd. Tax
7.05% 12/15/11, (FGIC Insured) Aaa 1,000,000 1,161,250 681147DF
Ottawa County Gen. Oblig. Ltd. Tax 7.50%
10/1/14 A1 500,000 578,750 689325EG
Ottawa County San. Swr. Sys. Rev. Rfdg.:
(Cap. Appreciation) (Danbury Proj.)
0% 10/1/06 (AMBAC Insured) Aaa 1,445,000 760,431 689332BC
(Danbury Proj.) 7.375% 10/1/14,
(AMBAC Insured) Aaa 2,200,000 2,612,500 689332AN
Ottawa County Spl. Assessment (Portage
Catawba Isle) 7% 9/1/11, (AMBAC
Insured) Aaa 250,000 285,625 689325FX
Pickerington Local School Dist.:
Rfdg.(Cap. Appreciation) 0% 12/1/12,
(AMBAC Insured) Aaa 2,180,000 776,625 719780FC
Series B, 7.25% 12/1/13, (AMBAC Insured) Aaa 500,000 598,125 719780DU
7% 12/1/13, (AMBAC Insured) Aaa 2,000,000 2,355,000 719780DH
Sandusky County Hosp. Facs. Rev. Rfdg.
(Mem. Hosp. Proj.) 7.75% 12/1/09 BB 5,250,000 5,387,813 800142CE
Solon School Dist. Rfdg. (Cap. Appreciation):
0% 12/1/04, (AMBAC Insured) Aaa 1,020,000 605,625 834341HX
0% 12/1/05, (AMBAC Insured) Aaa 1,440,000 806,400 834341HY
0% 12/1/06, (AMBAC Insured) Aaa 1,370,000 720,963 834341HZ
0% 12/1/07, (AMBAC Insured) Aaa 1,200,000 592,500 834341JA
0% 12/1/08, (AMBAC Insured) Aaa 1,100,000 508,750 834341JB
Springboro Spl. Assessment 6.10% 6/1/23 - 1,350,000 1,393,875 850221FX
Springfield Local School Dist. Gen. Oblig.
Unltd. Tax 7.125% 12/1/12,
(AMBAC Insured) Aaa 1,000,000 1,150,000 851205BG
Stark-Belden Hsg. Dev. Corp. 1st Lien Rev.
Section 8, 7.60% 12/1/09, (FHA
Guaranteed) - 400,000 442,000 855289AB
Stark County Health Care Facs. Rev. (Rose Lane
Hosp. Proj.) 9% 12/1/23 - 6,135,000 6,909,544 854903AE
Stark County Hosp. Rev. (Doctors Hosp. of Stark
County) 6% 4/1/13 Baa 5,840,000 5,788,900 855348FS
Stark County Ind. Dev. Rev. Rfdg. (Kroger Co.)
7.20% 9/1/12 Ba3 3,100,000 3,359,625 855350DX
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Stow City School Dist. School Impt. Unltd. Tax
9.125% 12/1/06 A $ 590,000 $ 814,200 862403FB
Student Loan Fund Corp. Student Loan Rev:
Rfdg. Series A, 7.25% 2/1/08(b) A 2,000,000 2,162,500 863869AU
Series B, 8.875% 8/1/08(b) - 5,280,000 5,742,000 863869AV
Summit County Ind. Dev. Rev. Rfdg. (Surnow
Assoc. Proj.) 7.65% 10/1/06 Ba3 1,070,000 1,198,400 866051KY
Sylvania Gen. Oblig. 7.45% 12/1/10 Aa 875,000 1,025,938 871446FD
Tiffin San. Swr. Impt. Gen. Oblig. Ltd. Tax
7.10% 12/1/11 A 1,000,000 1,150,000 886563DG
Toledo Univ. Gen. Receipts 7.125% 6/1/20,
(MBIA Insured) (Pre-Refunded to 6/1/00
@ 102) (e) Aaa 700,000 824,250 915138BH
Trumbull County Hosp. Rev. (Trumbull Mem.
Hosp. Proj.) 9.625% 11/1/12, (FGIC Insured)
(Pre-Refunded to 11/1/95 @ 102) (e) Aaa 50,000 56,500 898138AQ
Union County Gen. Oblig. (Mem. Hosp.)
7.40% 12/1/10 A1 680,000 776,900 906412CC
Warren County: 935154ML
Ltd. Tax 6.65% 12/1/11 Aa 500,000 585,000 935154ML
6.10% 12/1/12 Aa 500,000 555,000 935154NA
Warren Gen. Oblig. Ltd. Tax 8.625% 11/15/13
(Pre-Refunded to11/15/98 @ 102) (e) Baa 1,000,000 1,226,250 935460EW
Warren Hosp. Rev. Rfdg. (Warren Gen.
Hosp. Proj.) Series B, 7.30% 11/15/14 BBB 4,105,000 4,469,319 935482CN
Warren Hsg. Dev. Corp. Rev. (1st Mtg. Rev.)
Section 8:
7.25% 6/1/04 - 200,000 205,000 935485BB
7.25% 6/1/05 - 200,000 205,500 935485BC
7.25% 6/1/06 - 200,000 205,750 935485BD
7.25% 6/1/07 - 200,000 206,000 935485BE
7.25% 6/1/08 - 200,000 206,250 935485BF
Washington County Ind. Dev. Rev. Rfdg.
(Kmart Corp. Proj.) 6.70% 3/15/07 A 1,080,000 1,196,100 938157BT
Wauseon Exempted Village School Dist.
7.25% 12/1/10 A 1,000,000 1,148,750 943436BQ
Westerville Minerva Park & Blendon Joint
Township Hosp. Dist. Rev.
Hosp. Impt. Rfdg.(St. Anns Hosp. Proj.)
9.50% 9/15/12 (AMBAC Insured) Aaa 150,000 166,875 960051AY
Rfdg. Series B, (St. Anns Hosp. Proj.) 7%
9/15/12, (AMBAC Insured) Aaa 2,000,000 2,292,500 960051BY
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Whitehall City School Dist. 7.25% 12/1/13
(Pre-Refunded to12/1/99 @ 102) A $ 500,000 $ 592,500 965152FR
Willoughby Gen. Oblig. Road Impt. Ltd.
Tax 7.40% 12/1/11 A 1,200,000 1,525,500 971090PR
Wright Univ. Gen. Receipts 5.15% 5/1/11,
(AMBAC Insured) Aaa 1,000,000 993,750 982354AT
Xenia Hsg. Dev. Corp. Rev. 1st Lien
(Xenia Tower Proj.) Section 8, 7.75%
2/1/10 - 2,095,000 2,163,088 984077AA
Youngstown Ltd. Tax 7.55% 12/1/11 Baa 1,500,000 1,683,750 987643RH
405,901,629
PUERTO RICO - 9.0%
Puerto Rico Commonwealth Aqueduct & Swr.
Auth. Rev. Series A, 7.875% 7/1/17 Baa 750,000 867,188 745160KC
Puerto Rico Commonwealth Gen. Oblig.:
Rfdg. Series 1988, 0% 7/1/07 Baa1 2,760,000 1,376,550 7451435D
Unltd. Tax Series 1991:
0% 7/1/06 Baa1 3,850,000 2,035,688 745144BX
0% 7/1/07 Baa1 3,150,000 1,571,063 745144BY
5% 7/1/21 Baa1 5,000,000 4,750,000 745144KJ
Puerto Rico Commonwealth Hwy. & Trns.
Auth. Rev. Series W, 5.50% 7/1/13 Baa1 15,250,000 15,459,688 745181BZ
Puerto Rico Commonwealth Urban
Renewal & Hsg. Corp. Rfdg. 7.875%
10/1/04 Baa1 2,000,000 2,340,000 745245ES
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg.
Series N, 0% 7/1/01, (BIG Insured) Aaa 4,125,000 2,908,125 745268JF
Puerto Rico Infrastructure Fing. Auth. Spl.
Tax Series 1988 A, 7.75% 7/1/08 Baa1 2,500,000 2,837,500 745219AQ
Puerto Rico Pub. Bldg. Auth. Gtd. Pub.
Ed. & Health Facs. Rfdg. Series I, 0%
7/1/04 (FGIC Insured) Aaa 5,620,000 3,400,100 745232GH
Puerto Rico Pub. Bldg. Auth. Rev. Rfdg.
Series L, 5.50% 7/1/21 Baa1 2,000,000 2,037,500 745235GJ
Puerto Rico Tel. Auth. Rev. 5.25% 1/1/04,
(AMBAC Insured) (d) Aaa 2,000,000 2,065,000 745297HX
41,648,402
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
U.S. VIRGIN ISLANDS - 0.4%
Virgin Islands Pub. Fin. Auth. Rev. Rfdg.
Series A, 7.25% 10/1/18 (Escrowed to
Maturity) (e) - $ 1,500,000 $ 1,687,500 927676CF
TOTAL MUNICIPAL BONDS
(Cost $411,789,092) 449,237,531
MUNICIPAL NOTES (A)- 2.8%
OHIO - 2.8%
Cincinnati Univ. Gen. Receipts BAN
Series S, 3.02% 9/1/94 MIG 1 2,800,000 2,809,688 914118SQ
Dayton Spl. Facs. Rev. Rfdg. (Emery Air Freight
Corp.) Series 1993-E, 3.15%,
LOC Mellon Bank, VRDN VMIG 1 3,000,000 3,000,000 239874AH
Ohio Air Quality Dev. Auth. Dev. Rev.
(JMG Funding Ltd. Partnership) Series 1992 B,
3.40%, LOC Societe Generale, VRDN (b) AA 5,000,000 5,000,000 677525KH
Ohio State Univ. Rev. (Gen. Receipts)
Series 1985 B, 3.25%, LOC Industrial Bank
of Japan, VRDN VMIG 1 1,890,000 1,890,000 677653QG
TOTAL MUNICIPAL NOTES
(Cost $12,693,956) 12,699,688
TOTAL INVESTMENTS - 100%
(Cost $424,483,048) $ 461,937,219
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(d) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price
of a comparable fixed rate security.
(e) Security collateralized by an amount sufficient to pay interest and
principal.
INCOME TAX INFORMATION
At December 31, 1993 the aggregate cost of investment securities for income
tax purposes was $424,483,048. Net unrealized appreciation aggregated
$37,454,171, of which $37,549,423 related to appreciated investment
securities and $95,252 related to depreciated investment securities.
The fund hereby designates $790,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
At December 31, 1993 the fund was required to defer $3,500,000 of losses on
futures contracts.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investments for the period ended is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 53.2% AAA, AA, A 51.0%
Baa 16.8% BBB 9.4%
Ba 3.8% BB 3.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 17.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investments, is as follows:
General Obligation 24.4%
Health Care 20.9
Water & Sewer 13.1
Others
(individually less than 10%) 41.6
TOTAL 100.0%
FIDELITY OHIO TAX-FREE HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1993
1.ASSETS 2. 3.
4.Investment in securities, at value (cost $424,483,048) 5. $ 461,937,219
(Notes 1 and 2) - See accompanying schedule
6.Interest receivable 7. 6,839,063
8. 9.TOTAL ASSETS 10. 468,776,282
11.LIABILITIES 12. 13.
14.Payable to custodian bank $ 47,632 15.
16.Payable for investments purchased 9,934,306 17.
18.Payable for fund shares redeemed 220,096 19.
20.Dividends payable 438,032 21.
22.Accrued management fee 155,984 23.
24.Other payables and accrued expenses 108,178 25.
26. 27.TOTAL LIABILITIES 28. 10,904,228
29.30.NET ASSETS 31. $ 457,872,054
32.Net Assets consist of: 33. 34.
35.Paid in capital 36. $ 420,133,674
37.Accumulated undistributed net realized gain (loss) on 38. 284,209
investments
39.Net unrealized appreciation (depreciation) on 40. 37,454,171
investment securities
41.42.NET ASSETS, for 38,092,243 shares outstanding 43. $ 457,872,054
44.45.NET ASSET VALUE, offering price and redemption 46. $12.02
price per share ($457,872,054 (divided by) 38,092,243 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
47.48.INTEREST INCOME 49. $ 27,611,433
50.EXPENSES 51. 52.
53.Management fee (Note 4) $ 1,801,750 54.
55.Transfer agent, accounting and custodian fees and 666,009 56.
expenses (Note 4)
57.Non-interested trustees' compensation 1,212 58.
59.Registration fees 21,580 60.
61.Audit 32,225 62.
63.Legal 5,033 64.
65.Miscellaneous 10,572 66.
67. 68.TOTAL EXPENSES 69. 2,538,381
70.71.NET INTEREST INCOME 72. $ 25,073,052
73.REALIZED AND UNREALIZED GAIN (LOSS) ON 75. 76.
INVESTMENTS
(NOTES 1 AND 3)
74.Net realized gain (loss) on:
77. Investment securities 13,696,874 78.
79. Futures contracts (934,372) 12,762,502
80.Change in net unrealized appreciation (depreciation) 81. 82.
on:
83. Investment securities 12,904,374 84.
85. Futures contracts (22,808) 12,881,566
86.87.NET GAIN (LOSS) 88. 25,644,068
89.90.NET INCREASE (DECREASE) IN NET ASSETS 91. $ 50,717,120
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED DECEMBER 31,
1993 1992
92.INCREASE (DECREASE) IN NET ASSETS
93.Operations $ 25,073,052 $ 22,678,473
Net interest income
94. Net realized gain (loss) on investments 12,762,502 1,413,229
95. Change in net unrealized appreciation (depreciation) 12,881,566 5,834,995
on investments
96. 97.NET INCREASE (DECREASE) IN NET ASSETS 50,717,120 29,926,697
RESULTING FROM
OPERATIONS
98.Distributions to shareholders from: (25,073,052) (22,678,473)
Net interest income
99. Net realized gain (9,306,252) -
100.Share transactions 158,431,961 151,122,417
Net proceeds from sales of shares
101. Reinvestment of distributions from: 19,461,633 17,572,989
Net interest income
102. 7,508,556 -
Net realized gain
103. Cost of shares redeemed (128,728,993) (118,849,817)
104. 56,673,157 49,845,589
Net increase (decrease) in net assets resulting from
share transactions
105. 73,010,973 57,093,813
106.TOTAL INCREASE (DECREASE) IN NET ASSETS
107.NET ASSETS 108. 109.
110. Beginning of period 384,861,081 327,767,268
111. End of period $ 457,872,054 $ 384,861,081
112.OTHER INFORMATION 114. 115.
113.Shares
116. Sold 13,275,725 13,271,507
117. Issued in reinvestment of distributions from: 1,624,371 1,544,224
Net interest income
118. 628,331 -
Net realized gain
119. Redeemed (10,764,781) (10,447,598)
120. Net increase (decrease) 4,763,646 4,368,133
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
121. YEARS ENDED DECEMBER 31,
122. 1993 1992 1991 1990 1989
123.SELECTED PER-SHARE DATA
124.Net asset value, $ 11.550 $ 11.320 $ 10.840 $ 10.790 $ 10.500
beginning of
period
125.Income from Inve .693 .718 .719 .726 .725
stment
Operations
Net interest
income
126. Net realized and .720 .230 .480 .050 .290
unrealized gain
(loss) on
investments
127. Total from invest 1.413 .948 1.199 .776 1.015
ment
operations
128.Less Distributions (.693) (.718) (.719) (.726) (.725)
From net interest
income
129. From net realize (.250) - - - -
d
gain on
investments
130. Total distribution (.943) (.718) (.719) (.726) (.725)
s
131.Net asset value, $ 12.020 $ 11.550 $ 11.320 $ 10.840 $ 10.790
end of period
132.TOTAL RETURN 12.56 8.66 11.45 7.50 9.99
% % % % %
133.RATIOS AND SUPPLEMENTAL DATA
134.Net assets, end o $ 457,872 $ 384,861 $ 327,767 $ 241,616 $ 200,941
f
period (000
omitted)
135.Ratio of expenses .57 .61 .64 .66 .71
to % % % % %
average net assets
136.Ratio of net intere 5.67 6.31 6.53 6.82 6.79
st % % % % %
income to average
net assets
137.Portfolio turnover 41 20 11 12 22
rate % % % % %
</TABLE>
FIDELITY OHIO MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 LIFE OF
YEAR FUND
Ohio Municipal Money Market 2.09% 18.65%
Consumer Price Index 2.75% 17.01%
Average Ohio Tax-Free
Money Market Fund 2.08% 17.19
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year or since the fund started on August 29, 1989. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. Comparing the fund's performance
to the consumer price index (CPI) helps show how your investment did
compared to inflation. To measure how the fund stacked up against its
peers, you can compare its return to the average Ohio tax-free money market
fund's total return. This average currently reflects the performance of 10
Ohio tax-free money market funds tracked by IBC/Donoghue. (The periods
covered by the CPI and IBC/Donoghue numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 LIFE OF
YEAR FUND
Ohio Municipal Money Market 2.09% 4.01%
Consumer Price Index 2.75% 3.69%
Average Ohio Tax-Free
Money Market Fund 2.08% 3.72%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/92 3/31/93 6/30/93 9/30/93 12/31/93
Ohio Municipal 3.01% 2.20% 1.88% 2.29% 2.44%
Money Market
Average Ohio Tax-Free 3.01% 2.13% 1.90% 2.25% 2.20%
Money Market Fund
Ohio Municipal Money 5.08% 3.72% 3.18% 3.87% 4.12%
Market Tax-equivalent
Average All Taxable 2.86% 2.66% 2.63% 2.65% 2.72%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 3.01
Row: 1, Col: 2, Value: 3.01
Row: 2, Col: 1, Value: 2.2
Row: 2, Col: 2, Value: 2.13
Row: 3, Col: 1, Value: 1.88
Row: 3, Col: 2, Value: 1.9
Row: 4, Col: 1, Value: 2.29
Row: 4, Col: 2, Value: 2.25
Row: 5, Col: 1, Value: 2.44
Row: 5, Col: 2, Value: 2.2
3% -
2% -
1% -
0%
Ohio Tax-Free
Money Market
Average Ohio
Tax-Free Money
Market Fund
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average tax-free money market fund. Or you can
look at the fund's tax-equivalent yield, which is based on a combined
effective 1993 federal and Ohio state income tax rate of 40.80%. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield -- the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield -- makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FIDELITY OHIO MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Fidelity Ohio
Municipal Money Market Portfolio
Q. JAN, WHAT HAS HAPPENED TO SHORT-TERM INTEREST RATES OVER THE LAST YEAR?
A. The key feature last year was the stability of short-term interest
rates. Both the federal funds rate - what banks charge each other for
overnight loans - and the discount rate - what the Federal Reserve charges
member banks - have been at or near 3% ever since the fall of 1992. While
tax-free interest rates have varied slightly along the way with the impact
of technical factors, the municipal market, too, has been remarkably
stable. Nor was inflation a big issue in the market, despite brief scares
last spring and again in November.
Q. HOW DID YOU MANAGE THE FUND IN THAT KIND OF ENVIRONMENT?
A. Largely with an eye toward factors affecting supply and demand. Summer
is the borrowing season for most states, including Ohio. The increased
supply of new issues drives interest rates up and prices down. Accordingly,
I took the opportunity to extend the fund's average maturity from around 60
days in June out to 80 days or more by the fall. Then as supply dried up
and we began to hear rumblings of inflation, I let the average maturity
roll back down toward a neutral target of 60 days. Finally, as inflation
fears subsided and supply reentered the market, I extended the fund to lock
in higher yields than were previously available. The fund's average
maturity at the end of December was 78 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on December 31, 1993 was 2.44%, compared to
3.01% a year ago, when technical factors lifted the yield temporarily. The
latest yield translates into a tax-equivalent yield of 4.12% for investors
in the 40.80% combined effective 1993 federal and state tax bracket. The
fund's total return for the entire year - which assumes reinvestment of
monthly dividends - was 2.09%. The average Ohio tax-free money market fund
had a total return of 2.08%.
Q. WHAT EXPLAINS PERFORMANCE?
A. There were a few factors; a 45.4% stake in issues subject to the
alternative minimum tax, which offer more yield; and a 12% stake in some
simple derivatives, among them. The derivatives I bought combine a
long-term municipal bond with a "put," or an option to sell to a third
party, typically a bank. The end product is an investment that pays a
short-term variable interest rate and can be put on short notice, usually
seven days. It acts much like any other variable rate demand note the fund
might own, with one key difference: the yield is slightly higher, a fact
that has more to do with the added complexity of these instruments than
added investment risk.
Q. WHAT'S AHEAD FOR THE FUND?
A. Assuming the economy continues to improve, the Fed could raise interest
rates, perhaps before the end of the second quarter of calendar 1994.
However, I wouldn't want to get too defensive and give up yield unless the
inflation outlook were to change dramatically. That suggests that a neutral
average maturity might be the best approach in the months ahead - somewhere
between 60 and 70 days.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality short-term Ohio
municipal securities
START DATE: August 29, 1989
SIZE: as of December 31,
1993, over $262 million
MANAGER: Janice Bradburn,
since October 1993; manager,
Fidelity and Spartan
Massachusetts Municipal
Money Market funds, since
January 1992; Fidelity New
York Tax-Free Money Market
Portfolio, since September
1989; and Spartan New
York Municipal Money Market
Portfolio, since February 1990
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face value
before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
FIDELITY OHIO MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
12/31/93 6/30/93 12/31/92
0 - 30 50 62 55
31 - 90 12 10 13
91 - 180 22 18 20
181 - 397 16 10 12
WEIGHTED AVERAGE MATURITY
12/31/93 6/30/93 12/31/92
Ohio Municipal
Money Market 78 days 61 days 61 days
Average Ohio Tax-Free
Money Market Fund* 71 days 64 days 58 days
ASSET ALLOCATION
AS OF 12/31/93 AS OF 6/30/93
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 9.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 1, Value: 50.0
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 8.0
Row: 1, Col: 4, Value: 33.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 49%
Commercial
paper 8%
Tender bonds 10%
Municipal
notes 27%
Other 6%
Variable rate
demand notes
(VRDNs) 50%
Commercial
paper 7%
Tender bonds 8%
Municipal
notes 33%
Other 2%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
FIDELITY OHIO TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENTS/DECEMBER 31, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - 100.0%
Akron Gen. Oblig. San. Swr. Sys. Impt.
BAN 2.80% 6/15/94 $ 3,000,000 $ 3,004,024 010033GY
Akron Gen. Oblig. Str. Impt. Spl. Assessment BAN
2.93% 12/15/94 1,000,000 1,001,668 010095AB
Bedford Heights Ind. Dev. (Olympic Steel) Series 1989,
3.45%, LOC Nat'l. City Bank, Cleveland, VRDN (b) 1,700,000 1,700,000
076122AB
Centerville School Dist. BAN 2.50% 6/29/94 5,000,000 5,000,000 152239DU
Cincinnati Univ. Gen. Receipts BAN: 914118SM
Series K-1, 2.81% 3/23/94 7,400,000 7,404,161 914118SM
Series N, 2.81% 3/23/94 2,400,000 2,401,350 914118SN
Cleveland-Cuyahoga County Port Auth. Rev. (Rock'n Roll
Hall of Fame & Museum Proj.) 3.35%, LOC Credit
Local De France, VRDN 5,400,000 5,400,000 186103AB
Cleveland Public Pwr. Sys. Rev. BAN, Series 93-B,
3.50% 8/1/94 9,000,000 9,021,322 186398BW
Dayton Spl. Facs. Rev. Rfdg. (Emery Air Freight Corp.)
Series 1993-E, 3.15%LOC Mellon Bank, N.A, VRDN 3,000,000 3,000,000
239874AH
Dublin BAN 3% 3/29/94 4,285,000 4,290,021 263713NQ
Fairfax Ind. Dev. Rev. (Johnson & Hardin Co. Proj.)
Series 1990, 3.40%, LOC Bank of Ohio, VRDN (b) 3,700,000 3,700,000
304040AA
Green Local School Dist. Unlimited Tax Gen. Oblig.
BAN 3.30% 4/14/94 6,000,000 6,010,938 393190DJ
Hamilton County Health Care Facs. Rev. (West Park
Retirement Commty.) Series 1989, 3%, LOC Fifth
Third Bank, VRDN 1,000,000 1,000,000 40727HAV
Hamilton County Ind. Dev. Rev. VRDN (b):
(Visual Management Group Proj.) Series 1989,
3.40% LOC National Bank of Detroit 1,140,000 1,140,000 407274DC
Holmes County Ind. Dev. Rev.
(Poultry Processing, Inc.) Series 1990, 3.50%,
LOC Rabobank Nederland, 500,000 500,000 436370AC
Lorain County Ind. Dev. (French Creek Partners)
Series A, 3.40%, LOC Central Trust, VRDN (b) 1,150,000 1,150,000
543587CP
Marion County Hosp. Impt. Rev. (Pooled Lease Prog.)
LOC Bank One, OT: 569122AY
Series 1991, 2.65% 5/1/94 4,230,000 4,230,000 569122AY
Series 1992, 2.90% 5/1/94 9,700,000 9,700,000 569122AZ
Medina County Ind. Dev. Rev. (North American Roto
Engravers, Inc. Proj.) Series 1988 3.35%,
LOC Bank One, VRDN (b) 1,040,000 1,040,000 584724CP
Montgomery County Ind. Dev. Rev. (Modern Industrial
Plastics, Inc.) Series 1988, 3.375%,
LOC Industrial Bank of Japan, VRDN 2,000,000 2,000,000 613535EY
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Mt. Vernon City School Dist. BAN 2.50% 6/1/94 $ 3,400,000 $ 3,400,000
623640CM
Muskingum County Ind. Dev. Rev. (Elder-Beerman
Stores Inc.) 2.95%, LOC Pittsburgh Nat'l. Bank, VRDN 700,000 700,000
628078BP
Ohio Air Quality Dev. Auth.:
Multi-Mode Rfdg. (Timken Proj.), 2.75%,
LOC Credit Suisse, VRDN 4,700,000 4,700,000 677525KD
(JMG Funding, LTD Prtn.) LOC Society Generale, VRDN (b): 677525KG
Series 1992 A, 3.15% 6,000,000 6,000,000 677525KG
Series 1992 B, 3.40% 7,300,000 7,300,000 677525KH
Ohio Custodial Receipts Series 1991 A-15, 3.25%
(Liquidity Enhancement Mitsui Bank, Ltd.) (c) 3,600,000 3,600,000
55377EAG
Ohio Higher Edl. Facs. Rev. Series 11-1990A 3.25%,
Partnership Ctfs. (Liquidity Enhancement Banker's
Trust )(c) 4,940,000 4,940,000 67756BDH
Ohio Ind. Dev. Rev. VRDN (b): 677565D7
(Aerolite Extrusion) Series 1991 IA, 3.50%
LOC Nat'l City Bank of Columbus 190,000 190,000 6775654Q
(All Tools, Inc.) Series 1989 IIIA, 3.50%,
LOC Nat'l City Bank of Columbus 105,000 105,000 677565D7
(Anomatic Corp.) Series 1989 I, 3.50%,
LOC Nat'l City Bank of Columbus 295,000 295,000 677565YS
(Arthur Corp.) Series 1989 IIIA, 3.50%,
LOC Nat'l City Bank of Columbus 340,000 340,000 677565D8
(Burnham Corp.): 677565XF
Series 1987 N, 3.50%, LOC Bank One 640,000 640,000 677565XF
Series 1988 II, 3.50%, LOC Central Trust Co. 530,000 530,000 677565YG
(CCE Inc.) Series 1989, 3.50%,
LOC Bank of Ohio 210,000 210,000 677565YQ
(Carpenter/Clapp & Haney Tool Co.)
Series 1987 P, 3.50%, LOC Bank One 435,000 435,000 677565XL
(Cole Tool & Die) Series 1988 H, 3.50%,
LOC Bank One 330,000 330,000 677565XQ
(Corpad Head Co.) Series 1988 II, 3.50%,
LOC Bank of Ohio 675,000 675,000 677565YJ
(Die Matic Inc.) Series O, 3.50%,
LOC Bank One, Columbus 475,000 475,000 677565XG
(Dramex Int'l., Inc.) VRDN (b): 677565XV
Series 1988 I, 3.50%, LOC Bank One 1,000,000 1,000,000 677565XV
Series 1988 II, 3.50%, LOC Bank of Ohio 200,000 200,000 677565YK
(EF Realty) Series A, 3.50%, LOC Nat'l.
City Bank, Cleveland 215,000 215,000 677565RC
(EPIC Technologies Inc.) Series 1988 D,
3.50%, LOC Bank One, Columbus 310,000 310,000 677565XT
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev., VRDN (b): 677565D7 - continued
(Economy Machine & Tool North Inc. Proj.)
Series 1988 II, 3.50%, LOC Nat'l. City Bank, Columbus $ 290,000 $ 290,000
677565YF
(Gary W. James) Series 1986 B,
3.50%, LOC Nat'l City Bank of Columbus 315,000 315,000 677565RF
(HGN Realty/Shalmet Ohio, Inc.) Series 1989 III A,
3.50%, LOC Nat'l City Bank of Columbus 1,840,000 1,840,000 677565E6
(Hydro Tube Corp.) 3.50%,
LOC Nat'l City Bank of Columbus 95,000 95,000 6775654U
(K&S Realty) Series 1989 I, 3.50%,
LOC Nat'l City Bank of Columbus 340,000 340,000 677565YR
(K&S Realty/Starr Fabricating, Inc.) Series 1989 III,
3.50%, LOC Nat'l City Bank of Columbus 255,000 255,000 677565E7
(Kaufmans Bakery) Series K, 3.50%,
LOC Bank One, Columbus 995,000 995,000 677565XH
(Masashi Nagai/Snair Co.) Series H, 3.50%,
LOC Bank One, Columbus 1,410,000 1,410,000 677565YD
(Midwest Acoust-A-Fiber, Inc.) Series 1989 I, 3.50%,
LOC Nat'l City Bank of Columbus 640,000 640,000 677565YP
(Morrow Macke Realty) Series 1988 C, 3.50%,
LOC Bank One 800,000 800,000 677565XS
(Oak Printing) Series 1991, 3.50%,
LOC Nat'l City Bank of Columbus 750,000 750,000 6775654B
(Plasticos Co.) Series 1989 IIIA, 3.50%,
LOC Nat'l City Bank of Columbus 770,000 770,000 677565D9
(Prentke Romich) Series 1989 III, 3.50%,
LOC Nat'l City Bank of Columbus 145,000 145,000 677565E2
(P. Thompson Steel Co.) Series 1988, 3.50%,
LOC Bank One, Columbus 500,000 500,000 677565XR
(Quick Tab) Series 1989 IIIA, 3.50%,
LOC Nat'l City Bank of Columbus 400,000 400,000 677565E5
(SBD Properties Co.) Series 1986 L, 3.50%,
LOC Nat'l. City Bank, Cleveland 215,000 215,000 677565RM
(Samuel and Annie Sherman) Series 1989 III A, 3.50%,
LOC Nat'l City Bank of Columbus 400,000 400,000 677565B5
(Sheffield Steel) Series 1988 B, 3.50%,
LOC Bank One 85,000 85,000 677565XP
(Southwest Fin. Svcs.) Series 1986, 3.50%,
LOC Nat'l. City Bank of Columbus 85,000 85,000 677565RJ
(Standby Screw) Series 1991, 3.50%,
LOC Nat'l City Bank of Columbus 940,000 940,000 6775654S
(Steubenville Area) Series 1988 II, 3.50%,
LOC Bank of Ohio 370,000 370,000 677565YM
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev., VRDN (b): 677565D7 - continued
(Thomas K. Issacs) Series 1990 IB, 3.50%,
LOC Nat'l City Bank of Columbus $ 270,000 $ 270,000 677565P2
(United Steel Svc.) Series 1988 J, 3.50%,
LOC Bank One 790,000 790,000 677565XW
(VRE Inc.) Series F, 3.50%,
LOC Bank One, Columbus 225,000 225,000 677565XU
(Valtronic Technology Inc.) 3.50%,
LOC Bank One, Columbus 85,000 85,000 677565ZL
(Walker-Williams Lumber Co.) Series 1989 IIIA, 3.50%,
LOC Nat'l City Bank of Columbus 1,370,000 1,370,00 677565E40
(Wooster Iron Metal Co.) Series 1988 R, 3.50%,
LOC Bank One 620,000 620,000 677565YC
Ohio Partnership Ctfs. SBPA Merrill Lynch (c) 232265A2:
(Cuyahoga County Hosp. Rev. CSA Health Network)
Series P-15 3.25% 8,000,000 8,000,000 232265A2
(Hamilton County Swr. Bonds) Series PA-15, 3.20% 5,660,000 5,660,000
407288GE
(Ohio Higher Ed. Bonds) Series P13, 3.20% 2,400,000 2,400,000
677597MT
(Ohio Wtr. Dev. Bonds): 6776583H
Series PA-1016A, 3.20% 2,940,000 2,940,000 6776583H
Series PA-1016B 3.20% 3,700,000 3,700,00 6776583M0
Ohio Pub. Facs. Commty. Higher Ed. Facs. Bonds,
Series II-93B, 4.625% 12/1/94 8,000,000 8,130,699 677597NP
Ohio Pub. Facs. Commty. Mental Health Facs. Bonds,
Series II-B/1993 B, 4.25% 6/1/94 2,000,000 2,011,842 677597MW
Ohio State Hwy. Bonds 6.75% 5/15/94 6,000,000 6,087,548 6775174U
Ohio Wtr. Dev. Auth. (Cleveland Elec. Proj.) VT
LOC Citibank: 679997RV
Series 1988A-1, 2.50% 2/22/94 (b) 8,500,000 8,500,000 679997RV
Series 1988A-2 2.50% 2/24/94 1,000,000 1,000,000 679997RT
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Rev. (Ohio Edison
Co. Proj.) Series 1988 B, 3.125% 9/3/94,
LOC Barclays Bank, OT (b) 8,000,000 8,004,749 677660DH
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Auth. VT
LOC Citibank, New York: 679997RW
(Cleveland Elec. Proj.) Series 1988A-2, 2.50%
2/22/94 VT (b) 3,000,000 3,000,000 679997RW
(Toledo Edison Co. Proj.) Series 1988A 2.50%
2/22/94 2,000,000 2,000,000 679997RU
Ohio Wtr. Dev. Auth Poll. Cont. Rev. (Dequesne Light Co.
Proj.) VT, LOC Toronto Dominion Bank (b): 679997RS
2.75% 1/27/94 2,000,000 2,000,000 679997RS
2.45% 2/23/94 3,500,000 3,500,000 679997SC
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Sharonville Ind. Dev. Rev. (Xtec, Inc.) Series 1991, 3.40%,
LOC Fifth Third Bank, VRDN (b) $ 2,000,000 $ 2,000,000 819875CH
Southwestern City School Dist. BAN (Franklin & Pickway
County) 2.75% 5/17/94 9,000,000 9,011,653 840658DK
Stark County BAN: 855345TQ
3.06% 7/13/94 11,375,000 11,388,509 855345TQ
3.02% 10/26/94 1,340,000 1,342,342 855345TR
Stark County Ind. Dev. Rev. (Liquid Cont. Corp. Proj.)
Series 1987, 3.35%, LOC Bank One, VRDN (b) 410,000 410,000 855350DR
Student Loan Fund Corp. Student Loan Rev. VRDN: 863869AD
Series 1983 A, 3.25%, LOC Fuji Bank 1,650,000 1,650,000 863869AD
Series 1988 B-1, 3.40%, LOC Sumitomo Bank (b) 8,275,000 8,275,000
863869AL
Series 1988 B-2, 3.40%, LOC Sumitomo Bank (b) 575,000 575,000 863869AM
Series 1988 B-3, 3.40%, LOC Sumitomo Bank Ltd. (b) 500,000 500,000
863869AN
Series 1990-A2, 3.35%, LOC Natwest (b) 3,800,000 3,800,000 863869AQ
Series 1990-A3, 3.35%, LOC Nat'l. Westminster (b) 4,500,000 4,500,000
863869AR
Summit County Ind. Dev. Rev.: 866051FR
(American Laser Tech Inc. Proj.) 3.65%,
LOC Fuji Bank(b) 3,000,000 3,000,000 866051KE
(Ganzhorn Properties Proj.) 3.35%
LOC Bank One, Akron,VRDN 1,170,000 1,170,000 866051KW
(Keltec Inc. Proj.) Series 1987, 3.35% VRDN (b) 420,000 420,000
866051FR
(Kuchar Proj.); 866051HS
Series 1987, 3.35% VRDN (b) 740,000 740,000 866051FS
3.05% 4/1/94, OT (b) 580,000 580,000 866051HS
(Mannix County Proj.) Series 1987, 3.35%
VRDN (b) 1,740,000 1,740,000 866051FT
(SGS Tool Co. Proj.) 3% 4/1/94 OT (b) 3,250,000 3,250,000 866051HQ
(Spark Tec Int'l. Proj.) Series 1989, 3.10%
5/1/94 OT (b) 485,000 485,000 866051HC
Talawanda City School Dist. BAN 3.20% 4/7/94 4,000,000 4,006,668
874092CL
Toledo-Lucas County Convention & Visitors Bureau
Rev. Rfdg. (Toledo-Lucas County Convention Ctr. Proj.)
Series 1991, 3.25% LOC Marine Midland Bank
VRDN 2,265,000 2,265,00 889239AC0
Trumbull County Ind. Dev. Rev. (McDonald Steel Corp.)
Series 1990, 3.40%, LOC Marine Bank, VRDN (b) 2,300,000 2,300,000
898140CG
University of Cincinnati Gen. Receipt BAN Series S,
3.02% 9/1/94 2,800,000 2,803,989 914118SQ
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Warren County Ind. Dev. Rev. VRDN: 935159BJ
(Amtex, Inc. Proj.) 3.25%, LOC National Bank of Detroit $ 1,000,000 $
1,000,000 935159BJ
(Johnson & Hardin Enterprise) Series 1990 A, 3.40%,
LOC Central Trust (b) 3,200,000 3,200,000 935159BR
Washington County Ind. Dev. Rev. (Forma Scientific, Inc. Proj.)
3.40%, LOC Bank of Ohio, VRDN (b) 1,000,000 1,000,000 938157BQ
TOTAL MUNICIPAL SECURITIES - 100% $ 262,631,483
Total Cost for Income Tax Purposes $ 262,631,483
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
RAN - Revenue Anticipation Notes
OT - Optional Tender
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in an underlying pool of municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1993, the fund had a capital loss carryforward of
approximately $11,200 of which $5,100 and $6,100 will expire on December
31, 1998, and 2000 respectively.
FIDELITY OHIO TAX-FREE MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1993
138.ASSETS 139. 140.
141.Investment in securities, at value (Note 1) - 142. $ 262,631,483
See accompanying schedule
143.Interest receivable 144. 1,425,484
145. 146.TOTAL ASSETS 147. 264,056,967
148.LIABILITIES 149. 150.
151.Payable to custodian bank $ 1,264,934 152.
153.Share transactions in process 253,726 154.
155.Dividends payable 18,766 156.
157.Accrued management fee 91,399 158.
159.Other payables and accrued expenses 56,801 160.
161. 162.TOTAL LIABILITIES 163. 1,685,626
164.165.NET ASSETS 166. $ 262,371,341
167.Net Assets consist of: 168. 169.
170.Paid in capital 171. $ 262,382,570
172.Accumulated net realized gain (loss) on 173. (11,229)
investments
174.175.NET ASSETS, for 262,382,570 shares 176. $ 262,371,341
outstanding
177.178.NET ASSET VALUE, offering price and 179. $1.00
redemption price per share ($262,371,341 (divided by)
262,382,570 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
180.181.INTEREST INCOME 182. $ 6,483,818
183.EXPENSES 184. 185.
186.Management fee (Note 4) $ 1,015,231 187.
188.Transfer agent, accounting and custodian fees and 386,857 189.
expenses (Note 4)
190.Non-interested trustees' compensation 3,063 191.
192.Registration fees 1,158 193.
194.Audit 17,894 195.
196.Legal 3,715 197.
198.Miscellaneous 5,739 199.
200. 201.TOTAL EXPENSES 202. 1,433,657
203.204.NET INTEREST INCOME 205. 5,050,161
206.207.NET REALIZED GAIN (LOSS) ON INVESTMENTS 2,115
(NOTE 1)
208.209.NET INCREASE IN NET ASSETS RESULTING FROM 210. $ 5,052,276
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED DECEMBER 31,
1993 1992
211.INCREASE (DECREASE) IN NET ASSETS
212.Operations $ 5,050,161 $ 7,132,648
Net interest income
213. Net realized gain (loss) on investments 2,115 (6,068)
214. Increase (decrease) in net unrealized gain from - (1,769)
accretion of market discount
215. 5,052,276 7,124,811
216.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
OPERATIONS
217.Distributions to shareholders from net interest (5,050,161) (7,132,648)
income
218.Share transactions at net asset value of $1.00 per 376,255,537 319,616,154
share
Proceeds from sales of shares
219. Reinvestment of distributions from: 4,776,146 6,754,471
Net interest income
220. Cost of shares redeemed (388,910,557) (303,999,410)
221. (7,878,874) 22,371,215
Net increase (decrease) in net assets and shares
resulting
from share transactions
222. (7,876,759) 22,363,378
223.TOTAL INCREASE (DECREASE) IN NET ASSETS
224.NET ASSETS 225. 226.
227. Beginning of period 270,248,100 247,884,722
228. End of period $ 262,371,341 $ 270,248,100
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
229. YEARS ENDED DECEMBER 31, AUGUST 29, 198
9
(COMMENCEME
NT
OF OPERATIONS) T
O
DECEMBER 31,
230. 1993 1992 1991 1990 1989
231.SELECTED PER-SHARE DATA
232.Net asset value, 1.000 1.000 1.000 1.000 1.000
beginning of period
233.Income from Inves .021 .028 .044 .058 .021
tment
Operations
Net interest income
234. Dividends from n (.021) (.028) (.044) (.058) (.021)
et
interest income
235.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
236.TOTAL RETURN (DAGGER) 2.09% 2.81% 4.50% 5.90% 2.15%
237.RATIOS AND SUPPLEMENTAL DATA
238.Net assets, $ 262,371 $ 270,248 $ 247,885 $ 213,658 $ 57,748
end of period
(000 omitted)
239.Ratio of expenses .59% .58% .47% .23% -
to
average net assets
240.Ratio of expenses .59% .59% .64% .69% 1.14%*
to
average net assets
before expense
reductions
241.Ratio of net intere 2.07% 2.78% 4.41% 5.77% 6.37%*
st
income to average
net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Ohio Tax-Free High Yield Portfolio (the high yield fund) is a fund
of Fidelity Municipal Trust. Fidelity Ohio Municipal Money Market Portfolio
(the money market fund) is a fund of Fidelity Municipal 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
Municipal Trust and Fidelity Municipal 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 following summarizes the significant accounting policies of the
money market fund and the high yield fund:
SECURITY VALUATION.
HIGH YIELD FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
losses deferred due to wash sales and futures and options transactions.
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January
1,1993, the funds adopted
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Statement of Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a result, the funds changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, amounts
as of December 31, 1992 have been restated/reclassified as follows:
HIGH YIELD FUND. Paid in capital and accumulated net realized loss on
investments increased by $63,423.
MONEY MARKET FUND. No adjustments were necessary.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due to the inability
of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD. Purchases and sales of securities, other than short-term
securities, aggregated $217,347,308 and $171,404,354 respectively.
The market value of futures contracts opened and closed amounted to
$238,156,510 and $243,366,517 respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a monthly basic 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 each fund. The group fee rate
is the weighted average of a series of rates ranging from .15% to .37% and
is based on the monthly average net assets of all the mutual funds advised
by FMR. The annual individual fund fee rate is .25%. For the period, the
management fees were equivalent to annual rates of .41% and .42%,
respectively of average net assets for the high yield and money market
funds, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .1325% to .37%. Effective November 1,1993, FMR has voluntarily
agreed to implement this new group fee rate schedule as it results in the
same or a lower management fee.
On December 15, 1993, the shareholders of the high yield fund voted to
approve a proposal to amend the management contract. The new management fee
will reflect the new group fee rate schedule.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of each Board of Trustees, the Plans also authorize payments
to third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $2,753 and
$101,895 for the high yield and money market funds, respectively, for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the
funds. The Bank has entered into a sub-contract with Fidelity Service Co.
(FSC), an affiliate of FMR, under which FSC performs the activities
associated with the funds' transfer and shareholder servicing agent and
accounting functions. The funds pay transfer agent fees based on the type,
size, number of accounts and number of transactions made by shareholders.
FSC pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. The accounting fee is based on the level of
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$452,121 and $174,640 for the high yield fund and $305,272 and $53,555 for
the money market fund, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Municipal Trust
and Fidelity Municipal Trust II and the
Shareholders of Fidelity Ohio Tax-Free
High Yield Portfolio and Fidelity Ohio
Municipal Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Fidelity Ohio Tax-Free High Yield Portfolio, a portfolio of the Fidelity
Municipal Trust , and Fidelity Ohio Municipal Money Market Portfolio, a
portfolio of the Fidelity Municipal Trust II including the schedules of
portfolio investments, as of December 31, 1993, and the related statements
of operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended for the
Fidelity Ohio Tax-Free High Yield Portfolio, and the financial highlights
for each of the four years in the period then ended and for the period from
August 29, 1989 (commencement of operations) to December 31, 1989 for the
Fidelity Ohio Municipal Money Market Portfolio. These financial statements
and financial highlights are the responsibility of the Funds' management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Ohio Tax-Free High Yield Portfolio and Fidelity Ohio Municipal
Money Market Portfolio as of December 31, 1993, the results of their
operations for the year then ended, the changes in their net assets for
each of the two years then ended, and the financial highlights for each of
the five years in the period then ended for the Fidelity Ohio Tax-Free High
Yield Portfolio and for each of the four years in the period then ended and
for the period from August 29, 1989 (commencement of operations) to
December 31, 1989 for the Fidelity Ohio Municipal Money Market Portfolio,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* 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. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Peter J. Allegrini, Vice President
HIGH YIELD FUND
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(Registered trademark)
MICHIGAN
MUNICIPAL
PORTFOLIOS
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
CHECK PAGE NUMBERS !!!
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
FIDELITY MICHIGAN TAX-FREE
HIGH YIELD PORTFOLIO
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 last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
FIDELITY MICHIGAN MUNICIPAL
MONEY MARKET PORTFOLIO
PERFORMANCE 26 How the fund has done over time.
FUND TALK 28 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 30 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 31 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 39 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 42 The auditor's opinion.
ACCOUNTANTS
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments - either municipal
bonds or municipal bond funds. Often these can provide higher after-tax
yields than comparable taxable investments. For example, if you're in the
new 36% federal income tax bracket and invest $10,000 in a taxable
investment yielding 7%, you'll pay $252 in federal taxes and receive $448
in income. That same $10,000 invested in a tax-free bond fund yielding 5.5%
would allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
FIDELITY MICHIGAN TAX-FREE HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value). You can also look at the fund's income. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Michigan Tax-Free High Yield 13.83% 61.89% 119.40%
Lehman Brothers Municipal Bond Index 12.29% 62.86% n/a
Average Michigan Tax-Exempt
Municipal Bond Fund 12.40% 59.32% n/a
Consumer Price Index (CPI) 2.75% 21.00% 34.13%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or since the fund started on November 12,
1985. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the performance of the Lehman Brothers Municipal Bond index - a
broad gauge of the municipal bond market. To measure how the fund stacked
up against its peers, you can look at the average Michigan tax-exempt
municipal bond fund, which reflects the performance of 24 Michigan
tax-exempt municipal bond funds tracked by Lipper Analytical Services. Both
benchmarks include reinvested dividends and capital gains, if any.
Comparing the fund's performance to the CPI helps show how your fund did
compared to inflation. (Figures for the CPI are as of the month end closest
to the fund's start.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Michigan Tax-Free High Yield 13.83% 10.11% 10.13%
Lehman Brothers Municipal Bond Index 12.29% 10.25% n/a
Average Michigan Tax-Exempt
Municipal Bond Fund 12.40% 9.76% n/a
Consumer Price Index 2.75% 3.89% 3.66%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Michigan Tax Free (081) Lehman Muni Bond Index
11/30/85 10000.00 10000.00
12/31/85 10228.04 10087.90
01/31/86 10687.19 10682.08
02/28/86 11127.76 11105.62
03/31/86 11215.73 11109.18
04/30/86 11211.16 11117.62
05/31/86 11014.05 10936.62
06/30/86 11104.96 11040.96
07/31/86 11192.51 11107.98
08/31/86 11728.63 11605.28
09/30/86 11744.86 11634.41
10/31/86 11980.10 11835.34
11/30/86 12202.92 12069.80
12/31/86 12174.63 12036.48
01/31/87 12524.17 12398.90
02/28/87 12647.80 12459.90
03/31/87 12511.95 12327.83
04/30/87 11594.89 11709.22
05/31/87 11456.19 11651.14
06/30/87 11689.71 11993.22
07/31/87 11879.96 12115.55
08/31/87 11906.65 12142.81
09/30/87 11314.43 11695.10
10/31/87 11388.40 11736.50
11/30/87 11631.88 12042.94
12/31/87 11832.70 12217.69
01/31/88 12356.20 12652.88
02/29/88 12509.85 12786.62
03/31/88 12221.63 12637.66
04/30/88 12272.39 12733.70
05/31/88 12347.33 12696.90
06/30/88 12576.27 12882.66
07/31/88 12686.04 12966.65
08/31/88 12749.39 12978.07
09/30/88 12970.04 13212.97
10/31/88 13241.11 13446.18
11/30/88 13134.04 13323.01
12/31/88 13372.66 13459.30
01/31/89 13563.89 13737.64
02/28/89 13481.08 13580.90
03/31/89 13486.10 13548.44
04/30/89 13881.01 13870.08
05/31/89 14164.98 14158.16
06/30/89 14347.57 14350.43
07/31/89 14479.62 14545.74
08/31/89 14366.23 14403.33
09/30/89 14332.92 14360.12
10/31/89 14477.63 14535.32
11/30/89 14678.29 14789.69
12/31/89 14738.67 14910.96
01/31/90 14647.76 14840.88
02/28/90 14772.60 14972.96
03/31/90 14766.57 14977.46
04/30/90 14511.72 14869.62
05/31/90 14855.92 15193.78
06/30/90 14983.11 15327.48
07/31/90 15193.41 15552.79
08/31/90 14963.53 15327.28
09/30/90 15038.11 15336.48
10/31/90 15180.59 15614.07
11/30/90 15477.85 15927.91
12/31/90 15497.50 15997.99
01/31/91 15644.75 16212.36
02/28/91 15761.71 16353.41
03/31/91 15792.95 16359.95
04/30/91 16055.17 16577.54
05/31/91 16128.95 16725.08
06/30/91 16105.12 16708.36
07/31/91 16359.20 16912.20
08/31/91 16555.78 17135.44
09/30/91 16737.51 17358.20
10/31/91 16919.67 17514.42
11/30/91 16981.94 17563.46
12/31/91 17362.94 17941.08
01/31/92 17425.81 17982.34
02/29/92 17454.90 17987.74
03/31/92 17474.70 17994.93
04/30/92 17629.58 18155.09
05/31/92 17820.61 18369.32
06/30/92 18133.46 18677.92
07/31/92 18795.51 19238.26
08/31/92 18530.13 19049.72
09/30/92 18655.94 19173.55
10/31/92 18340.70 18985.65
11/30/92 18789.33 19325.49
12/31/92 19018.73 19522.61
01/31/93 19297.47 19749.07
02/28/93 20073.13 20463.99
03/31/93 19844.03 20247.07
04/30/93 20055.87 20451.57
05/31/93 20189.52 20566.09
06/30/93 20536.19 20909.55
07/31/93 20521.04 20936.73
08/31/93 21007.44 21372.21
09/30/93 21273.22 21615.86
10/31/93 21305.56 21656.93
11/30/93 21166.56 21466.35
12/31/93 21649.22 21919.29
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Michigan Tax-Free High Yield Portfolio on November 30, 1985, shortly after
the fund started. As the chart shows, by December 31, 1993, the value of
your investment would have grown to $21,649 - a 116.49% increase on your
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond index did over the same period. With dividends reinvested,
the same $10,000 would have grown to $21,919 - a 119.19% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, 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)
INCOME
YEARS ENDED DECEMBER 31, 1993 1992 1991 1990 1989
Income return 6.28% 6.72% 7.26% 7.04% 7.34%
Capital gain return 2.17% 0.19% 0.00% 0.00% 0.00%
Change in share price 5.38% 2.63% 4.78% -1.89% 2.87%
Total return 13.83% 9.54% 12.04% 5.15% 10.21%
Income return, capital gain return, and change in share price are all part
of a bond fund's total return. An income return reflects the dividends paid
by the fund. A capital gain return reflects the amount paid by the fund to
shareholders based on the profits it has from selling bonds that have grown
in value. Both returns assume the dividends or gains are reinvested.
Changes in the fund's share price include changes in the prices of the
bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 35.46(cents) 70.91(cents)
Annualized dividend rate n/a 5.66% 5.79%
Annualized yield 5.09% n/a n/a
Tax-equivalent yield 8.34% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $12.42 over
the past six months and $12.24 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 38.94%
combined federal and state tax bracket.
FIDELITY MICHIGAN TAX-FREE HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Generally, interest rates fell
during the 12 months ended
December 31, 1993. As a result,
bond prices rose and most
fixed-income investors -
including those in tax-free bonds
- - enjoyed attractive returns.
The period began with worries of
rising interest rates. The
economic recovery was finally
taking hold, and the spending
plans of the president-elect were
still unclear. But the bond market
signaled its approval as
President Clinton promised to
reduce the deficit and fight
inflation. The yield on the
benchmark 30-year Treasury
bond declined steadily and
reached an historic low of 5.79%
in mid-October. By year-end,
mild inflation fears, fueled by a
strengthening economy, had
pushed up the yield on the
30-year bond to 6.35%. Two
factors affected tax-free bonds
specifically: on the positive side,
higher federal taxes -
discussed all year and approved
in August - boosted demand.
At the same time, record new
issuance kept supplies high,
which somewhat dampened
prices. Overall during the period,
tax-free bonds performed well
compared to other fixed-income
investments. The Lehman
Brothers Municipal Bond Index
- - a broad measure of the
tax-free bond market - rose
12.29%. By comparison, the
Lehman Brothers Aggregate
Bond Index - which tracks
investment-grade taxable bonds
- - rose only 9.75%, due in part
to relatively poor performance
by mortgage backed securities.
An interview with Peter Allegrini,
Portfolio Manager of Fidelity
Michigan Tax-Free High Yield Portfolio
Q. PETER, HOW DID THE FUND DO?
A. For the 12 months ended December 31, 1993, it had a total return of
13.83%. That beat the average Michigan tax-free bond fund, which returned
12.40% over the same period, according to Lipper Analytical Services.
Q. HOW DID THE FUND BEAT THE AVERAGE?
A. By having a longer duration than other Michigan funds - meaning it was
more sensitive to interest rate declines. So as interest rates fell over
the past year, its share price rose more than funds with shorter durations.
I extended the fund's duration mainly by buying non-callable and zero
coupon bonds. At the end of the period the fund had about a 10% stake in
non-callable bonds, which can't be prematurely returned to their issuers.
That also means they have a longer duration because non-callables always
trade to their maturity date, rather than a shorter call date. When
interest rates are falling and bond prices are rising, non-callable bonds
tend to do well. Zero coupon bonds - which made up about 11% of the fund's
investments at year end - behave in a similar way. On December 31, the
fund's duration stood at 8.5 years, up from 7.8 a year earlier.
Q. TO EXTEND THE FUND'S DURATION WHY DIDN'T YOU JUST BUY BONDS WITH LONGER
MATURITIES?
A. During the past year, the slope of the yield curve - or the difference
in yield between different maturities - was fairly flat. That meant you
weren't rewarded much for taking on the extra risk of buying a bond with a
30-year maturity. For example, you could pick up about 95% of the yield of
a 30-year bond with a 15-year bond. I just didn't think that a 5%
difference in yield justified the added price risk of a 30-year bond. So,
at the end of December, about 40% of the fund was concentrated in bonds
with maturities of ten to 20 years.
Q. THE FUND'S LARGEST SECTOR CONCENTRATION - AT 26.8% OF INVESTMENTS - IS
HEALTH CARE. ARE YOU CONCERNED THAT THESE BONDS MIGHT BE AFFECTED BY
HEALTH-CARE REFORM?
A. Not really. That's because I've tried to invest in bonds that will do
well under reform. A good example is Michigan Healthcare Corporation -
which is the fund's largest holding at 4% of the total investments. Its
bonds are rated B, which is lower than investment grade, so they provide an
attractive amount of income - about 9.5%.What I like about Michigan
Healthcare is that it has a niche. The group runs mental health-care
facilities across the state. Those facilities provide treatment to
drug-dependent adolescents and young adults, one of the only organizations
in the state to do so. What's more, the organization is well managed and
has an arrangement with the state to provide services. That said, I'll
continue to carefully monitor these bonds going forward.
Q. HOW DO YOU THINK MICHIGAN'S ECONOMY WILL FARE OVER THE NEXT 12 MONTHS?
A. I'm optimistic. Improved profits in the automobile industry are a good
sign. And now that the North American Free Trade Agreement has been
approved, Michigan's heavy manufacturing base will have more of a
competitive advantage. This, combined with the recent strength in the auto
industry, should contribute to a strong economy. While it's been at a
slower pace than some other "rust belt" states, Michigan has diversified
and includes more service-oriented businesses in the financial services,
technology and other sectors. These should provide real growth
opportunities for the state's economy.
Q. AFTER ENJOYING SUCH A STRONG YEAR IN 1993, CAN MUNICIPAL BONDS CONTINUE
TO POST SUCH IMPRESSIVE RETURNS?
A. Throughout the past year, municipal bond prices were artificially low,
in part because there was a record supply of bonds issued. But now, many of
the refinancings permitted by law have already taken place; and once those
refinancings taper off, I expect supply to be lower. On the demand side,
investors are just now beginning to calculate their 1993 tax bills. And I
think that once they see how much their taxes have risen, many will find
tax-free bonds a more attractive investment.
Q. SO, ARE YOU OPTIMISTIC ABOUT MUNICIPAL BONDS FOR 1994?
A. I am because I expect interest rates to continue to stay low, despite
some recent jitters in the bond market. Most commodity prices and wages -
two early warning signals for higher inflation - have stabilized with no
real signs of heading up. As long as inflation stays under control, and
economic growth stays at a 2% to 3% level, interest rates and bond yields
could continue at current levels. Even so, it's probably realistic for
investors to expect more modest returns than we've seen during the past 12
months.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Michigan state income
tax
START DATE: November 12,
1985
SIZE: as of December 31,
1993, over $563 million
MANAGER: Peter Allegrini,
since November 1985;
manager, Fidelity Advisor High
Income Municipal Portfolio,
since February 1992; Fidelity
Ohio Tax-Free Portfolio, since
November 1985; Spartan
Connecticut Municipal High
Yield Portfolio, since October
1987; Fidelity Minnesota
Tax-Free Portfolio, November
1985 - September 1993;
Spartan Pennsylvania
Municipal High Yield Portfolio,
August 1986 - September
1993
(checkmark)
PETER ALLEGRINI'S INVESTMENT
STRATEGY:
"I try to find the best value for
the money, across a variety of
credit qualities. I manage the
fund for total return, not just
high yield. The best way to
achieve a consistently high rate
of return is to keep the fund
invested for a substantial
amount of income and to take
advantage of changes in
interest rates, which
sometimes create inefficient
prices. In October, for
example, many investors sold
bonds because they feared a
surge in inflation. That created
an opportunity to buy some
attractive bonds at cheaper
prices."
(bullet) Although the fund invests
primarily in long-term,
investment grade (Baa or
above) bonds, up to one-third
of its assets may be in lower
quality bonds. At the end of
December, about 8% of the
fund's assets were Ba or
B-rated. These bonds can
provide higher income than
higher-rated bonds. Another
10% were non-rated bonds.
Non-rated doesn't necessarily
mean low-rated - it just
means that S&P or
Moody's haven't assigned a
rating.
(bullet) After health-care bonds,
local general obligation bonds
(GOs) - which are backed by
the taxing power of the issuer
- - were the fund's second
largest industry concentration
at year end. They were
attractive because throughout
most of 1993, GOs were in
abundant supply and were
offered at attractive prices.
FIDELITY MICHIGAN TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Health Care 27 25
General Obligation 14 16
Electric Revenue 12 15
Industrial Development 8 9
Transportation 7 2
AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 20.0 20.5
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 8.5 7.6
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF DECEMBER 31, 1993
(MOODY'S RATINGS)
Aaa 37%
Aa, A 30%
Baa 15%
Ba, B 8%
Non-rated 10%
Row: 1, Col: 1, Value: 37.0
Row: 1, Col: 2, Value: 30.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 8.0
Row: 1, Col: 5, Value: 10.0
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY MICHIGAN TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENTS/DECEMBER 31, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 98.0%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - 88.6%
Ann Arbor School Dist. Pub. Schools Ultd. Tax
(Cap. Appreciation) 0% 5/1/05 Aa $ 1,500,000 $ 845,625 035519NA
Bay City Gen. Oblig. (Cap. Appreciation)
0% 6/1/07, (AMBAC Insured) Aaa 1,595,000 787,531 072077JV
Brighton Area School Dist. (Livingston County)
Series II, 0% 5/1/15, (AMBAC Insured) Aaa 12,950,000 4,079,250 109367NU
Brighton Area School Dist.. Unltd. Tax:
Rfdg Series II, 0% 5/1/13, (AMBAC Insured) Aaa 10,050,000 3,567,750
109367NS
Series I, 0% 5/1/05, (AMBAC Insured) Aaa 3,320,000 1,888,250 109367KY
Brighton Livingston County Wtr. Supply Sys.
Ltd. Tax:
5.25% 11/1/08 A 200,000 199,000 109349EU
5.25% 11/1/09 A 200,000 198,250 109349EV
Central Michigan Univ. Rev. Rfdg. (Cap.
Appreciation) 6% 10/1/13, (MBIA Insured) Aaa 465,000 492,900 154123QQ
Chippewa Valley Schools Rfdg. Unltd. Tax,
5% 5/1/21, (FGIC Insured) Aaa 3,000,000 2,857,500 170016NU
Comstock Pub. Schools (Cap. Appreciation) 0%
5/1/05, (Cap. Guaranty Insured) Aaa 1,300,000 739,375 205723DT
Detroit City School Dist. 7.15% 5/1/11,
(AMBAC Insured) Aaa 2,000,000 2,370,000 251129SN
Detroit Convention Facs. Rev. Rfdg.
(Cobo Hall Expansion Proj.):
5.25% 9/30/07 A 3,000,000 2,966,250 251131BE
5.25% 9/30/12 A 13,500,000 13,111,875 251131BF
Detroit Econ. Dev. Corp. Ltd. Oblig. Rev.
(Michigan Health Care Corp. Proj.)
9.10% 12/1/09 - 3,905,000 4,100,250 251141AF
Detroit Gen. Oblig.:
6.35% 4/1/14 Ba1 3,500,000 3,552,500 251093KD
(Distributable State Aid):
5.25% 5/1/08, (AMBAC Insured) Aaa 2,500,000 2,503,125 251093JT
5.25% 5/1/09, (AMBAC Insured) Aaa 4,000,000 3,990,000 251093JU
7.20% 5/1/09, (AMBAC Insured)
(Pre-Refunded to 5/1/99 @ 102) (e) Aaa 2,500,000 2,825,000 251093GA
Detroit Hosp. Fin. Auth. Facs. Rev. (Michigan
Healthcare Corp. Proj.) 10% 12/1/20 B 14,655,000 16,340,325 251145AA
Detroit Swr. Disp. Rev. 8.379% 7/1/23,
(FGIC Insured) (d) Aaa 9,000,000 9,506,250 251237PH
Detroit Wtr. Supply Sys. Rev. Rfdg. 6.50%
7/1/15, (FGIC Insured) Aaa 15,000,000 17,381,250 251255TP
Eastern Michigan Univ. Rev. Rfdg. 6.375%
6/1/14, (AMBAC Insured) Aaa 2,000,000 2,197,500 276731RQ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Flint Hosp. Bldg. Auth. Rev. (Hurley Med. Ctr.):
Rfdg. 9.50% 7/1/06 Baa1 $ 5,670,000 $ 6,194,475 339511AQ
6.50% 7/1/20 Baa1 5,570,000 5,799,763 339511CC
Forest Hills Pub. Schools Gen. Oblig. Unltd.
Tax 7.375% 5/1/15 (Pre-Refunded
to 5/1/00 @ 101) (e) Aa 2,000,000 2,357,500 345748NJ
Grand Haven Elec. Rev. Rfdg. 5.25% 7/1/16,
(MBIA Insured) Aaa 8,000,000 7,870,000 385550CW
Grand Rapids Bldg. Auth. Ltd. Tax 10% 4/1/01,
(Pre-Refunded to 4/1/94 @ 102) (e) A1 345,000 357,938 386244DS
Grand Rapids San. Swr. Sys. Rev. Impt. & Rfdg.
7% 1/1/16 A1 1,000,000 1,112,500 386289BA
Grand Rapids Wtr. Supply Sys. Rev. 7.25%
1/1/20, (FGIC Insured) (Pre-Refunded to
1/1/00 @ 102) (e) Aaa 3,000,000 3,525,000 386316FS
Grand Valley Univ. Rev. 7.875% 10/1/08 A 1,000,000 1,143,750 386545AP
Greater Detroit Resource Recovery Auth. Rev.
Series G, 9.25% 12/13/08 BBB- 3,000,000 3,273,750 391689AG
Gull Lake Commty. School Dist. (Cap.
Appreciation) 0% 5/1/13, (FGIC Insured) Aaa 3,000,000 1,072,500
402748BW
Harbor Springs Pub. School Bldg. Unltd. Tax:
0% 5/1/11, (AMBAC Insured) Aaa 1,280,000 510,400 411558ED
0% 5/1/12, (AMBAC Insured) Aaa 1,390,000 524,725 411558EE
0% 5/1/13, (AMBAC Insured) Aaa 1,455,000 520,163 411558EF
Haslett Pub. School Dist. Unltd. Tax 7.50%
5/1/20 (Pre-Refunded to 5/1/00 @ 101) (e) A1 1,500,000 1,779,375
418308HY
Howell Pub. Schools Unltd. Tax
Rfdg. (Cap. Appreciation):
0% 5/1/10, (AMBAC Insured) Aaa 1,130,000 474,600 443114HQ
0% 5/1/11, (AMBAC Insured) Aaa 1,800,000 717,750 443114HR
0% 5/1/12, (AMBAC Insured) Aaa 2,755,000 1,002,131 443114HS
0% 5/1/13, (AMBAC Insured) Aaa 2,120,000 752,600 443114HT
0% 5/1/14, (AMBAC Insured) Aaa 3,000,000 1,008,750 443114HU
0% 5/1/15, (AMBAC Insured) Aaa 4,370,000 1,392,938 443114HV
0% 5/1/16, (AMBAC Insured) Aaa 3,695,000 1,117,738 443114HW
(Cap. Appreciation) 0% 5/1/06,
(FGIC Insured) Aaa 985,000 530,669 443114GN
Series 1991, 7% 5/1/20 (Pre-Refunded
to 5/1/01 @ 102) (e) A1 3,000,000 3,536,250 443114GU
Huron Valley School Dist. Gen. Oblig. Unltd. Tax
7.10% 5/1/08 (Pre-Refunded to
5/1/01 @ 102) (e) A1 2,500,000 2,962,500 447726EH
Huron Valley School Dist. Rfdg. Unltd. Tax
(Cap. Appreciation) 0% 5/1/11,
(FGIC Insured) Aaa 5,830,000 2,339,288 447726GN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Imlay City Commty. School Dist. Rfdg.
(Cap. Appreciation) 0% 5/1/06,
(FGIC Insured) Aaa $ 1,375,000 $ 740,781 452488DT
Kalamazoo City School Dist. Unltd. Tax
(School Bldg. & Site) 0% 5/1/07 Aa 1,195,000 598,994 483224DZ
Kalkaska Pub. Schools Unltd. Tax 0%
5/1/21, (AMBAC Insured) Aaa 980,000 226,625 483427DV
Kent County Refuse Disp. Sys. Ltd. Tax Rfdg.
8.40% 11/1/10 A1 2,000,000 2,282,500 490311AP
Kent Hosp. Fin. Auth. Rev. Rfdg. (Butterworth
Hospital) Series A, 7.25% 1/15/13 A1 5,685,000 6,878,850 490574GX
Kentwood Pub. School Kent County School
Bldg. & Site Rfdg. 6.40% 5/1/15 Aa 2,500,000 2,712,500 491746LR
Lansing Bldg. Auth. Rev. (Deferred Interest):
0% 6/1/10, (AMBAC Insured) Aaa 2,500,000 1,018,750 516393DE
0% 6/1/12, (FGIC Insured) Aaa 3,000,000 1,087,500 516393DG
Lowell Area School Dist. Unltd. Tax
(Cap. Appreciation):
Rfdg.:
0% 5/1/15, (FGIC Insured) Aaa 6,380,000 2,009,700 547694GJ
0% 5/1/16, FGIC Insured) Aaa 2,000,000 610,000 547694GK
0% 5/1/17, (FGIC Insured) Aaa 7,435,000 2,100,388 547694GL
0% 5/1/15, (FGIC Insured), (Pre-Refunded
to 5/1/05 @ 49) (e) Aaa 8,775,000 2,435,063 547694GA
Marquette City Hosp. Fin. Auth. Rev. Rfdg.
(Marquette Gen. Hosp.) Series C:
7.50% 4/1/07 A 1,000,000 1,115,000 571502BT
7.50% 4/1/19 A 1,190,000 1,322,388 571502BU
Menominee Area Pub. School Dist.
(Cap. Appreciation) 0% 5/1/05 A1 640,000 363,200 586889BN
Michigan Bldg. Auth. Rev.:
(Cap. Appreciation):
(Chippewa Correctional) Series I, 0%
10/1/00 A 2,275,000 1,706,250 594613C5
(Detroit Regional) Series I:
0% 10/1/99 A 2,000,000 1,577,500 594613C4
0% 10/1/01 A 1,000,000 712,500 594613C8
0% 10/1/02 A 2,000,000 1,352,500 594613D2
0% 10/1/04 A 8,120,000 4,922,750 594613D6
Series II:
6.75% 10/1/07, (AMBAC Insured) Aaa 2,100,000 2,375,625 594613Y6
6.75% 10/1/11 A 1,000,000 1,117,500 5946133N
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Comprehensive Trans. Rev. Rfdg.
Series II, 7.625% 5/1/11 A1 $ 2,145,000 $ 2,415,806 594636KG
Michigan Hosp. Fin. Auth. Rev.:
Rfdg.:
(Bay Med. Ctr.) Series A, 8.25% 7/1/12 Baa1 3,000,000 3,435,000
59465CSP
(Brighton Hosp.) Series A, 8.625%
10/1/18 - 1,550,000 1,631,375 59465CHH
(Detroit Macomb Hosp. Corp.) Series A:
7.40% 6/1/13 B 12,185,000 12,200,231 59465CCV
7% 6/1/15 B 1,345,000 1,284,475 59465CCW
(Detroit Med. Ctr.) Series B, 5.50%
8/15/23 A 5,000,000 4,787,500 59465CZ4
(Gratiot Commty. Hosp.) Series A,
8.75% 10/1/07 B 4,400,000 4,543,000 59465CKT
(McLaren Obligated Group) Series A:
5.375% 10/15/13 A 3,000,000 2,898,750 59465CT6
4.50% 10/15/21 A 8,475,000 7,129,594 59465CT7
(Port Huron Hosp.) Series A:
7.50% 7/1/05 Baa 1,000,000 1,051,250 59465CCE
7.625% 7/1/15 Baa 2,250,000 2,418,750 59465CCF
(Saratoga Commty. Hosp.) 8.75% 6/1/10 - 1,880,000 2,072,700 59465CB6
(Sisters of Mercy Health Corp.)
5.375% 8/15/14 (MBIA Insured) Aaa 9,950,000 10,024,625 59465CX2
(Daughters of Charity) (Providence Hosp.):
10% 11/1/15 Aa 1,090,000 1,230,338 5946483B
7% 11/1/21 Aa 1,000,000 1,128,750 59465CVJ
(Garden City Hosp.) 8.50% 9/1/17 Ba 2,000,000 2,227,500 59465CTS
(Harper Grace & Huron Valley Hosp.)
Series A, 10% 10/1/16 A 10,000 11,150 59465CK2
(Sisters Mercy Health Corp.) 7.50% 2/15/18 A 1,000,000 1,205,000
59465CTT
Michigan Hsg. Dev. Auth. Ltd. Oblig. Rev.
(Parkway Meadows Proj.) 6.85% 10/15/18,
(FSA Insured) Aaa 2,000,000 2,145,000 59465JFJ
Michigan Hsg. Dev. Auth. Rental Hsg. Rev.:
Series A, 6.60% 4/1/12 A+ 2,000,000 2,130,000 59465MCQ
Series B, 7.55% 4/1/23 A+ 4,750,000 5,141,875 59465MAW
Michigan Hsg. Dev. Auth. Single Family Mtg. Rev.
Series A:
7.70% 12/1/16 AA 3,005,000 3,196,569 594653EK
6.875% 6/1/23 AA 2,535,000 2,750,475 594653PN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Muni. Bond Auth. Rev. (Local Gov't.
Loan Prog.):
Rfdg.:
(Cap. Appreciation) Series A, 0% 12/1/07,
(FGIC Insured) Aaa $ 1,000,000 $ 483,750 594553ED
Series A:
0% 12/1/04, (FGIC Insured) Aaa 2,000,000 1,167,500 594553DZ
0% 12/1/05, (FGIC Insured) Aaa 1,855,000 1,017,931 594553EA
0% 12/1/06, (FGIC Insured) Aaa 5,000,000 2,581,250 594553EB
4.75% 12/1/09, (FGIC Insured) Aaa 6,000,000 5,790,000 594553EC
(Marquette Bldg.) Series D, 6.75% 5/1/21,
(AMBAC Insured) Aaa 2,475,000 2,784,375 594553LM
(Wayne County Proj.) Series A, 7%
12/1/09, (FGIC Insured) Aaa 5,750,000 6,511,875 5945528Q
Group 9, 8.75% 11/1/17 A 500,000 573,750 594552UK
Group 14, 7.70% 11/1/10, (AMBAC
Insured) Aaa 455,000 520,975 594552M2
Group 19, 7.50% 11/1/09, (AMBAC
Insured) Aaa 1,000,000 1,150,000 594552W5
Series C, 7.25% 5/1/20, (MBIA Insured) Aaa 500,000 581,250 5945528D
Michigan Pub. Pwr. Agcy. Rev. Rfdg.
(Belle River Proj.):
Series A, 5.25% 1/1/18 A1 6,375,000 6,223,594 594570EH
Series B, 5% 1/1/19 A1 15,500,000 14,705,625 594570FD
Michigan South Central Pwr. Agcy. Pwr. Supply
Sys. Rev. Rfdg.:
Series 1991, 6.75% 11/1/10 A 2,000,000 2,207,500 594689BR
5.90% 11/1/06, (MBIA Insured) Aaa 3,000,000 3,273,750 594689CD
5% 11/1/09, (AMBAC Insured) Aaa 1,675,000 1,654,063 594689BD
Michigan Strategic Fund Ltd. Oblig. Rev.:
Rfdg.:
(Detroit Edison Co.):
7% 7/15/08, (MBIA Insured) Aaa 2,000,000 2,350,000 594692C4
6.50% 2/15/16, (FGIC Insured) Aaa 2,000,000 2,200,000 594692Z5
7% 5/1/21, (AMBAC Insured) Aaa 8,500,000 10,710,000 594692C7
6.95% 9/1/21, (FGIC Insured) Aaa 1,000,000 1,132,500 594692S8
(Environmental Research Institute) 6.25%
8/15/06 A- 2,660,000 2,849,525 5946924Z
(Environmental Research Michigan Proj.)
8.125% 10/1/14 - 9,000,000 10,327,500 594692SZ
(Ford Co. Proj.) Series A, 7.10% 2/1/06 A2 4,000,000 4,770,000
594692B9
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Ltd. Oblig. Rev.: - continued
Rfdg.: - continued
(Kmart Corp. Proj.):
(Bad Axe) 6.70% 4/15/07 A $ 1,010,000 $ 1,128,675 594692Z4
(Eaton Twp.) 6.25% 9/1/06 A 1,200,000 1,294,500 5946924K
(Ironwood) 6.80% 6/15/07 A 555,000 622,294 594692Y6
(Roseville) 6.25% 10/1/06 A 2,100,000 2,262,750 5946924L
(Environmental Research Institute) 6.375%
8/15/12 A- 2,000,000 2,122,500 5946925B
(Gladwin Pines Nursing Home Proj.)
(Midland Hosp. Ctr.) 8.75% 1/1/08 A- 1,640,000 1,867,550 594692JV
(Mercy Svcs. for Aging Proj.) 9.40% 5/15/20 - 8,925,000 9,795,187
594692XT
(Michigan Health Care Corp. Proj.)
9.10% 12/1/14 - 1,860,000 1,953,000 594692TL
Michigan Univ. Hosp. Rev. Series 1990, 7%
12/1/21 Aa 1,000,000 1,177,500 914454V7
Midland County Econ. Dev. Corp. Poll. Cont.
Rev. Rfdg. (Subordinated Ltd. Oblig.)
Series B, 9.50% 7/23/09 (b) - 13,200,000 15,048,000 597901AD
Midland Wtr. Supply Sys. Rev. Rfdg.
7.20% 4/1/10 A 1,350,000 1,515,375 597596CK
Monroe County Econ. Dev. Corp. Ltd. Oblig.
Rev. Rfdg. (Detroit Edison Co.) Series AA,
6.95% 9/1/22, (FGIC Insured) Aaa 1,000,000 1,240,000 610647BL
Monroe County Poll. Cont. Rev. (Detroit Edison
Co. Proj.):
Series 1, 6.875% 9/1/22,
(MBIA Insured) (b) Aaa 3,000,000 3,348,750 610655DF
Series I-B, 6.55% 9/1/24,
(MBIA Insured) (b) Aaa 4,000,000 4,380,000 610655DH
Okemos Pub. School Dist. Rfdg. (Cap. Appreciation)
0% 5/1/12, (MBIA Insured) Aaa 1,000,000 378,750 678467GS
Plymouth-Canton Commty. School Dist. Unltd.
Tax Series C, 6.50% 5/1/16, (FGIC Insured) A1 2,000,000 2,187,500
729429EN
Pontiac Gen. Bldg. Auth. Rev. 6.875% 4/1/06,
(AMBAC Insured) Aaa 2,000,000 2,252,500 732545CK
Pontiac Hosp. Fin. Auth. Rev. (North Oakland
Med. Ctr. Obligated Group) 6% 8/1/18 Baa 5,000,000 4,918,750 732557AJ
Pontiac Stadium Bldg. Auth. Rev. 6.60% 3/1/03 Baa 1,145,000 1,169,331
732616BB
Port Huron Area School Dist. Unltd. Tax
(Cap. Appreciation) (School Bldg. & Site)
0% 5/1/08 A1 1,975,000 930,719 734353GL
Reed City Area Pub. Schools (Cap. Appreciation)
0% 5/1/12, (AMBAC Insured) Aaa 1,190,000 450,712 758165DB
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Rockford Pub. School Dist. Unltd. Tax Gen. Oblig.
Rfdg. 7.375% 5/1/19 (Pre-Refunded
to 5/1/00 @101) (e) A1 $ 2,000,000 $ 2,357,500 773318HC
Romulus Township School Dist. (Cap. Appreciation):
Series I, 0% 5/1/06, (FSA Insured) Aaa 3,610,000 1,944,887 776219GA
0% 5/1/20, (FGIC Insured) Aaa 1,390,000 333,600 776219JL
Royal Oak City School Dist. Unltd. Tax 0% 5/1/05,
(AMBAC Insured) Aaa 3,000,000 1,717,500 780427GP
Royal Oak Hosp. Fin. Auth. Hosp. Rev.
(William Beaumont Hosp.):
Series C, 7.375% 1/1/20 Aa 4,070,000 4,731,375 780486BC
Series D, 6.75% 1/1/20 Aa 2,750,000 2,994,062 780486BM
Royal Oak Hosp. Fin. Auth. (Beaumont
Properties, Inc.) Series E, 6.625% 1/1/19 Aa 2,000,000 2,172,500
780490AK
Saginaw Hosp. Fin. Auth. Hosp. Rev.:
Rfdg. (Saginaw Gen. Hosp.) 7.625%
10/1/19 A- 7,000,000 7,813,750 786744DE
(St. Lukes Hosp.) Series C, 6.75% 7/1/17,
(MBIA Insured) Aaa 2,000,000 2,235,000 786744FH
Sault Ste Marie (Cap. Appreciation) 0% 9/1/05,
(AMBAC Insured) Aaa 520,000 291,200 804413EC
St. Clair Shores Econ. Dev. Corp. Ltd. Oblig. Rev.
(Bon Secours Health Sys.) Series B, 7.50%
9/1/15 A1 2,200,000 2,477,750 788866BT
Tawas City Hosp. Fin. Auth. Hosp. Rev.
(St. Joseph Hosp. Proj.) Series A, 8.50%
3/15/12 - 2,515,000 2,672,187 876721AA
Three Rivers Area Hosp. Auth.:
Series A, 11% 11/1/08 - 300,000 321,750 885667AX
Series A, 11% 11/1/09 - 300,000 321,750 885667AY
University of Michigan Rev. Rfdg.
(Parking Sys.) Series A, 5% 6/15/15 Aa 1,000,000 971,250 9144546F
Vicksburg Commty. Schools 7% 5/1/07,
(MBIA Insured) (Pre-Refunded to 5/1/01
@ 102) (e) Aaa 2,250,000 2,652,187 925717DG
Waterford Township Econ. Dev. Corp. Rev.
Ltd. Tax Oblig. (Canterbury Health Care):
8% 7/1/08 - 550,000 558,937 941458AT
8.375% 7/1/23 - 1,300,000 1,348,750 941458AU
Wayne Charter County Arpt. Rev. (Subordinated
Lien) (Detroit Metropolitan Arpt.):
Rfdg. 5.25% 12/1/13 (MBIA Insured) Aaa 2,000,000 1,987,500 944314DZ
Series A, 6.75% 12/1/19, (MBIA Insured) Aaa 6,125,000 7,166,250
944314BG
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Wayne Charter County Arpt. Rev. (Subordinated
Lien) (Detroit Metropolitan Arpt.): - continued
Series B, 6.875% 12/1/11,
(MBIA Insured) (b) Aaa $ 1,500,000 $ 1,706,250 944314BX
Series B, 5.50% 12/1/21,
(MBIA Insured) Aaa 2,000,000 1,995,000 944314DH
Series B, 6.75% 12/1/21,
(MBIA Insured) (b) Aaa 3,300,000 3,729,000 944314BY
Wayne Charter County Spl. Arpt. Facs. Rev.
(Republic Airlines, Inc. Proj.) Series C,
10.375% 12/1/15 - 4,475,000 4,849,781 944315AA
Wayne County Arpt. Rev. (Subordinated Lien)
Series B, 7% 12/1/10, (AMBAC Insured) Aaa 1,500,000 1,771,875 944522PN
Wayne County Bldg. Auth. Ltd. Tax Series A,
8% 3/1/17 Baa 2,250,000 2,598,750 944488LM
West Ottawa Pub. School Dist. Unltd. Tax Gen.
Oblig. (Cap. Appreciation) 0% 5/1/06,
(MBIA Insured) Aaa 4,110,000 2,214,262 955023FF
Western Michigan Univ. Inverse Floating Rate
Notes 5.75% 7/15/17, (FGIC Insured) (d) Aaa 2,500,000 2,540,625
958638MB
Western Michigan Univ. Rev.:
Series A, 5% 7/15/21, (FGIC Insured) Aaa 3,600,000 3,469,500 958638LZ
Series B, 6.75% 7/15/11,
(AMBAC Insured) Aaa 3,000,000 3,378,750 958638KK
Western Townships Utils. Auth. Swr. Disp. Sys.:
Rfdg. 6.50% 1/1/10, (Cap. Guaranty
Insured) Aaa 1,000,000 1,085,000 959767BE
Ltd. Tax 8.20% 1/1/18 BBB+ 2,500,000 2,818,750 959767AK
Williamston Gen. Oblig. Rfdg. 6.90% 11/1/17,
(AMBAC Insured) Aaa 1,000,000 1,136,250 970276DL
Wyandotte Tax Increment Fin. Auth. Ltd. Tax
(Central Dev. Area Proj.):
7.75% 6/1/05 (Pre-Refunded to
6/1/99 @ 101) (e) BBB 500,000 566,875 982793BL
7.875% 6/1/08 (Pre-Refunded to
6/1/99 @ 101) (e) BBB 500,000 568,125 982793BQ
491,812,920
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
PUERTO RICO - 8.5%
Puerto Rico Commonwealth Aqueduct & Swr.
Auth. Rev. Series A, 7.875% 7/1/17 Baa $ 1,300,000 $ 1,503,125 745160KC
Puerto Rico Commonwealth Gen. Oblig. Rfdg.
Unltd. Tax 5% 7/1/21 Baa1 5,000,000 4,750,000 745144KJ
Puerto Rico Commonwealth Hsg. Banking & Fin.
Agcy. Single Family Rfdg.:
5.125% 12/1/04 Baa 3,450,000 3,445,687 745269CL
5.125% 12/1/05 Baa 1,890,000 1,878,187 745269CN
Puerto Rico Commonwealth Hwy. Auth. Hwy.
Rev. Rfdg. Series Q, 7.75% 7/1/16
(Pre-Refunded to 7/1/00 @ 102) (e) Baa1 500,000 608,750 745194QW
Puerto Rico Commonwealth Hwy. & Trans. Auth.
Hwy. Rev.:
Rfdg.:
Series W, 5.50% 7/1/13 Baa1 13,000,000 13,178,750 745181BZ
Series X, 5.50% 7/1/15 Baa1 4,000,000 4,060,000 745181FD
Series W, 5.50% 7/1/15 Baa1 3,000,000 3,045,000 745181CB
Puerto Rico Commonwealth Urban Renewal & Hsg.
Corp. Rfdg. 7.875% 10/1/04 Baa1 2,800,000 3,276,000 745245ES
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Resources
Auth. Pwr. Rev.:
Rfdg. Series M, 8% 7/1/08 Baa1 1,000,000 1,165,000 745268GZ
Series P, 7% 7/1/21 Baa1 1,750,000 1,977,500 745268LL
Series R, 6.25% 7/1/17 Baa1 3,000,000 3,206,250 745268ND
Puerto Rico Ind. Med. & Envir. Poll. Cont. Facs.
Fing. Auth. Rev. (Upjohn Co. Proj. Ltd.)
Series A, 7.50% 12/1/23 Aa3 2,100,000 2,428,125 745271CX
Puerto Rico Pub. Bldgs. Auth. Rev. Series K,
6.875% 7/1/21 (Pre-Refunded to
7/1/02 @ 101.50) (e) AAA 2,325,000 2,760,937 745235FW
47,283,311
U.S. VIRGIN ISLANDS - 0.3%
Virgin Islands Pub. Fin. Auth. Rev. Rfdg.
Series A, 7.25% 10/1/18 (Escrowed to
Maturity) (e) - 1,500,000 1,687,500 927676CF
GUAM - 0.6%
Guam Pwr. Auth. Rev. Series A, 5.25%
10/1/13 BBB 3,500,000 3,351,250 400653BF
TOTAL MUNICIPAL BONDS
(Cost $493,491,100) 544,134,981
MUNICIPAL NOTES (A) - 2.0%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (C) AMOUNT (NOTE 1)
MICHIGAN - 2.0%
Flint Hosp. Bldg. Auth. Rev. (Hurley Med. Ctr.)
Series 1985, 3.35%, LOC Comerica Bank,
Detroit, VRDN VMIG 1 $ 1,400,000 $ 1,400,000 339509BD
Grand Rapids Ind. Dev. Rev. (Rowe Int'l. Inc.)
3.55%, LOC Marine Midland Bank, VRDN - 2,300,000 2,300,000 386251AY
Michigan Strategic Fund Poll. Cont. Rev. Rfdg.
(Consumers Pwr. Co. Proj.) Series 1988 A,
4.25%, LOC Union Bank of Switzerland,
VRDN P-1 3,600,000 3,600,000 594693AJ
Michigan Univ. Regents Michigan Hosp. Rev.
Series 1992 A, 4.50%, VRDN VMIG 1 4,000,000 4,000,000 914454Z8
TOTAL MUNICIPAL NOTES
(Cost $11,300,000) 11,300,000
TOTAL INVESTMENTS - 100%
(Cost $504,791,100) $ 555,434,981
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(c)(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c)(c) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(c)(d) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
(c)(e) Security collateralized by an amount sufficient to pay interest and
principal.
INCOME TAX INFORMATION
At December 31, 1993, the aggregate cost of investment securities for
income tax purposes was $504,791,100. Net unrealized appreciation
(depreciation) aggregated $50,643,881, of which $50,901,842 related to
appreciated investment securities and $257,961 related to depreciated
investment securities.
The fund hereby designates $881,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investments for the period ended is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 56.3% AAA, AA, A 68.9%
Baa 13.0% BBB 7.0%
Ba 1.0% BB 0.0%
B 3.8% B 5.4%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 10.4%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investments, is as follows:
Health Care 26.8%
General Obligation 14.5
Electric Revenue 11.6
Others
(individually less than 10%) 47.1
TOTAL 100.0%
FIDELITY MICHIGAN TAX-FREE HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1993
5.ASSETS 6. 7.
8.Investment in securities, at value (cost $504,791,100) 9. $ 555,434,981
(Notes 1 and 2) - See accompanying schedule
10.Cash 11. 100,542
12.Receivable for investments sold 13. 2,461,095
14.Interest receivable 15. 8,373,467
16. 17.TOTAL ASSETS 18. 566,370,085
19.LIABILITIES 20. 21.
22.Dividends payable $ 2,553,711 23.
24.Accrued management fee 191,394 25.
26.Other payables and accrued expenses 132,613 27.
28. 29.TOTAL LIABILITIES 30. 2,877,718
31.32.NET ASSETS 33. $ 563,492,367
34.Net Assets consist of: 35. 36.
37.Paid in capital 38. $ 513,693,861
39.Accumulated undistributed net realized gain (loss) on 40. (845,375)
investments
41.Net unrealized appreciation (depreciation) on 42. 50,643,881
investment securities
43.44.NET ASSETS, for 45,672,886 shares outstanding 45. $ 563,492,367
46.47.NET ASSET VALUE, offering price and redemption 48. $12.34
price per share ($563,492,367 (divided by) 45,672,886 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
49.50.INTEREST INCOME 51. $ 33,712,037
52.EXPENSES 53. 54.
55.Management fee (Note 4) $ 2,196,049 56.
57.Transfer agent, accounting and custodian fees 822,362 58.
and expenses (Note 4)
59.Non-interested trustees' compensation 1,569 60.
61.Registration fees 16,265 62.
63.Audit 31,847 64.
65.Legal 8,124 66.
67.Miscellaneous 31,263 68.
69. 70.TOTAL EXPENSES 71. 3,107,479
72.73.NET INTEREST INCOME 74. 30,604,558
75.REALIZED AND UNREALIZED GAIN (LOSS) ON 77. 78.
INVESTMENTS
(NOTES 1 AND 3)
76.Net realized gain (loss) on:
79. Investment securities 13,885,333 80.
81. Futures contracts (1,012,951) 12,872,382
82.Change in net unrealized appreciation (depreciation) 83. 84.
on:
85. Investment securities 24,001,675 86.
87. Futures contracts (60,723) 23,940,952
88.89.NET GAIN (LOSS) 90. 36,813,334
91.92.NET INCREASE (DECREASE) IN NET ASSETS 93. $ 67,417,892
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED DECEMBER 31,
1993 1992
94.INCREASE (DECREASE) IN NET ASSETS
95.Operations $ 30,604,558 $ 26,672,483
Net interest income
96. Net realized gain (loss) on investments 12,872,382 2,051,934
97. Change in net unrealized appreciation (depreciation) 23,940,952 9,454,729
on investments
98. 99.NET INCREASE (DECREASE) IN NET ASSETS 67,417,892 38,179,146
RESULTING FROM
OPERATIONS
100.Distributions to shareholders from: (30,604,558) (26,672,483)
Net interest income
101. Net realized gain (10,681,220) (779,296)
102.Share transactions 223,810,116 183,778,511
Net proceeds from sales of shares
103. Reinvestment of distributions from: 23,680,481 20,376,627
Net interest income
104. 8,673,183 624,639
Net realized gain
105. Cost of shares redeemed (182,619,793) (130,866,137)
106. 73,543,987 73,913,640
Net increase (decrease) in net assets resulting from
share transactions
107. 99,676,101 84,641,007
108.TOTAL INCREASE (DECREASE) IN NET ASSETS
109.NET ASSETS 110. 111.
112. Beginning of period 463,816,266 379,175,259
113. End of period $ 563,492,367 $ 463,816,266
114.OTHER INFORMATION 116. 117.
115.Shares
118. Sold 18,029,885 15,942,738
119. Issued in reinvestment of distributions from: 1,932,855 1,766,537
Net interest income
120. 706,861 53,617
Net realized gain
121. Redeemed (14,614,309) (11,371,376)
122. Net increase (decrease) 6,055,292 6,391,516
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
123. YEARS ENDED DECEMBER 31,
124. 1993 1992 1991 1990 1989
125.SELECTED PER-SHARE DATA
126.Net asset value, $ 11.710 $ 11.410 $ 10.890 $ 11.100 $ 10.790
beginning of period
127.Income from Invest .709 .733 .745 .758 .759
ment
Operations
Net interest income
128. Net realized and .870 .320 .520 (.210) .310
unrealized gain (loss)
on investments
129. Total from investme 1.579 1.053 1.265 .548 1.069
nt
operations
130.Less Distributions (.709) (.733) (.745) (.758) (.759)
From net interest
income
131. From net realized g (.240) (.020) - - -
ain
on investments
132. Total distributions (.949) (.753) (.745) (.758) (.759)
133.Net asset value, $ 12.340 $ 11.710 $ 11.410 $ 10.890 $ 11.100
end of period
134.TOTAL RETURN 13.83% 9.54% 12.04% 5.15% 10.21%
135.RATIOS AND SUPPLEMENTAL DATA
136.Net assets, end of p $ 563,492 $ 463,816 $ 379,175 $ 279,429 $ 234,350
eriod
(000 omitted)
137.Ratio of expenses to .59% .61% .62% .64% .69%
average net assets
138.Ratio of net interest i 5.79% 6.36% 6.73% 6.98% 6.92%
ncome
to average net assets
139.Portfolio turnover rat 33% 15% 12% 18% 19%
e
</TABLE>
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 LIFE OF
YEAR FUND
Michigan Municipal Money Market 1.98% 15.57%
Consumer Price Index 2.75% 15.62%
Average All Tax-Free Money Market Fund 1.97% 14.63%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year or since the fund started on January 12, 1990. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. Comparing the fund's performance
to the consumer price index (CPI) helps show how your investment did
compared to inflation. To measure how the fund stacked up against its
peers, you can compare its return to the average all tax-free money market
fund's total return. This average currently reflects the performance of 338
all tax-free money market funds tracked by IBC/Donoghue. (The periods
covered by the CPI and IBC/Donoghue numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 LIFE OF
YEAR FUND
Michigan Municipal Money Market 1.98% 3.71%
Consumer Price Index 2.75% 3.69%
Average All Tax-Free Money Market Fund 1.97% 3.52%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/92 3/31/93 6/30/93 9/30/93 12/31/93
Michigan Municipal 2.95% 2.05% 1.74% 2.27% 2.31%
Money Market
Average All Tax-Free 2.71% 2.00% 1.83% 2.20% 2.16%
Money Market Fund
Michigan Tax-Free Money 4.83% 3.36% 2.85% 3.72% 3.78%
Market Tax-equivalent
Average All Taxable 2.86% 2.66% 2.63% 2.65% 2.72%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 2.95
Row: 1, Col: 2, Value: 2.71
Row: 2, Col: 1, Value: 2.05
Row: 2, Col: 2, Value: 2.0
Row: 3, Col: 1, Value: 1.74
Row: 3, Col: 2, Value: 1.83
Row: 4, Col: 1, Value: 2.27
Row: 4, Col: 2, Value: 2.2
Row: 5, Col: 1, Value: 2.31
Row: 5, Col: 2, Value: 2.16
3% -
2% -
1% -
0%
Michigan Municipal
Money Market
Average All
Tax-Free Money
Market Fund
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average all tax-free money market fund. Or you
can look at the fund's tax-equivalent yield, which is based on a combined
effective 1993 federal and Michigan state income tax rate of 38.94%. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio
Manager of Fidelity Michigan
Municipal Money Market Portfolio
Q. SCOTT, CAN YOU BRING US UP TO DATE WITH THE SHORT-TERM SIDE OF THE
MARKET AS OF THE END OF DECEMBER?
A. Over the past year, the market has been uneventful. The Federal Reserve
has kept the federal funds rate at 3% since September 1992, which in turn
has kept short-term interest rates low. Fears of inflation bounced rates up
slightly last May and again in late October. But neither episode caused me
to significantly change the way I managed the fund. Over the last six
months, supply and demand factors had a bigger influence on how I
positioned the fund.
Q. CAN YOU EXPLAIN?
A. Sure. Issuance of municipal debt in Michigan - especially by school
districts - is seasonal. The fund's average maturity was pretty short over
the summer, in the 50-60 day range. That was because of the low supply of
longer maturity fixed-rate notes, not because I thought interest rates were
going up. Supply increased in the fall as school districts issued debt.
Rates on longer-maturity issues were particularly attractive. The fund's
average maturity increased to 83 days by the end of October. Later in the
year, supply dropped off and the fund's average maturity shortened as a
result.
Q. LAST SUMMER, MICHIGAN ABOLISHED PROPERTY TAXES THAT PAY FOR SCHOOLS IN
AN EFFORT TO REFORM EDUCATION FUNDING. HAS THIS AFFECTED THE FUND'S
INVESTMENT IN SCHOOL DISTRICTS?
A. Not yet. The move doesn't take effect until July 1, 1994. Recently, the
governor and the legislature agreed on a new package of other tax increases
to replace the more than $6 billion lost in property tax funding. But
voters still have a say on a portion of the package. Obviously, investors
in school district debt are very concerned. Because of that concern, I've
limited the fund's school debt - about 7.4% of the fund on December 31 - to
those investments that mature before July. I'm holding off on buying any
more until I'm sure Michigan schools will receive proper funding.
Q. HOW DID THE FUND PERFORM?
A. Total return for the 12 months ended December 31, 1993 was 1.98%,
compared to 1.97% for the average all tax-free money market fund tracked by
IBC/Donoghue. The fund's seven-day yield on December 31 was 2.31%, compared
to 1.74% at the end of June. The latest yield translates into a
tax-equivalent yield of 3.78% for investors in the 38.94% combined
effective 1993 federal and state tax bracket.
Q. WHAT INFLUENCED PERFORMANCE?
A. One relatively new investing strategy that helped performance was the
use of simple derivatives. They combine a long-term municipal bond with a
"put," or an option to sell to a third party, typically a bank. The end
product is an investment that pays a short-term variable interest rate and
can be put on short notice, usually seven days. It acts much like any other
variable rate demand note, with one key difference: the yield is slightly
higher, a fact that has more to do with the added complexity of these
instruments than added risk. Derivatives made up 9.5% of the fund at the
end of December.
Q. HOW DO YOU SEE THE NEXT SIX MONTHS SHAPING UP?
A. The economy is continuing to show signs of strength. I wouldn't be
surprised if, sometime in the next few months, the Fed decides there's a
real threat of rising inflation and moves to tighten the money supply by
raising the federal funds rate. As the likelihood of tightening increases,
I might position the fund to take advantage of rising rates by shortening
its average maturity.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality, short-term,
Michigan municipal securities
START DATE: January 12, 1990
SIZE: as of December 31,
1993, over $175 million
MANAGER: Scott Orr, since
January 1992; manager,
Fidelity Connecticut Municipal
Money Market and Spartan
Connecticut Money Market
funds, since October 1993;
Fidelity New Jersey Tax-Free
Money Market and Spartan
New Jersey Money Market
funds, since
January 1992
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
12/31/93 6/30/93 12/31/92
0 - 30 59 68 58
31 - 90 9 8 11
91 - 180 20 9 25
181 - 397 12 15 6
WEIGHTED AVERAGE MATURITY
12/31/93 6/30/93 12/31/92
Michigan Municipal
Money Market Portfolio 57 days 62 days 49 days
Average All Tax-Free
Money Market Fund* 62 days 55 days 59 days
ASSET ALLOCATION
AS OF 12/31/93 AS OF 6/30/93
Row: 1, Col: 1, Value: 51.0
Row: 1, Col: 2, Value: 16.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 19.0
Row: 1, Col: 5, Value: 10.0
Row: 1, Col: 1, Value: 57.0
Row: 1, Col: 2, Value: 17.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 15.0
Row: 1, Col: 5, Value: 7.0
Variable rate
demand notes
(VRDNs) 51%
Commercial
paper 16%
Tender bonds 4%
Municipal
notes 19%
Other 10%
Variable rate
demand notes
(VRDNs) 57%
Commercial
paper 17%
Tender bonds 4%
Municipal
notes 15%
Other 7%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS/DECEMBER 31, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 91.1%
Bruce Township Hosp. Fin. Auth. Sisters of Charity Health Care
Sys. Rev. (St. Joseph Hosp. Ctr. Proj.) 2.65% 5/1/94,
(MBIA Insured) SBPA Morgan Guaranty, OT $ 2,225,000 $ 2,225,000 116721AA
Detroit Convention Facs. Rev. (Cobo Hall
Expansion Proj.) 9% 9/30/94 2,885,000 3,100,230 251131AQ
Detroit Gen. Oblig. Ltd. Tax Notes Series 1993, 3% 7/1/94,
LOC Comerica Bank 4,500,000 4,506,556 251093JA
Flint Econ. Dev. Corp. Ltd. Oblig. Rev. (Genessee Co.
Real Estate Proj.), 3.25%, LOC National Bank of
Detroit, VRDN (b) 1,300,000 1,300,000 339448AA
Grand Rapids Ind. Dev. Rev. (Rowe Int'l.) 3.55%,
LOC Marine Midland Bank, VRDN 3,000,000 3,000,000 386251AY
Kalamazoo Econ. Dev. Corp. Rev. Rfdg. (La Quinta Motor
Inns) Series 1991, 3.35%, LOC NationsBank, VRDN 2,340,000 2,340,000
483228BF
Livonia Econ. Dev. Corp. (Ajluni Proj.), 3%,
LOC National Bank of Detroit, VRDN (b) 2,400,000 2,400,000 539213AH
Michigan Bldg. Auth. Rev.:
(Univ. of Michigan Flint Classroom/Lab Bldg.)
Series 1987 I, 5.20% 3/1/94, (BIG Insured) 750,000 753,088 594613SH
Partnership Ctfs. Series PA-33, 3.25%,
(Liquidity Enhancement Merrill Lynch) (c) 8,860,000 8,860,000 5946137N
Michigan Custodial Receipts Series 1991 A-26, 3.30%,
(Liquidity Enhancement Sakura Bank, Ltd.),
LOC Sumitomo Bank (c) 1,750,000 1,750,000 55377EAU
Michigan Higher Ed. Facs. Auth. Rev. 3.40%, (MBIA
Insured), VRDN 200,000 200,000 594519AY
Michigan Higher Ed. Student Loan Auth. Rev.: (b)
Rfdg., Series XII-B, 3.30%, (AMBAC Insured)
SBPA Mitsubishi Bank, VRDN (b) 7,900,000 7,900,000 594520CA
Series XII-D, 3.30%, (AMBAC Insured)
SBPA Fuji Bank, VRDN (b) 5,000,000 5,000,000 594520CR
Michigan Hosp. Fin. Auth. Hosp. Equip. Loan Prog.
Series A, 2.90%, LOC First of America Bank, VRDN 9,000,000 9,000,000
59465CX9
Michigan Hosp. Fin. Auth. Hosp. Rev. Rfdg. (Sisters of Mercy
Health Corp.) Series 1993 P, 2.95% 8/15/94 3,430,000 3,430,000 59465CV3
Michigan Hosp. Fin. Auth. Rev. Bonds
(Detroit-Macomb Hosp. Corp.) 11.25% 6/1/94 5,640,000 5,948,239 594648G8
Michigan Hsg. Dev. Auth. Multi-Family Hsg. Rev.
Series 1988 A, VT: (b)
2.55% 1/25/94, LOC Sanwa Bank 2,150,000 2,150,000 598995CM
2.60% 2/11/94, LOC Sanwa Bank 1,550,000 1,550,000 598995CL
2.65% 2/17/94, LOC Sanwa Bank 2,700,000 2,700,000 598995CE
2.65% 2/24/94, LOC Sanwa Bank 1,000,000 1,000,000 598995CK
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Muni. Bond Auth. Rev. TAN:
Series 1993 B-16, 3% 5/5/94, LOC Comerica Bank $ 300,000 $ 300,167
594553R8
Series 1993 B-18, 3% 5/5/94, LOC Comerica Bank 700,000 700,390
594553S2
Michigan Pub. Pwr. Agcy. Rfdg. Rev. ( Belle River Proj.)
Series A, 2.75% 1/1/94 1,000,000 1,000,000 595996GH
Michigan Strategic Fund (Dow Chemical Proj.), VT:
Series 1987, 2.35% 2/10/94 1,500,000 1,500,000 594991KP
Series 1988: (b)
2.70% 1/13/94 2,490,000 2,490,000 594991KN
2.65% 2/16/94 7,900,000 7,900,000 594991KK
Michigan Strategic Fund Econ. Dev. Rev. (Yamaha Musical
Prod., Inc. Proj.) Series 1988, 3.60%,
LOC Dai-Ichi Kangyo Bank, VRDN (b) 5,900,000 5,900,000 59469HAA
Michigan Strategic Fund Ltd. Oblig. Rev., VRDN: (b)
(Alpha Tech Corp. Proj.) Series 1987, 3.35%,
LOC Bank of Tokyo 6,000,000 6,000,000 5946929A
(Donnelly Corp. Proj.) Series 1990 A, 3.25%,
LOC Bank of Tokyo 3,500,000 3,500,000 594692XH
(Hi Tech Mold & Engineering) Series 1991, 3.25%,
LOC Nat'l. Bank of Detroit 1,800,000 1,800,000 594692S9
(Michigan Sugar Co. - Carrollton) 3.25%,
LOC Trust Company Bank of Georgia 6,000,000 6,000,000 5946924F
(Ultimate Hydroforming Inc. Proj.), 3.25%,
LOC Nat'l Bank of Detroit 1,400,000 1,400,000 594692YX
Michigan Strategic Fund Solid Waste Disp. Rev.: (b)
(Grayling Gen. Station Proj.) Series 1990, 3.40%,
LOC Barclays Bank, VRDN 2,400,000 2,400,000 59469WAE
(S. D. Warren Co. Proj.), VT:
Series 1987 A, 2.25% 1/12/94,
LOC Sumitomo Bank 1,000,000 1,000,000 595996GH
Series 1987 B, 2.65% 1/14/94,
LOC Sumitomo Bank 2,250,000 2,250,000 595996GF
Series 1987 C, 2.25% 1/12/94,
LOC Sumitomo Bank 1,200,000 1,200,000 595996GG
Series 1987 C, 2.65% 1/18/94,
LOC Sumitomo Bank 2,000,000 2,000,000 595996GE
Series 1987 C, 2.65% 1/19/94,
LOC Sumitomo Bank 2,000,000 2,000,000 595996GD
Michigan Univ. Regents Mich. Hosp. Rev Series 1992 A,
4.50%, VRDN 700,000 700,000 914454Z8
Monroe County Econ. Dev. Corp. Rev. Rfdg.
(Detroit Edison Proj.) Series 1992 CC, 4.40%,
LOC Barclays Bank, VRDN 1,000,000 1,000,000 610647BM
Monroe Pub. School Dist. TAN 2.90% 4/1/94 11,000,000 11,004,761
611118CW
Northville School Dist. TAN 2.85% 4/5/94 2,700,000 2,701,356 667230MS
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Rochester Hills Econ. Dev. Corp. Ltd. Oblig. Rev.
(Cardell Corp.) 3.50%, LOC Comerica Bank,
VRDN (b) $ 300,000 $ 300,000 771381AC
Royal Oak City School Dist. Limited Tax TAN 2.75%
4/1/94 7,000,000 7,000,000 780427HV
Saline Econ. Dev. Corp. Rev. (Associated Springs Proj.)
Series 1988, 3.50%, LOC Fuji Bank, VRDN (b) 5,000,000 5,000,000
795208AA
Southfield Econ. Dev. Corp. Rev. (Radnor/Southfield Ltd.
Partner) Series 1985, 3.275%, LOC Bankers Trust,
VRDN 4,000,000 4,000,000 8442069A
Sterling Heights Econ. Dev. Corp. Ltd. Oblig. Rev.
(Cherrywood Ctr. Assoc. Proj.) 3.50%,
LOC Comerica Bank, VRDN (b) 5,300,000 5,300,000 859330AA
St. Clair County Econ. Dev. Corp. Poll. Cont. Rev. Partnership
Ctfs. (Detroit Edison Proj.), 3.20%,
(Liquidity Enhancement Merrill Lynch) (c) 6,200,000 6,200,000 788684AD
Troy School Dist. Rfdg. Rev. Series 1993 A, 2.65% 5/1/94,
(AMBAC Insured) 1,000,000 1,000,000 897404KR
162,659,787
PUERTO RICO - 8.9 %
Puerto Rico Commonwealth TRAN Series A, 3% 7/29/94 11,300,000 11,317,26
745144VX2
Puerto Rico Hsg. Fin. Corp. Single Family Mtg. Rev.,
Portfolio Two, Series F, 4.60% 4/15/94, MT 4,500,000 4,524,502 74527TDA
15,841,764
TOTAL INVESTMENTS - 100% $ 178,501,551
Total Cost for Income Tax Purposes $ 178,501,551
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in an underlying pool of municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1993, the fund had a capital loss carryforward of
approximately $13,600 of which $1,600, $1,700, and $10,300 will expire on
December 31, 1998, 1999, and 2001, respectively.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1993
140.ASSETS 141. 142.
143.Investment in securities, at value (Note 1) - 144. $ 178,501,551
See accompanying schedule
145.Cash 146. 530,926
147.Interest receivable 148. 986,295
149. 150.TOTAL ASSETS 151. 180,018,772
152.LIABILITIES 153. 154.
155.Payable for investments purchased $ 4,710,090 156.
157.Dividends payable 12,797 158.
159.Accrued management fee 59,270 160.
161.Other payables and accrued expenses 46,564 162.
163. 164.TOTAL LIABILITIES 165. 4,828,721
166.167.NET ASSETS 168. $ 175,190,051
169.Net Assets consist of: 170. 171.
172.Paid in capital 173. $ 175,203,622
174.Accumulated net realized gain (loss) on 175. (13,571)
investments
176.177.NET ASSETS, for 175,203,622 shares 178. $ 175,190,051
outstanding
179.180.NET ASSET VALUE, offering price and 181. $1.00
redemption price per share ($175,190,051 (divided by)
175,203,622 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
182.183.INTEREST INCOME 184. $ 4,160,443
185.EXPENSES 186. 187.
188.Management fee (Note 4) $ 670,133 189.
190.Transfer agent, accounting and custodian fees and 303,537 191.
expenses (Note 4)
192.Non-interested trustees' compensation 2,210 193.
194.Registration fees 1,324 195.
196.Audit 16,493 197.
198.Legal 4,284 199.
200.Miscellaneous 2,034 201.
202. Total expenses before reductions 1,000,015 203.
204. Expense reductions (Note 5) (3,437) 996,578
205.206.NET INTEREST INCOME 207. 3,163,865
208.209.NET REALIZED GAIN (LOSS) ON INVESTMENTS 210. (10,242)
(NOTE 1)
211.212.NET INCREASE IN NET ASSETS RESULTING FROM 213. $ 3,153,623
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED DECEMBER 31,
1993 1992
214.INCREASE (DECREASE) IN NET ASSETS
215.Operations $ 3,163,865 $ 4,489,746
Net interest income
216. Net realized gain (loss) on investments (10,242) 1,582
217. 3,153,623 4,491,328
218.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
OPERATIONS
219.Dividends to shareholders from net interest income (3,163,865) (4,489,746)
220.Share transactions at net asset value of $1.00 per 305,331,423 256,205,217
share
Proceeds from sales of shares
221. Reinvestment of dividends from net interest 2,958,037 4,160,244
income
222. Cost of shares redeemed (293,906,431) (274,699,600)
223. 14,383,029 (14,334,139)
Net increase (decrease) in net assets and shares
resulting from share transactions
224. 14,372,787 (14,332,557)
225.TOTAL INCREASE (DECREASE) IN NET ASSETS
226.NET ASSETS 227. 228.
229. Beginning of period 160,817,264 175,149,821
230. End of period $ 175,190,051 $ 160,817,264
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
231. YEARS ENDED DECEMBER 31, JANUARY 12, 199
0
(COMMENCEMEN
T
OF OPERATIONS) TO
DECEMBER 31,
232. 1993 1992 1991 1990
233.SELECTED PER-SHARE DAT
A
234.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
235.Income from Investment .020 .026 .044 .055
Operations
Net interest income
236. Dividends from net inter (.020) (.026) (.044) (.055)
est
income
237.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
238.TOTAL RETURN (DAGGER) 1.98% 2.66% 4.46% 5.66%
239.RATIOS AND SUPPLEMENTAL DATA
240.Net assets, end of period $ 175,190 $ 160,817 $ 175,150 $ 169,397
(000 omitted)
241.Ratio of expenses to ave .62% .49% .21% .22%*
rage
net assets (DAGGER)(DAGGER)
242.Ratio of expenses to ave .62% .61% .65% .77%*
rage
net assets before expense
reductions (DAGGER)(DAGGER)
243.Ratio of net interest inco 1.96% 2.64% 4.38% 5.78%*
me to
average net assets
</TABLE>
* ANNUALIZED
(DAGGER) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(DAGGER)(DAGGER) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
for the period ended December 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Michigan Tax-Free High Yield Portfolio (the high yield fund) is a
fund of Fidelity Municipal Trust. Fidelity Michigan Municipal Money Market
Portfolio (the money market fund) is a fund of Fidelity Municipal 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 Municipal Trust and Fidelity Municipal 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 following summarizes the significant accounting policies of the
money market fund and the high yield fund:
SECURITY VALUATION.
HIGH YIELD FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments,
if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
losses deferred due to wash sales and futures and options transactions.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January
1, 1993, the funds adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the funds changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of December 31, 1992 have been restated as follows:
HIGH YIELD FUND. Paid in capital and accumulated net realized loss on
investments decreased by $24,652.
MONEY MARKET FUND. No adjustments were necessary.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due to the inability
of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $229,775,566 and $164,852,618, respectively. The
market value of futures contracts opened and closed amounted to
$370,705,237 and $378,537,201, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a monthly fee that is calculated on
the basis of a group fee rate plus a fixed individual fund fee rate applied
to the average net assets of each fund. The group fee rate is the weighted
average of a series of rates ranging from .15% to .37% and is based on the
monthly average net assets of all the mutual funds advised by FMR. The
annual individual fund fee rate is .25%. For the period, the management
fees were equivalent to annualized rates of .42% of average net assets for
both the high yield and money market funds.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .1325% to .37%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
On December 15, 1993, the shareholders of the high yield fund voted to
approve a proposal to amend the management contract. The new management fee
will reflect the new group fee rate schedule.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the Act, FMR or the
funds' distributor, Fidelity Distributors Corporation (FDC), an affiliate
of FMR, may use their resources to pay administrative and promotional
expenses related to the sale of each fund's shares. Subject to the approval
of each Board of Trustees, the Plans also authorize payments to third
parties that assist in the sale of each fund's shares or render shareholder
support services. FMR or FDC has informed the funds that payments made to
third parties under the Plans amounted to $28,862 and $20,701 for the high
yield and the money market funds, respectively, for the period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the
funds. The Bank has entered into sub-contracts with Fidelity Service Co.
(FSC), an affiliate of FMR, under which FSC performs the activities
associated with the funds' transfer and shareholder servicing agent and
accounting functions. The funds pay transfer agent fees based on the type,
size, number of accounts and number of transactions made by shareholders.
FSC pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. The accounting fee is based on the level of
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$578,539 and $230,745 for the high yield fund and $254,135 and $33,742 for
the money market fund, respectively.
Shareholders participating in the Fidelity Ultra Service Account Program
(the Program) pay a $5.00 monthly fee to Fidelity Brokerage Services, Inc.
(FBSI), an affiliate of FMR, for performing services associated with the
Program. For the period, fees paid to FBSI by shareholders participating in
the Program amounted to $5,940.
5. EXPENSE REDUCTIONS.
FMR has voluntarily agreed to reimburse the money market fund for total
operating expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of .60% of average net assets
from January 1, 1993 through January 31, 1993. For the period the
reimbursement amounted to $3,437.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Municipal Trust and Fidelity Municipal Trust II
and the Shareholders of Fidelity Michigan Tax-Free High Yield
Portfolio and Fidelity Michigan
Municipal Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Fidelity Michigan Tax-Free High Yield Portfolio, a portfolio of Fidelity
Municipal Trust, and Fidelity Michigan Municipal Money Market Portfolio, a
portfolio of Fidelity Municipal Trust II including the schedules of
portfolio investments, as of December 31, 1993, and the related statements
of operations for the year then ended, the statements of changes in net
assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended
for the Fidelity Michigan Tax-Free High Yield Portfolio, and the financial
highlights for each of the three years in the period then ended and for the
period January 12, 1990 (commencement of operations) to December 31, 1990
for the Fidelity Michigan Municipal Money Market Portfolio. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Michigan Tax-Free High Yield Portfolio and Fidelity Michigan
Municipal Money Market Portfolio as of December 31, 1993, the results of
their operations for the year then ended, the changes in their net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended for the
Fidelity Michigan Tax-Free High Yield Portfolio, and the financial
highlights for each of the three years in the period then ended and for the
period January 12, 1990 (commencement of operations) to December 31, 1990
for the Fidelity Michigan Municipal Money Market Portfolio, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND
ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* 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. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Peter J. Allegrini, Vice President
HIGH YIELD FUND
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
