SPARTAN(registered trademark)
(registered trademark)
MICHIGAN MUNICIPAL INCOME
FUND
(FORMERLY FIDELITY MICHIGAN MUNICIPAL
INCOME FUND)
AND
FIDELITY
MICHIGAN MUNICIPAL MONEY
MARKET FUND
SEMIANNUAL REPORT
JUNE 30, 1997
CONTENTS
CHECK PAGE NUMBERS !!!
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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
PERFORMANCE 25 How the fund has done over time.
FUND TALK 27 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 29 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 30 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 39 Notes to the financial statements.
PROXY VOTING RESULTS 43
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THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT
AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Through the first six months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them periodically. The
stock market rebounded strongly from its early spring correction to
continue on its record-setting pace, as seen by the roughly 20%
year-to-date gain by the Standard & Poor's 500 Index. The bond market
posted moderate returns over the first half of the year, as positive news
on the inflation front helped soften the effects of a hike in short-term
interest rates by the Federal Reserve Board in late March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income, as reflected in the fund's yield, to measure performance. If
Fidelity had not reimbursed certain fund expenses, the past ten years total
returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Spartan Michigan Municipal Income Fund 2.96% 7.43% 35.65% 110.43%
Lehman Brothers Michigan Municipal 3.27% 8.40% n/a n/a
Bond Index
Michigan Municipal Debt Funds Average 2.72% 7.61% 36.75% 112.39%
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, six months, one year, five years or 10 years. For example, if
you had invested $1,000 in a fund that had a 5% return over the past year,
the value of your investment would be $1,050. You can compare the fund's
returns to the performance of the Lehman Brothers Michigan Municipal Bond
Index - a total return performance benchmark for Michigan investment-grade
municipal bonds with maturities of at least one year. To measure how the
fund's performance stacked up against its peers, you can compare it to the
Michigan municipal debt funds average, which reflects the performance of
Michigan tax-exempt municipal bond funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past six months average represents a
peer group of 48 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Spartan Michigan Municipal Income Fund 7.43% 6.29% 7.72%
Lehman Brothers Michigan Municipal 8.40% n/a n/a
Bond Index
Michigan Municipal Debt Funds Average 7.61% 6.46% 7.81%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking the arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
1987/06/30 10000.00 10000.00
1987/07/31 10162.75 10102.00
1987/08/31 10185.59 10124.73
1987/09/30 9678.97 9751.43
1987/10/31 9742.24 9785.95
1987/11/30 9950.53 10041.46
1987/12/31 10122.33 10187.16
1988/01/31 10570.15 10550.03
1988/02/29 10701.59 10661.54
1988/03/31 10455.04 10537.87
1988/04/30 10498.46 10617.96
1988/05/31 10562.56 10587.27
1988/06/30 10758.40 10742.16
1988/07/31 10852.31 10812.20
1988/08/31 10906.50 10821.72
1988/09/30 11095.26 11017.59
1988/10/31 11327.15 11211.50
1988/11/30 11235.54 11108.80
1988/12/31 11439.68 11222.45
1989/01/31 11603.27 11454.53
1989/02/28 11532.43 11323.83
1989/03/31 11536.71 11296.77
1989/04/30 11874.55 11564.95
1989/05/31 12117.47 11805.16
1989/06/30 12273.67 11965.47
1989/07/31 12386.63 12128.32
1989/08/31 12289.62 12009.58
1989/09/30 12261.13 11973.79
1989/10/31 12384.92 12120.23
1989/11/30 12556.58 12332.34
1989/12/31 12608.23 12433.22
1990/01/31 12530.47 12374.41
1990/02/28 12637.27 12484.54
1990/03/31 12632.11 12488.29
1990/04/30 12414.10 12397.87
1990/05/31 12708.54 12668.52
1990/06/30 12817.35 12779.87
1990/07/31 12997.25 12967.74
1990/08/31 12800.60 12779.44
1990/09/30 12864.39 12786.73
1990/10/31 12986.27 13018.68
1990/11/30 13240.56 13280.49
1990/12/31 13257.38 13338.26
1991/01/31 13383.35 13517.26
1991/02/28 13483.40 13634.86
1991/03/31 13510.12 13639.76
1991/04/30 13734.44 13821.17
1991/05/31 13797.56 13944.04
1991/06/30 13777.18 13930.24
1991/07/31 13994.54 14099.91
1991/08/31 14162.70 14285.60
1991/09/30 14318.16 14471.60
1991/10/31 14473.99 14601.85
1991/11/30 14527.26 14642.59
1991/12/31 14853.18 14956.82
1992/01/31 14906.97 14990.92
1992/02/29 14931.86 14995.71
1992/03/31 14948.80 15001.26
1992/04/30 15081.29 15134.77
1992/05/31 15244.70 15312.91
1992/06/30 15512.33 15569.86
1992/07/31 16078.69 16036.65
1992/08/31 15851.67 15880.29
1992/09/30 15959.29 15984.15
1992/10/31 15689.61 15827.02
1992/11/30 16073.39 16110.48
1992/12/31 16269.63 16274.97
1993/01/31 16508.09 16464.25
1993/02/28 17171.63 17059.76
1993/03/31 16975.64 16879.44
1993/04/30 17156.86 17049.75
1993/05/31 17271.19 17145.57
1993/06/30 17567.74 17431.73
1993/07/31 17554.79 17454.57
1993/08/31 17970.88 17817.97
1993/09/30 18198.24 18020.92
1993/10/31 18225.91 18055.70
1993/11/30 18107.00 17896.63
1993/12/31 18519.90 18274.43
1994/01/31 18771.43 18483.12
1994/02/28 18229.36 18004.41
1994/03/31 17405.31 17271.27
1994/04/30 17491.76 17417.73
1994/05/31 17581.29 17568.74
1994/06/30 17529.65 17461.40
1994/07/31 17838.58 17781.46
1994/08/31 17882.76 17842.99
1994/09/30 17641.20 17581.05
1994/10/31 17275.34 17268.81
1994/11/30 16731.50 16956.59
1994/12/31 17130.02 17329.81
1995/01/31 17645.34 17825.09
1995/02/28 18153.92 18343.45
1995/03/31 18002.87 18554.21
1995/04/30 18037.74 18576.11
1995/05/31 18619.28 19168.87
1995/06/30 18403.10 19002.10
1995/07/31 18520.63 19182.24
1995/08/31 18771.05 19425.47
1995/09/30 18916.30 19548.43
1995/10/31 19199.25 19832.67
1995/11/30 19566.65 20161.69
1995/12/31 19770.29 20355.45
1996/01/31 19907.79 20509.13
1996/02/29 19747.58 20370.69
1996/03/31 19454.42 20110.36
1996/04/30 19382.16 20053.44
1996/05/31 19363.77 20045.42
1996/06/30 19587.39 20263.72
1996/07/31 19760.79 20448.12
1996/08/31 19723.01 20443.21
1996/09/30 19947.67 20729.41
1996/10/31 20158.25 20963.86
1996/11/30 20527.88 21347.50
1996/12/31 20438.10 21257.84
1997/01/31 20452.98 21298.02
1997/02/28 20658.02 21493.54
1997/03/31 20362.43 21207.03
1997/04/30 20520.76 21384.53
1997/05/31 20810.97 21706.15
1997/06/30 21042.66 21937.32
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Spartan Michigan Municipal Income Fund on June 30, 1987. As the chart
shows, by June 30, 1997, the value of the investment would have grown to
$21,043 - a 110.43% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index, which reflects the
performance of the investment-grade municipal bond market, did over the
same period. With dividends reinvested, the same $10,000 would have grown
to $21,937 - a 119.37% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday
is no guarantee of how it will
do tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30,
1997 1996 1995 1994 1993 1992
Dividend returns 2.52% 5.63% 6.15% 5.40% 6.28% 6.72%
Capital appreciation 0.44% -2.25% 9.26% -12.90% 7.55% 2.82%
returns
Total returns 2.96% 3.38% 15.41% -7.50% 13.83% 9.54%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested, if any.
DIVIDENDS AND YIELD
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PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.55(cents) 27.88(cents) 61.64(cents)
Annualized dividend rate 4.87% 5.00% 5.48%
30-day annualized yield 4.62% - -
30-day annualized tax-equivalent yield 7.55% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.36 over
the past one month, $11.24 over the past six months and $11.25 over the
past one year, you can compare the fund's income over these three periods.
The 30-day annualized YIELD is a standard formula for all funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 38.82% combined effective 1997 federal and state tax bracket, but
does not reflect the payment of the federal alternative minimum tax, if
applicable. If Fidelity has not reimbursed certain fund expenses during the
period shown, the yield and tax-equivalent yield would have been 4.59% and
7.50%, respectively.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with David Murphy, Portfolio Manager of Spartan Michigan
Municipal Income Fund
Q. DAVE, HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS AND PAST YEAR?
A. For the six months that ended June 30, 1997, the fund had a total return
of 2.96%. To get a sense of how the fund did relative to its peers, the
Michigan municipal debt funds average returned 2.72% for the same period,
according to Lipper Analytical Services. The Lehman Brothers Michigan
Municipal Bond Index, which tracks the types of securities in which the
fund invests, had a six-month return of 3.27% as of June 30, 1997. For the
year ending June 30, 1997, the fund returned 7.43%, while the Michigan
municipal debt funds average returned 7.61%, according to Lipper. For the
same one-year period, the Lehman Brothers index returned 8.40%.
Q. HIGHER INTEREST RATES CAST A PALL OVER THE BOND MARKET DURING THE PAST
SIX MONTHS, ALTHOUGH MUNICIPALS FARED BETTER THAN U.S. TREASURIES. WHAT
ACCOUNTS FOR THE MUNICIPAL MARKET'S RELATIVELY STRONG PERFORMANCE?
A. A favorable supply and demand scenario was the key reason. Much of the
municipal market's better performance occurred toward the end of the period
when the available supply of tax-free bonds was limited. On the demand side
of the equation, there was evidence that some investors began to question
the high levels of the stock market and re-directed some of their
investment dollars into the municipal market. Additional municipal
purchases were triggered by upcoming municipal calls. By this I mean that
municipal issuers were expected to call - or redeem - a record amount of
their outstanding debt before maturity. In anticipation of those municipal
holdings being called, many investors bought new municipal bonds in their
place, increasing demand and raising prices.
Q. WHICH INDIVIDUAL HOLDINGS PERFORMED WELL DURING THE PAST SIX MONTHS?
WHICH HOLDINGS WERE DISAPPOINTMENTS?
A. On the positive side, bonds issued by Detroit Convention Facilities for
the Cobo Hall expansion project performed well and helped the fund's
performance. These bonds are backed by a combination of taxes - including
hotel occupancy and liquor taxes - which came in stronger than expected.
The fund's holdings in bonds issued by Michigan Strategic Fund for the
Environmental Research Institute of Michigan also made a positive
contribution to performance. The issuer tendered for, or bought back, these
bonds at a profit to the fund. On the negative side, bonds issued by
Michigan Health Care Corp., which has been in bankruptcy proceedings for
the past two years, modestly detracted from the fund's performance over the
past six months.
Q. HOW DID YOU STRUCTURE THE FUND DURING THE PERIOD?
A. With regard to maturity, I sold some bonds with maturities of between 10
and 15 years to make way for more bonds with maturities of between one and
five years. Here's why: During the period, yields on longer-term bonds
essentially remained flat, while yields on shorter-term bonds rose. To give
you an example, a 15-year Aaa-rated general obligation bond ended the
period with a yield of 5.20%, almost exactly where it started the period.
In contrast, the yield on a five-year Aaa-rated general obligation bond
ended the period at 4.40%, up from 4.25%. One of the basic laws of the bond
market is that bond prices generally move in the opposite direction of
their yields, and when bond yields rise their prices tend to fall. After
their yields had risen, I bought shorter maturity bonds because I felt that
they were attractively priced, offered better yields than they had
previously and had the appropriate amount of potential return given their
maturity.
Q. WHAT WERE OTHER FUNDAMENTAL ELEMENTS OF YOUR STRATEGY?
A. I continued to keep the fund "barbelled" in terms of the various
municipal bond coupons I could choose from. If you picture a barbell, the
middle is light and the ends are heavy. That's exactly how the fund looks.
On one end of the barbell are premium-coupon bonds, which pay higher annual
income than newly issued bonds and offer downside protection should the
market fall. On the other end are discount-coupon bonds, with annual income
below newly issued securities. They offer price appreciation potential
should the market rally.
Q. ACROSS THE NATION, THE HEALTH CARE INDUSTRY IS UNDERGOING RAPID CHANGE
WITH INCREASED COMPETITION AND MASSIVE CONSOLIDATION. HAVE THOSE TRENDS
AFFECTED HEALTH CARE ORGANIZATIONS IN MICHIGAN?
A. Not so far, because Michigan health care facilities have been relatively
immune to competitive and consolidation pressures. Many observers believe
that the state's constitution prohibits for-profit health care
organizations from acquiring Michigan hospitals. In a recent example,
Columbia/HCA - probably the nation's most aggressive acquirer of hospitals
- - was rebuffed by the state attorney general when it attempted to buy a
hospital in Lansing. In choosing health care investments for the fund, I
look for strong organizations with relatively high credit ratings, such as
Henry Ford and William Beaumont hospitals in the metro Detroit area, and
the University of Michigan Health Care System in Ann Arbor.
Q. WHAT'S YOUR OUTLOOK FOR MUNICIPALS?
A. As far as the Michigan municipal market goes, a lot will depend on the
strength of the auto industry. In my view, there aren't any tangible signs
that auto demand is slowing. From a national perspective, I'll be watching
supply and demand trends. During the past several years, the amount of
municipal bonds outstanding has shrunk considerably and, more recently, has
helped the municipal market outperform the taxable bond market. It's my
opinion that the total supply of municipals could increase slightly by the
end of this year from current levels. The question is, will there be enough
demand to digest that supply? I believe that will depend on how investors
perceive the attractiveness of municipals relative to other fixed-income
securities and especially equity investments.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current income for
Michigan residents by normally
investing in investment-grade
municipal securities whose
interest is free from federal
income tax and Michigan
income tax
FUND NUMBER: 081
TRADING SYMBOL: FMHTX
START DATE: November 12,
1985
SIZE: as of June 30, 1997,
more than $446 million
MANAGER: David Murphy,
since 1996; manager,
various Fidelity and Spartan
municipal income funds;
joined Fidelity in 1989
(checkmark)
DAVID MURPHY ON THE
STRENGTH OF MICHIGAN'S
ECONOMY AND ITS FISCAL
SITUATION:
"Michigan continues to enjoy
an economic expansion, which
has been driven primarily
by the rebound in the
automotive industry. Not only
has strong auto demand added
to job growth at the "Big Three"
- - Chrysler, Ford and General
Motors - but there also have
been significant employment
gains at the companies that
supply and service the auto
makers. The city of Detroit has
been one of the primary
beneficiaries of this strength. In
recent evidence of Detroit's
rebound, General Motors is
planning to expand its
corporate headquarters at the
downtown Renaissance
Center, rather than relocate
outside the city. From a fiscal
standpoint, Michigan's
employment growth has
translated into better revenue
collections for the state and
has aided the state in building
up its "rainy day" fund. The
state has made dramatic
improvements in its fiscal
situation since the beginning
of the decade and deserves
credit for making some tough
decisions - such as
equalizing school funding
across districts in the state."
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF JUNE 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Health Care 22.6 18.2
General Obligation 18.4 20.3
Electric Revenue 11.8 10.6
Water & Sewer 9.6 9.5
Housing 8.2 6.7
AVERAGE YEARS TO MATURITY AS OF JUNE 30, 1997
6 MONTHS AGO
Years 13.1 14.6
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF JUNE 30, 1997
6 MONTHS AGO
Years 6.9 7.7
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31, 1996
Row: 1, Col: 1, Value: 45.7
Row: 1, Col: 2, Value: 37.4
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.6
Row: 1, Col: 6, Value: 1.7
Row: 1, Col: 7, Value: 9.699999999999999
Aaa 52.3%
Aa, A 32.9%
Baa 7.3%
Ba, B 0.0%
Caa, C 0.6%
Non-rated 2.8%
Short-term investments 4.1%
Aaa 46.7%
Aa, A 38.4%
Baa 3.9%
Ba, B 0.0%
Caa, C 0.6%
Non-rated 0.7%
Short-term investments 9.7%
Row: 1, Col: 1, Value: 52.3
Row: 1, Col: 2, Value: 31.9
Row: 1, Col: 3, Value: 7.3
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.6
Row: 1, Col: 6, Value: 3.8
Row: 1, Col: 7, Value: 5.1
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL BONDS - 90.3%
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - 89.0%
Anchor Bay School Dist. 5.50% 5/1/18
(MBIA Insured) Aaa $ 2,720,000 $ 2,706,400
Clinton Township Bldg. Auth. 4.75% 11/1/10
(AMBAC Insured) Aaa 2,810,000 2,673,013
Clintondale Commty. Schools 5.50% 5/1/15 Aa2 2,205,000 2,202,244
Comstock Pub. Schools (Cap. Appreciation)
0% 5/1/05 (Cap. Guaranty Insured) Aaa 1,300,000 879,125
Davison Commty. School Dist. 5.375% 5/1/16
(FGIC Insured) Aaa 1,000,000 978,750
Dearborn Swr. Disp. Sys. Rev.:
Series A, 5.10% 4/1/12 (MBIA Insured) Aaa 1,625,000 1,572,188
6.50% 4/1/03 (MBIA Insured) Aaa 1,030,000 1,123,988
6.50% 4/1/04 (MBIA Insured) Aaa 1,095,000 1,203,131
Detroit City School Dist. Rfdg. 5.125% 5/1/07 Aa2 1,000,000 1,000,000
Detroit Convention Facs. Rev. Rfdg.
(Cobo Hall Expansion Proj.) 5.25% 9/30/12 A 12,700,000 12,287,250
Detroit Econ. Dev. Corp. Ltd. Oblig. Rev.
(Michigan Health Care Corp. Proj.)
9.10% 12/1/09 (e) - 3,665,000 659,700
Detroit Gen. Oblig.:
4.40% 4/1/98 Baa 1,005,000 1,007,643
5% 4/1/00 (FGIC Insured) Aaa 1,210,000 1,226,638
5% 4/1/01 (FGIC Insured) Aaa 1,000,000 1,013,750
Detroit Gen. Oblig. (Distributable State Aid):
5.20% 5/1/07 (AMBAC Insured) Aaa 4,000,000 4,040,000
5.25% 5/1/08 (AMBAC Insured) Aaa 7,000,000 7,052,500
5.25% 5/1/09 (AMBAC Insured) Aaa 4,500,000 4,494,375
Detroit Hosp. Fing. Auth. Facs. Rev.
(Michigan Health Care Corp. Proj.)
10% 12/1/20 (e) C 14,520,000 2,613,600
Detroit Swr. Disp. Rev.:
Series A, 6% 7/1/05 (MBIA Insured) Aaa 1,885,000 2,031,088
6.25% 7/1/07 (MBIA Insured) Aaa 1,130,000 1,248,650
5.70% 7/1/23 (FGIC Insured) Aaa 10,000,000 9,825,000
Detroit Wtr. Supply Sys. Rev. Rfdg.:
6.20% 7/1/04 (FGIC Insured) Aaa 3,795,000 4,093,856
6.25% 7/1/12 (FGIC Insured) Aaa 1,000,000 1,063,750
6.50% 7/1/15 (FGIC Insured) Aaa 16,000,000 17,900,000
Eastern Michigan Univ. Rev. 5.90% 6/1/02
(AMBAC Insured) Aaa 1,000,000 1,058,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Ferndale School Dist. Rfdg.:
6% 5/1/07 (FGIC Insured) Aaa $ 1,250,000 $ 1,354,688
6% 5/1/08 (FGIC Insured) Aaa 1,300,000 1,405,625
6% 5/1/09 (FGIC Insured) Aaa 1,300,000 1,400,750
Flint Hosp. Bldg. Auth. Rev. (Hurley Med. Ctr.)
6.50% 7/1/20 Baa1 5,570,000 5,583,925
Forest Hills Pub. Schools Gen. Oblig. Unltd. Tax
7.375% 5/1/15
(Pre-Refunded to 5/1/00 @101) (d) Aa 2,000,000 2,177,500
Greater Detroit Resource Recovery Auth. Rev.:
6.25% 12/13/05 (AMBAC Insured) Aaa 4,000,000 4,370,000
5.50% 12/13/04 (AMBAC Insured) Aaa 2,000,000 2,085,000
6.25% 12/13/05 (AMBAC Insured) Aaa 2,000,000 2,185,000
Gull Lake Commty. School Dist.
(Cap. Appreciation) 0% 5/1/13
(FGIC Insured) Aaa 3,000,000 1,256,250
Harbor Springs Pub. School Bldg. Unltd. Tax:
0% 5/1/11 (AMBAC Insured) Aaa 1,280,000 606,400
0% 5/1/12 (AMBAC Insured) Aaa 1,390,000 618,550
0% 5/1/13 (AMBAC Insured) Aaa 1,455,000 609,281
Hartland Consolidated School Dist. Unltd. Tax
5.125% 5/1/17 (FGIC Insured) Aaa 2,375,000 2,259,219
Holly Area School Dist.:
6.625% 5/1/03 (FGIC Insured) Aaa 1,225,000 1,345,969
6.625% 5/1/06 (FGIC Insured) Aaa 1,150,000 1,285,125
Howell Pub. Schools Rfdg. Unltd. Tax
(Cap. Appreciation) 0% 5/1/10
(AMBAC Insured) Aaa 1,130,000 567,825
Huron Valley School Dist. Rfdg. Unltd. Tax
(Cap. Appreciation) 0% 5/1/11
(FGIC Insured) Aaa 5,830,000 2,754,675
Imlay City Commty. School Dist. Rfdg.
(Cap. Appreciation) 0% 5/1/06
(FGIC Insured) Aaa 1,375,000 885,156
Kalamazoo City School Dist. Unltd. Tax
(School Bldg. & Site) 0% 5/1/07 Aa2 1,195,000 724,469
Kent County Refuse Disp. Sys. Ltd. Tax Rfdg.
8.40% 11/1/10 Aa 2,000,000 2,068,080
Kent Hosp. Fin. Auth. Rev. Rfdg. (Butterworth Hosp.)
Series A, 7.25% 1/15/13 A1 3,685,000 4,408,181
Lakeshore Pub. Schools (Berrien County) 6.80%
5/1/06 (MBIA Insured) Aaa 1,000,000 1,138,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Lansing Bldg. Auth. Rev. (Deferred Interest) 0%
6/1/12 (AMBAC Insured) Aaa $ 3,000,000 $ 1,305,000
Lowell Area School Unltd. Tax (Cap. Appreciation)
0% 5/1/15 (FGIC Insured) (Pre-Refunded to
5/1/05 @49.088) (d) Aaa 11,375,000 3,810,625
Marquette City Hosp. Fin. Auth. Rev. Rfdg.
(Marquette Gen. Hosp.) Series C:
7.50% 4/1/07
(Pre-Refunded to 4/1/99 @102) (d) A 1,000,000 1,073,750
5.875% 4/1/11 (FSA Insured) Aaa 2,750,000 2,866,875
7.50% 4/1/19
(Pre-Refunded to 4/1/99 @102) (d) A 1,190,000 1,277,763
Mason Pub. Schools Dist. 6.50% 5/1/05
(FGIC Insured) Aaa 1,200,000 1,321,500
Michigan Bldg. Auth. Rev.:
Rfdg. Series I:
6% 10/1/00 A1 1,375,000 1,435,156
6.25% 10/1/20 A1 1,500,000 1,526,250
Series II, 6.75% 10/1/11 A1 1,000,000 1,077,500
(Chippewa Correctional)
Series I, 0% 10/1/00 (d) Aaa 2,275,000 1,959,344
(Detroit Regional):
Series I (d):
0% 10/1/99 (Escrowed to Maturity) Aaa 2,000,000 1,812,500
0% 10/1/01 (Escrowed to Maturity) Aaa 1,000,000 818,750
0% 10/1/02 (Escrowed to Maturity) Aaa 2,000,000 1,555,000
0% 10/1/04 (Escrowed to Maturity) Aaa 8,120,000 5,704,300
6.25% 10/1/01 (AMBAC Insured) Aaa 1,000,000 1,067,500
(Facs. Prog.) Series I, 5.30% 10/1/10
(AMBAC Insured) Aaa 1,300,000 1,306,500
Michigan Comprehensive Trans. Rev. Rfdg.:
Series II, 7.625% 5/1/11 A1 2,145,000 2,243,970
Series B, 5.75% 5/15/04 A1 1,275,000 1,338,750
Michigan Gen. Oblig. (College Savings)
0% 8/1/01 Aa2 1,045,000 864,738
Michigan Hosp. Fin. Auth. Rev.:
Rfdg. (Bay Med. Ctr.) Series A, 8.25% 7/1/12 A3 3,000,000 3,367,500
Rfdg. (Detroit Med. Ctr. Sys.):
Series A:
6.375% 8/15/09 A2 1,000,000 1,047,500
6.50% 8/15/18 A2 4,000,000 4,165,000
Series B, 5.50% 8/15/23 A2 3,400,000 3,217,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Hosp. Fin. Auth. Rev.: - continued
Rfdg. (McLaren Obligated Group) Series A,
5.375% 10/15/13 A1 $ 4,280,000 $ 4,130,200
Rfdg. (Mercy Health Svcs.) Series T,
6% 8/15/06 Aa3 1,250,000 1,323,438
Rfdg. (Sisters of Mercy Health Corp.) 5.375%
8/15/14 (MBIA Insured) Aaa 9,950,000 9,887,813
(Crittenton Hosp.) 5.25% 3/1/14 A1 6,520,000 6,218,450
(Daughters of Charity Health Sys.)
5.50% 11/1/05 Aa 3,485,000 3,628,756
(Daughters of Charity) (Providence Hosp.)
7% 11/1/21 Aa 1,000,000 1,081,250
(Mercy Health Svcs.):
Series Q:
6% 8/15/08 (AMBAC Insured) Aaa 1,130,000 1,211,925
6% 8/15/10 (AMBAC Insured) Aaa 1,265,000 1,337,738
5.375% 8/15/26 (AMBAC Insured) Aaa 2,000,000 1,920,000
Series R, 5.25% 8/15/10 (AMBAC Insured) Aaa 2,195,000 2,186,769
(Presbyterian Villages):
6.40% 1/1/15 - 1,000,000 1,022,500
6.50% 1/1/25 - 1,225,000 1,252,563
(St. John Hosp. & Med. Ctr.):
6% 5/15/08 (AMBAC Insured) Aaa 1,615,000 1,744,200
6% 5/15/09 (AMBAC Insured) Aaa 1,710,000 1,840,388
Michigan Hsg. Dev. Auth. Rental Hsg. Rev. Series B:
5.80% 4/1/19 A+ 4,650,000 4,650,000
7.55% 4/1/23 A+ 4,750,000 5,011,250
Michigan Hsg. Dev. Auth. Single Family Mtg. Rev.:
Series A:
6.80% 12/1/16 AA+ 8,000,000 8,520,000
7.70% 12/1/16 AA+ 2,490,000 2,589,600
5.15% 12/1/26 (AMBAC Insured) Aaa 2,500,000 2,512,500
Series C:
5.95% 12/1/14 AA+ 2,500,000 2,518,750
5.90% 12/1/15 AA+ 2,000,000 2,015,000
6% 12/1/16 AA+ 2,500,000 2,518,750
5.95% 12/1/17 AA+ 2,905,000 2,937,681
Michigan Job Dev. Auth. Poll. Cont. Rev.
(General Motors Corp.) 5.55% 4/1/09 A3 8,825,000 8,847,063
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Muni. Bond Auth. Rev.:
Rfdg. (Local Gov't. Loan Prog.) Series A:
6% 10/1/03 Aa1 $ 2,490,000 $ 2,667,413
0% 12/1/04 (FGIC Insured) Aaa 2,000,000 1,390,000
0% 12/1/05 (FGIC Insured) Aaa 1,855,000 1,217,344
0% 12/1/06 (FGIC Insured) Aaa 5,000,000 3,106,250
4.75% 12/1/09 (FGIC Insured) Aaa 6,000,000 5,737,500
(Cap. Appreciation) Series A, 0% 12/1/07
(FGIC Insured) Aaa 1,000,000 588,750
(Local Govt. Loan Prog.) Group 19, 7.50%
11/1/09 (AMBAC Insured) Aaa 1,000,000 1,060,000
Michigan Pub. Pwr. Agcy. Rev. Rfdg.
(Belle River Proj.) Series A:
5.70% 1/1/03 A1 2,000,000 2,092,500
5.25% 1/1/18 A1 15,000,000 14,212,500
Michigan South Central Pwr. Agcy. Pwr. Supply Sys.
Rev. Rfdg.:
5.90% 11/1/06 (MBIA Insured) Aaa 3,000,000 3,210,000
5% 11/1/09 (AMBAC Insured) Aaa 1,675,000 1,651,968
Michigan State Univ. Rev.:
Rfdg. Series A, 6.25% 8/15/15 Aa2 3,145,000 3,247,213
6% 2/15/03 (AMBAC Insured) Aaa 1,030,000 1,098,237
6% 2/15/06 (AMBAC Insured) Aaa 1,065,000 1,140,880
Michigan Strategic Fund Ltd. Oblig. Rev.:
Rfdg. (Detroit Edison Co.):
Series AA, 6.40% 9/1/25 (MBIA Insured) Aaa 5,000,000 5,318,750
Series BB:
7% 7/15/08 (MBIA Insured) Aaa 2,000,000 2,342,500
6.50% 2/15/16 (FGIC Insured) Aaa 1,250,000 1,325,000
7% 5/1/21 (AMBAC Insured) Aaa 8,500,000 10,200,000
Rfdg. (Environmental Research Institute):
6.25% 8/15/06 A- 2,660,000 2,796,325
6.375% 8/15/12 A- 1,770,000 1,838,587
Rfdg. (Ford Co. Proj.) Series A, 7.10% 2/1/06 A1 4,000,000 4,595,000
(Gladwin Pines Nursing Home Proj.)
(Midland Hosp. Ctr.) 8.75% 1/1/08 A- 1,640,000 1,698,138
(Michigan Health Care Corp. Proj.)
9.10% 12/1/14 (e) - 1,795,000 323,100
Michigan Strategic Fund Poll. Cont. Rev. Rfdg.
(General Motors Corp.) 6.20% 9/1/20 A3 1,500,000 1,561,875
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Trunk Line Series A:
5.75% 10/1/04 A1 $ 4,145,000 $ 4,362,613
5.40% 11/1/11 (FGIC Insured) A1 1,585,000 1,590,944
Mona Shores School Dist. & School Bldg. & Site
6.75% 5/1/10 (FGIC Insured) Aaa 2,220,000 2,547,450
Monroe County Poll. Cont. Rev. (Detroit Edison Proj.)
Series CC, 7.50% 12/1/19 (AMBACInsured) Aaa 5,000,000 5,456,250
Okemos Pub. School Dist. Rfdg.:
(Cap Appreciation) 0% 5/1/12 (MBIA Insured) Aaa 2,500,000 1,112,500
0% 5/1/13 (MBIA Insured) Aaa 1,700,000 709,750
Port Huron Area School Dist. Unltd. Tax
(Cap. Appreciation) (School Bldg. & Site)
0% 5/1/08 Aa2 1,975,000 1,110,937
Rochester Community School Dist. Rfdg. Unltd. Tax
5.625% 5/1/11 (FGIC Insured) Aaa 1,000,000 1,038,750
Romulus Commty. Schools (Cap. Appreciation)
Series I, 0% 5/1/06 (FSA Insured) Aaa 3,610,000 2,323,937
Royal Oak City School Dist. Unltd. Tax 0% 5/1/05
(AMBAC Insured) Aaa 3,000,000 2,036,250
Royal Oak Hosp. Fin. Auth. Hosp. Rev. Rfdg.
(William Beaumont Hosp.):
5.50% 1/1/14 Aa3 4,000,000 4,000,000
(Cap. Appreciation) Series K, 0% 11/15/05 Aa3 5,910,000 3,885,825
St. Clair Shores Econ. Dev. Corp. Ltd. Oblig. Rev.
(Bon Secours Health Sys.) Series B,
7.50% 9/1/15 A2 1,900,000 2,035,375
St. John's Pub. Schools 6.50% 5/1/07
(FGIC Insured) Aaa 1,400,000 1,571,500
Univ. of Michigan Hosp. Rev.:
Rfdg. 5.75% 12/1/12 Aa2 9,000,000 9,090,000
Series 1990, 7% 12/1/21
(Pre-Refunded to 12/1/00 @ 102) (d) Aa 1,000,000 1,098,750
Vicksburg Commty. Schools 7% 5/1/07
(MBIA Insured) Aaa 1,750,000 1,938,125
Walled Lake Cons. School Dist. Rfdg. 5.30%
5/1/09 (MBIA Insured) Aaa 3,550,000 3,594,375
Wayne Charter County Arpt. Rev. (Sub. Lien)
(Detroit Metropolitan Arpt.):
Rfdg. Series C, 5.25% 12/1/13
(MBIA Insured) Aaa 2,000,000 1,945,000
Series B, 6.875% 12/1/11
(MBIA Insured) (b) Aaa 1,500,000 1,633,125
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Wayne County Bldg. Auth. Ltd. Tax Series A,
8% 3/1/17
(Pre-Refunded to 3/1/02 @ 102) (d) Baa2 $ 2,250,000 $ 2,607,187
West Ottawa Pub. School Dist. Rfdg. 5.25%
5/1/10 (FGIC Insured) Aaa 2,325,000 2,330,812
West Ottawa Pub. School Dist. Unltd. Tax
Gen. Oblig. (Cap. Appreciation) 0%
5/1/06 (MBIA Insured)
(Pre-Refunded to 5/1/05 @95.91) (d) Aaa 4,110,000 2,686,912
Western Michigan Univ. Rev.:
Rfdg. 6.50% 7/15/21 (AMBAC Insured)
(Pre-Refunded to 7/15/01 @102) (d) Aaa 2,500,000 2,734,374
1.67% 7/15/17 (FGIC Insured) (f) Aaa 2,500,000 2,259,374
Western Townships Util. Auth. Swr. Disp. Sys.
Ltd. Tax 8.20% 1/1/18 BBB+ 2,500,000 2,665,625
396,900,982
PUERTO RICO - 1.3%
Puerto Rico Commonwealth Pub. Impt. Rfdg.
5.50% 7/1/99 Baa1 2,500,000 2,553,125
Puerto Rico Commonwealth Urban Renewal &
Hsg. Corp. Rfdg. 7.875% 10/1/04 Baa 2,800,000 3,027,500
5,580,625
TOTAL MUNICIPAL BONDS
(Cost $401,071,869) 402,481,607
MUNICIPAL NOTES (A) - 9.7%
MICHIGAN - 9.7%
Dearborn Econ. Dev. Corp. Ltd. Oblig. Rev.
(Oakbrook Common Proj.) Series 91, 4.15%,
LOC Mellon Bank, N.A., VRDN A-1 2,900,000 2,900,000
Delta County Econ. Dev. Corp. Envir. Impt. Rev.
(Mead Escanaba Paper Co. Proj.) VRDN:
Series 1985 D, 4.05%,
LOC Credit Suisse First Boston (BK) P-1 900,000 900,000
Series 1985 F, 4.05%
LOC Bank of Nova Scotia P-1 1,400,000 1,400,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Detroit Wtr. Supply Sys. Rev. Participating VRDN,
Series SG-6, 4.30% (MBIA Insured)
(Liquidity Facility Societe Generale, France) (g) A-1+ $ 2,570,000 $
2,570,000
Michigan Higher Ed. Student Ln. Auth. Rev.
Series XII-F, 4.25% (BPA Kredietbank, NV)
(AMBAC Insured) VRDN VMIG 1 2,200,000 2,200,000
Michigan Hosp. Fin. Auth. Rev., VRDN:
Rfdg. (Mt. Clemens Gen. Hosp.) Series 1994,
4.15%, LOC Comerica Bank - Detroit VMIG 1 1,500,000 1,500,000
(Hosp. Equip. Loan Prog.) Series A, 4.30%,
LOC First of America Bank - Michigan VMIG 1 300,000 300,000
(St. Mary's Hosp. of Livonia) Series 1996 A,
4.15%, LOC Comerica Bank - Detroit VMIG 1 1,000,000 1,000,000
Michigan Hsg. Dev. Auth. Rental Hsg. Rev. Rfdg.
(Multi-family Hsg.) Series 1997 B, 4.15%,
LOC Landesbank Hessen-Thuringen, VRDN VMIG 1 3,500,000 3,500,000
Michigan Hsg. Dev. Auth. Single Family Mtg.
Participating VRDN, Series PT-19, 4.40%
(Liquidity Facility Credit Suisse First Boston (BK))
(b) (g) A-1+ 680,000 680,000
Michigan Muni Bond Auth. RAN Series 1996-A,
4.50% 7/3/97 SP-1+ 1,120,000 1,120,033
Michigan Strategic Fund Ltd. Oblig. Rev., VRDN:
Rfdg. (Peachwood Ctr. Associates) Series 1995,
4.15%, LOC NBD Bank NA A-1+ 1,500,000 1,500,000
(Dow Chemical Co. Proj.) Series 1992,
4.25% P-1 2,000,000 2,000,000
(Orbital Fluid Technologies, Inc. Proj.)
Series 1996, 4.30%,
LOC Comerica Bank - Detroit (b) A-1+ 1,000,000 1,000,000
Michigan Strategic Fund Poll. Cont. Rev., VRDN:
Rfdg. (Consumers Pwr. Co. Proj.) Series 1988 A,
4.05%, LOC Union Bank of Switzerland P-1 6,700,000 6,700,000
(Gen. Motors Corp. Composite) 4.20% VMIG 2 2,900,000 2,900,000
Michigan Strategic Fund Solid Waste Disp. Rev.
(Grayling Gen. Station Proj.) Series 1990, 4.25%,
LOC Barclays Bank PLC, VRDN (b) VMIG 1 2,300,000 2,300,000
Michigan Trunk Line Participating VRDN, Series
SG-87, 4.35%
(Liquidity Societe Generale, France) (g) - 1,000,000 1,000,000
Midland County Econ. Dev. Corp. Econ. Dev. Ltd.
Oblig. Rev. (Dow Chemical Co. Proj.)
Series 1993 A, 4.10%, VRDN (b) P-1 1,200,000 1,200,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Monroe County Econ. Dev. Corp. Rev. Rfdg.
(Detroit Edison) Series 1992 CC, 4.25%
LOC Barclays Bank PLC, VRDN P-1 $ 300,000 $ 300,000
Univ. of Michigan Regents Hosp. Rev.
Series 1992 A, 4.05%, VRDN VMIG 1 3,400,000 3,400,000
Univ. of Michigan Regents Rev. (Intercollegiate
Athletic) 4.10%, VRDN VMIG 1 200,000 200,000
Univ. of Michigan Rev. (Medical Svc.)
Series 1995-A, 4.05%, VRDN VMIG 1 2,400,000 2,400,000
Wayne Charter County Arpt. Rev. Rfdg.
(Detroit Metro. Wayne County) Series 1996 A,
4.25%, LOC Bayerische Landesbank,
VRDN (b) VMIG 1 300,000 300,000
TOTAL MUNICIPAL NOTES
(Cost $43,270,033) 43,270,033
TOTAL INVESTMENTS - 100%
(Cost $444,341,902) $ 445,751,640
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
82 30-Year Treasury Bond Contracts Sept. 1997 $ 8,996,994 $ 110,131
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.0 %
SECURITY TYPE ABBREVIATIONS
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Security collateralized by an amount sufficient to pay interest and
principal.
5. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
6. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
7. Provides evidence of ownership in one or more underlying municipal
bonds.
The composition of long-term debt holdings
as a percentage of total value of investment in securities, is as follows
(ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 74.0% AAA, AA, A 84.0%
Baa 3.3% BBB 2.1%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.6% CC, C 0.0%
D 0.6%
The percentage not rated by both S&P and Moody's amounted to 0.7%. FMR has
determined that unrated debt securities that are lower quality account for
0.2% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Health Care 22.6%
General Obligation 18.4
Electric Revenue 11.8
Water and Sewer 9.6
Housing 8.2
Escrowed/Prerefunded 7.0
Industrial Development 5.5
Others (individually less than 5%) 16.9
TOTAL 100.0%
INCOME TAX INFORMATION
At June 30, 1997, the aggregate cost of investment securities for income
tax purposes was $444,341,902. Net appreciation aggregated $1,409,738, of
which $18,885,640 related to appreciated invest-
ment securities and $17,475,902 related to depreciated investment
securities.
At December 31, 1996, the fund had a capital loss carryforward of
approximately $676,169
which will expire on December 31, 2003.
At December 31, 1996, the fund was required to defer $2,475,010 of losses
on futures contracts.
SPARTAN MICHIGAN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $444,341,902) - $ 445,751,640
See accompanying schedule
Interest receivable 5,674,375
TOTAL ASSETS 451,426,015
LIABILITIES
Payable to custodian bank $ 157,187
Payable for investments purchased 3,913,425
Payable for fund shares redeemed 179,574
Distributions payable 278,892
Accrued management fee 125,985
Payable for daily variation on futures contracts 46,125
Other payables and accrued expenses 89,519
TOTAL LIABILITIES 4,790,707
NET ASSETS $ 446,635,308
Net Assets consist of:
Paid in capital $ 445,220,924
Accumulated undistributed net realized gain (loss) (105,485)
on investments
Net unrealized appreciation (depreciation) on 1,519,869
investments
NET ASSETS, for 39,364,453 shares outstanding $ 446,635,308
NET ASSET VALUE, offering price and redemption price per $11.35
share ($446,635,308 (divided by) 39,364,453 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INVESTMENT INCOME $ 12,400,913
Interest
EXPENSES
Management fee $ 871,559
Transfer agent, accounting and custodian fees and 380,774
expenses
Non-interested trustees' compensation 1,937
Registration fees 13,503
Audit 14,716
Legal 3,766
Miscellaneous 1,153
Total expenses before reductions 1,287,408
Expense reductions (38,293) 1,249,115
NET INVESTMENT INCOME 11,151,798
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,887,398
Futures contracts 173,205 3,060,603
Change in net unrealized appreciation (depreciation) on:
Investment securities (1,518,647)
Futures contracts 110,131 (1,408,516)
NET GAIN (LOSS) 1,652,087
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 12,803,885
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 11,151,798 $ 25,709,105
Net investment income
Net realized gain (loss) 3,060,603 1,831,360
Change in net unrealized appreciation (depreciation) (1,408,516) (12,978,543)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,803,885 14,561,922
FROM OPERATIONS
Distributions to shareholders (11,151,798) (25,709,105)
From net interest income
In excess of net interest income - (80,276)
TOTAL DISTRIBUTIONS (11,151,798) (25,789,381)
Share transactions 30,255,050 57,025,517
Net proceeds from sales of shares
Reinvestment of distributions 8,252,343 19,641,907
Cost of shares redeemed (49,253,410) (101,584,850)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (10,746,017) (24,917,426)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (9,093,930) (36,144,885)
NET ASSETS
Beginning of period 455,729,238 491,874,123
End of period $ 446,635,308 $ 455,729,238
OTHER INFORMATION
Shares
Sold 2,691,313 5,052,266
Issued in reinvestment of distributions 733,816 1,742,412
Redeemed (4,383,687) (9,019,787)
Net increase (decrease) (958,558) (2,225,109)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 D 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 11.300 $ 11.560 $ 10.580 $ 12.340 $ 11.710 $ 11.410
of period
Income from Investment .279 .630 E .611 .687 .709 .733
Operations
Net interest income
Net realized and unrealized .050 (.258) .980 (1.590) .870 .320
gain (loss)
Total from investment .329 .372 1.591 (.903) 1.579 1.053
operations
Less Distributions
From net interest income (.279) (.630) (.611) (.687) (.709) (.733)
In excess of net - (.002) - - - -
interest income F
From net realized gain - - - (.080) (.240) (.020)
In excess of net realized - - - (.090) - -
gain
Total distributions (.279) (.632) (.611) (.857) (.949) (.753)
Net asset value, end of period $ 11.350 $ 11.300 $ 11.560 $ 10.580 $ 12.340 $ 11.710
TOTAL RETURN B 2.96% 3.38% 15.41% (7.50) 13.83% 9.54%
%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 446,635 $ 455,729 $ 491,874 $ 433,694 $ 563,492 $ 463,816
(000 omitted)
Ratio of expenses to average .57% A, .59% .59% .57% .59% .61%
net assets after expense C
reductions
Ratio of net interest income to 5.04% A 5.52% 5.49% 6.04% 5.79% 6.36%
average net assets
Portfolio turnover rate 14% A 29% 29% 18% 33% 15%
</TABLE>
1. ANNUALIZED
2. TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
3. FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
4. EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
5. NET INTEREST INCOME PER SHARE REFLECTS A PAYMENT OF APPROXIMATELY $.049
RECEIVED FROM AN ISSUER THAT IS IN BANKRUPTCY.
6. THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in value of an
investment, assuming reinvestment of the fund's dividend income and capital
gains (the profits earned upon the sale of securities that have grown in
value). Yield measures the income paid by a fund. Since a money market fund
tries to maintain a $1 share price, yield is an important measure of
performance. If Fidelity had not reimbursed the fund for certain expenses,
the past five years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Fidelity Michigan Municipal 1.54% 3.06% 14.26% 27.98%
Money Market Fund
All Tax-Free Money Market Funds Average 1.53% 3.04% 14.13% 26.56%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on January 12, 1990. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the all tax-free money market
funds average, which reflects the performance of all tax-free money market
funds with similar objectives tracked by IBC Financial Data, Inc. The past
six months average represents a peer group of 430 mutual funds. (The
periods covered by the IBC Financial Data, Inc. numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity Michigan Municipal 3.06% 2.70% 3.36%
Money Market Fund
All Tax-Free Money Market Funds Average 3.04% 2.68% 3.23%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the
fund had performed at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
6/30/97 3/31/97 12/30/96 9/30/96 7/1/96
Fidelity Michigan Municipal 3.54% 2.89% 3.38% 3.18% 2.91%
Money Market Fund
All Tax-Free Money Market 3.48% 2.93% 3.32% 3.18% 2.89%
Funds Average
Fidelity Michigan Municipal 5.79% 4.72% 5.52% 5.20% 4.76%
Money Market Fund
Tax-equivalent
</TABLE>
Row: 1, Col: 1, Value: 3.54
Row: 1, Col: 2, Value: 3.48
Row: 2, Col: 1, Value: 2.89
Row: 2, Col: 2, Value: 2.93
Row: 3, Col: 1, Value: 3.38
Row: 3, Col: 2, Value: 3.32
Row: 4, Col: 1, Value: 3.18
Row: 4, Col: 2, Value: 3.18
Row: 5, Col: 1, Value: 2.91
Row: 5, Col: 2, Value: 2.89
5% -
4% -
3% -
2% -
1% -
0%
Fidelity Michigan
Municipal Money
Market Fund
All Tax-Free Money
Market Funds
Average
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the all tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1997 federal
and state income tax rate of 38.82%. A portion of the fund's income may be
subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. government neither
insures nor guarantees a
money market fund. And there
is no assurance that a money
fund will maintain a $1 share
price.
(checkmark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Diane McLaughlin became Portfolio Manager of Fidelity
Michigan Municipal Money Market Fund on July 1, 1997, after the period
ended.
Q. DIANE, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS?
A. While the Federal Reserve Board in mid-1996 had stated its bias toward
raising short-term interest rates to dampen economic growth and head off
inflation, it had not acted by early 1997 and the market became complacent
with steady Fed policy. That sentiment changed in late February, however,
after Fed Chairman Alan Greenspan's Humphrey-Hawkins testimony before
Congress. Greenspan outlined his concerns that low unemployment might exert
upward pressure on the economy's core inflation. More importantly, he
mentioned the possibility that the Fed might raise the rate banks charge
each other for overnight loans - known as the fed funds target rate - from
the 5.25% level it had maintained since January 1996. The rationale behind
such a move would be to raise rates to curb inflation before it passed
through to the consumer. Shortly after Greenspan's remarks, data for
February showed an additional 293,000 non-farm jobs had been added to the
economy, lowering unemployment to 5.3%. Interest rates rose as the Fed's
March 25 Open Market Committee meeting approached and fears heightened that
there would be a shift in Fed policy. At that meeting, the Fed raised the
fed funds target rate by 0.25% to 5.50% as expected.
Q. HOW HAS THE ECONOMY PERFORMED SINCE THE FED'S MARCH MEETING?
A. First quarter 1997 data indicated continued economic strength, with
gross domestic product growing at a stronger-than-expected annual rate of
nearly 6%. In addition, in April unemployment fell to 4.9%, the lowest
level since 1973. Since then, economic data has shown signs of a slowdown
during the second quarter. Perhaps more importantly, inflation continues to
remain in check. In fact, in the first half of the year there were six
consecutive monthly drops in the producer price index, and the first half
of the year's consumer price index was the lowest in 10 years.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. Early in the period, the fund's maturity was at 47 days. As strong
first-quarter economic data was released, however, the fund's maturity
rolled down in anticipation of higher rates. The maturity reached a low of
19 days in early May, and ended the period at 24 days. Despite the lack of
an increase in rates by the Fed, the fund didn't give up yield by having a
shorter maturity. In fact, the fund actually picked up yield by having a
larger percentage invested in variable-rate demand notes (VRDNs) -
variable-rate securities that can be redeemed on short notice, typically
one or seven days. Year-to-date, these VRDNs have been priced at
historically attractive levels relative to the targeted fed funds rate.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 1997, was 3.54%, compared to
3.39% six months ago. The latest yield was the equivalent of a taxable
yield of 5.79% for Michigan investors in the 38.82% combined federal and
state tax bracket. The fund's total return during the six-month period was
1.54%. That beat the total return of 1.53% for the all tax-free money
market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The Fed may not need to raise short-term rates further if the pace of
economic growth persists without any significant signs of inflation. The
fund plans to purchase one-year paper during the municipal market's annual
note borrowing season. The rates offered by these securities typically
increase as most borrowers issue notes at the same time, causing a
temporary imbalance between supply and demand. The fund will, however,
attempt to keep its maturity relatively neutral. This position will allow
me to extend the fund's average maturity with higher-yielding notes, if a
pick-up in
economic growth in the third and fourth quarters leads to price increases
and further action by the Fed.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income while maintaining
a stable $1 share price by
investing in high-quality,
short-term municipal money
market securities
TRADING SYMBOL: FMIXX
FUND NUMBER: 420
START DATE: January 12, 1990
SIZE: as of June 30, 1997,
more than $264 million
MANAGER: Diane
McLaughlin, since July 1997;
manager, various Fidelity
and Spartan municipal
money market funds; joined
Fidelity in 1992
(checkmark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
6/30/97 12/31/96 6/30/96
0 - 30 79 69 69
31 - 90 12 11 14
91 - 180 8 9 11
181 - 397 1 11 6
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/96 6/30/96
Michigan Municipal
Money Market Fund 24 days 47 days 46 days
All Tax-Free Money Market
Funds Average* 44 days 51 days 50 days
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31, 1996
Row: 1, Col: 1, Value: 69.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 14.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 66.0
Row: 1, Col: 2, Value: 17.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 11.0
Row: 1, Col: 5, Value: 4.0
Variable rate
demand notes
(VRDNs) 70%
Commercial
paper (including
CP mode) 15%
Tender bonds 0%
Municipal
notes 14%
Other 1%
Variable rate
demand notes
(VRDNs) 68%
Commercial
paper (including
CP mode) 17%
Tender bonds 1%
Municipal
notes 11%
Other 3%
* SOURCE: IBC'S MONEY FUND REPORT (registered trademark)
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL SECURITIES (A) - 100.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 100.0%
Cornell Township Econ. Dev. Corp. Ind. Dev. Rev. Rfdg. Bonds
(Mead-Escana Paper Co. Proj.) Series 1990, 3.60%
8/12/97, LOC Credit Suisse First Boston (BK) CP mode $ 1,300,000 $
1,300,000
Delta County Econ. Dev. Corp. Envir. Impt. Rev.
(Mead-Escanaba Paper Co. Proj.) 4.15%,
LOC Union Bank of Switzerland, VRDN (b) 400,000 400,000
Detroit Downtown Dev. Auth. Rev. Rfdg. (Millender Ctr. Proj.)
Series 1988, 4.35%, LOC Sumitomo Bank Ltd., VRDN 1,000,000 1,000,000
Detroit School Dist. BAN 4.50% 5/1/98 3,600,000 3,617,424
Detroit Wtr. Supply Sys. Participating VRDN (c):
Series SG-6, 4.30% (Liquidity Facility Societe Generale, France)
(MBIA Insured) 3,000,000 3,000,000
Series SG-64, 4.35% (Liquidity Facility Societe Generale, France)
(MBIA Insured) 2,000,000 2,000,000
Detroit Wtr. & Swr. Disposal Rev. Bonds 6.75% 7/1/97 1,500,000 1,530,000
Flint Econ. Dev. Corp. Ltd. Oblig. Rev.
(Genessee County Real Estate Proj.) 4.20%,
LOC NBD Bank NA, VRDN (b) 1,000,000 1,000,000
Genesee County Econ Dev. Corp. Ltd. Oblig. Econ. Dev. Rev.
(Creative Foam Corp. Proj.) Series 1994, 4.20%,
LOC NBD Bank NA, VRDN (b) 3,000,000 3,000,000
Georgetown Charter Township Ind. Dev. Rev.
(J&F Steel Corp. Proj.) Series 1989, 4.30%,
LOC Societe Generale, France, VRDN (b) 1,000,000 1,000,000
Grand Rapids Econ. Dev. Corp. Ltd. Oblig. Rev.
(Holland Home Proj.) Series 1994 B, 4.20%,
LOC Old Kent Bank - Michigan, VRDN 2,250,000 2,250,000
Jackson County Econ. Dev. Corp. Rev.
(SPX Corp. Proj.) 3.85%,
LOC NBD Bank NA, VRDN 2,000,000 2,000,000
Kalamazoo Econ. Dev. Corp. Rev. Rfdg.
(La Quinta Motor Inns) Series 1991, 4.25%,
LOC NationsBank NA, VRDN 1,890,000 1,890,000
Livonia Econ. Dev. Corp., VRDN (b):
(Ajluni Proj.) 4.20%, LOC NBD Bank NA 2,000,000 2,000,000
(Foodland Distributors Corp.) 4.30%,
LOC Comerica Bank - Detroit 2,100,000 2,100,000
Melvindale Econ. Dev. Corp. Rev. (Des Jardins Ltd.)
Series 1990 A, 4.50%,
LOC Comerica Bank - Detroit, VRDN (b) 600,000 600,000
Michigan Bldg. Auth. Rev. Bonds Series 1, 3.90% 10/1/97 1,000,000
1,000,600
Michigan Gen. Oblig. TAN 4.50% 9/30/97 13,400,000 13,424,144
Michigan Higher Ed. Auth. Rev. (Davenport College of Bus.)
Series 1997, 4.20%, LOC Old Kent Bank - Michigan, VRDN 1,000,000
1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Higher Ed. Student Loan Auth. Rev., VRDN (b):
Rfdg. Series XII-B, 4.25% (AMBAC Insured)
(BPA Kredietbank, NV) $ 9,600,000 $ 9,600,000
Rfdg. Series XII-F, 4.25% (MBIA Insured)
(BPA Kredietbank, NV) 2,200,000 2,200,000
Series XII-D, 4.25% (AMBAC Insured)
(BPA Kredietbank, NV) 5,400,000 5,400,000
Michigan Hosp. Fin. Auth. REv., VRDN:
(Chelsea Commty. Hosp.) Series 1995, 4.15%,
LOC Comerica Bank - Detroit 1,000,000 1,000,000
(Hospital Equip. Loan Prog.):
Series 1995 A, 4.30%,
LOC First of America Bank - Michigan 700,000 700,000
Series A, 4.30%, LOC First of America Bank - Michigan 11,100,000
11,100,000
4.30%, LOC First of America Bank - Michigan 4,200,000 4,200,000
Michigan Hsg. Dev. Auth. Multi-Family Hsg. Rev. Bonds
Series 1988 A (b):
3.80% 8/7/97,
LOC Credit Suisse First Boston (BK) CP mode 2,135,000 2,135,000
3.75% 8/26/97,
LOC Credit Suisse First Boston (BK) CP mode 4,000,000 4,000,000
3.75% 8/27/97,
LOC Credit Suisse First Boston (BK) CP mode 2,000,000 2,000,000
Michigan Hsg. Dev. Auth. Participating VRDN (b) (c):
Series PT-19 4.40%
(Liquidity Facility Credit Suisse First Boston (BK)) 6,670,000 6,670,000
Series PT-38, 4.40%
(FSA Insured) (Liquidity Facility Commerzbank AG) 4,710,000 4,710,000
Series PT-58, 4.40%
(Liquidity Facility Credit Suisse First Boston (BK) 8,175,000 8,175,000
Michigan Hsg. Dev. Auth. Rental Rev., VRDN:
Series 1994 C, 4.35%,
LOC Credit Suisse First Boston (BK) 1,000,000 1,000,000
Series 1997 B, 4.15%,
LOC Landesbank Hessen-Thuringen 5,300,000 5,300,000
Michigan Muni. Bond Auth. RAN:
Series 1996 A, 4.50% 7/3/97 13,500,000 13,500,419
Series 1996 B, 4.50% 7/25/97 2,000,000 2,000,631
Series 1996 D, 4.50% 9/19/97 5,000,000 5,005,607
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Ind. Dev. Rev., VRDN:
(Althaus Family Investors II) Series 1997, 4.35%,
LOC Huntington Nat'l. Bank Columbus OH $ 2,800,000 $ 2,800,000
(Michigan Sugar Co.-Croswell Proj.) 4.20%,
LOC SunTrust Bank of Atlanta 2,500,000 2,500,000
Michigan Strategic Fund Ltd. Oblig. Rev., VRDN:
(C-Tec, Inc. Proj.) 4.30%, LOC SunTrust Bank of Atlanta (b) 1,500,000
1,500,000
(Detroit Edison) 4.25%, LOC Barclays Bank PLC 2,800,000 2,800,000
(Doss Ind. Dev. Co.) 4.20%,
LOC NBD Bank NA 3,800,000 3,800,000
(Envir. Quality Co. Proj.) Series 1995, 4.30%,
LOC Comerica Bank - Detroit 1,500,000 1,500,000
(Hi Tech Mold & Engineering) 4.20%,
LOC NBD Bank NA (b) 1,200,000 1,200,000
(Michigan Sugar Co.Caro Proj.) Series 1991,4.20%,
LOC SunTrust Bank of Atlanta 1,500,000 1,500,000
(Orbital Fluid Tech Proj.) Series 1996,
4.30%, LOC Comerica Bank - Detroit (b) 2,500,000 2,500,000
(PBL Enterprises, Inc.) Series 1997, 4.40%,
LOC Comerica Bank - Detroit (b) 3,500,000 3,500,000
(R.H. Wyner Proj.) Series 1996, 4.20%,
LOC State Street Bank & Trust Co. Boston 2,125,000 2,125,000
(TEI Investments, LLC Proj.) 4.30%,
LOC Comerica Bank - Detroit (b) 1,000,000 1,000,000
(The Spiratex Co. Proj.) Series 1994, 4.20%
LOC NBD Bank NA (b) 2,600,000 2,600,000
(Ultimate Hydroforming Inc. Proj.) 4.20%,
LOC NBD Bank NA (b) 800,000 800,000
(Uni Boring Co. Inc. Proj.) Series 1992, 4.20%
LOC NBD NA 1,800,000 1,800,000
(United Waste Sys. Proj.) Series 1995, 4.30%,
LOC Bank of America 4,300,000 4,300,000
Michigan Strategic Fund Poll. Cont. Rev., VRDN:
Rfdg. (Consumers Pwr. Co. Proj.) Series 1988 A, 4.05%,
LOC Union Bank of Switzerland 3,700,000 3,700,000
(General Motors Corp. Proj.) 4.20% 5,790,000 5,790,000
Michigan Strategic Fund Rev. Bonds
(Dow Chemical):
Series 1986:
3.55% 7/14/97, CP mode 2,000,000 2,000,000
, 3.80% 7/16/97, CP mode 2,000,000 2,000,000
3.65% 8/11/97, CP mode 2,000,000 2,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Michigan Strategic Fund Rev. Bonds - continued
(Dow Chemical): - continued
Series 1988 (b):
3.95% 7/18/97, CP mode $ 3,700,000 $ 3,700,000
4% 8/7/97, CP mode 2,000,000 2,000,000
3.85% 8/13/97, CP mode 3,000,000 3,000,000
3.90% 8/14/97, CP mode 3,000,000 3,000,000
3.70% 8/20/97, CP mode 4,700,000 4,700,000
3.80% 8/20/97, CP mode 3,000,000 3,000,000
Michigan Strategic Fund Solid Waste Disp. Rev., VRDN:
(Grayling Gen. Station Proj.) Series 1990, 4.25%,
LOC Barclays Bank Ltd. (b) 8,900,000 8,900,000
(Great Lakes Recovery) 4.25%,
LOC NBD Bank NA (b) 3,000,000 3,000,000
Michigan Trunk Line Participating VRDN (c):
Series SG-44, 4.35%
(Liquidity Facility Societe Generale, France) 5,830,000 5,830,000
Series SG-87, 4.35% (FGIC Insured)
(Liquidity Facility Societe Generale, France) 3,000,000 3,000,000
Mona Shores School Dist. Participating VRDN,
Series SG-26, 4.35%
(Liquidity Facility Societe Generale, France) (c) 8,175,000 8,175,000
Monroe Poll. Cont. Participating VRDN,
Series 97M, 4.40% (AMBAC Insured)
(Liquidity Facility Caisse Des Depots et Consignations) (b)(c) 3,515,000
3,515,000
Rochester Hills Econ. Dev. Corp. Ltd. Oblig. Rev.
(Cardell Corp.) 4.25%,
LOC Comerica Bank - Detroit, VRDN (b) 200,000 200,000
Sterling Heights Econ. Dev. Corp. Ltd. Oblig. Rev.
(Cherrywood Ctr. Assoc. Proj.) 4.30%,
LOC Comerica Bank - Detroit, VRDN (b) 4,700,000 4,700,000
Tolfree Memorial Hosp. Corp. Rev., VRDN:
Series 1996 B, 4.20%,
LOC First of America Bank - Michigan 3,500,000 3,500,000
Series 1997 D, 4.20%,
LOC First of America Bank - Michigan 1,600,000 1,600,000
Wayne County Arpt. Rev. Rfdg., VRDN (b):
Series 1996 A, 4.25%,
LOC Bayerische Landesbank Girozentrale 11,400,000 11,400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - CONTINUED
Wayne County Arpt. Rev. Rfdg., VRDN (b): - continued
Series 1996 B, 4.20%,
LOC Bayerische Landesbank Girozentrale $ 1,000,000 $ 1,000,000
Wayne County Downriver Swr. Disposal Sys. Bonds,
3.80% 10/9/97, LOC Comerica Bank - Detroit, CP mode 5,460,000 5,460,000
TOTAL INVESTMENTS - 100% $264,203,825
Total Cost for Income Tax Purposes $ 264,203,825
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At December 31, 1996, the fund had a capital loss carryforward of
approximately $96,800 of which $1,600, $1,700, $10,300, $39,100, $4,800 and
$39,300 will expire on December 31, 1998, 1999, 2001, 2002, 2003 and 2004,
respectively.
FIDELITY MICHIGAN MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 264,203,825
See accompanying schedule
Cash 2,145,268
Interest receivable 2,115,713
TOTAL ASSETS 268,464,806
LIABILITIES
Payable for investments purchased $ 3,617,424
Distributions payable 23,248
Accrued management fee 86,137
Other payables and accrued expenses 61,551
TOTAL LIABILITIES 3,788,360
NET ASSETS $ 264,676,446
Net Assets consist of:
Paid in capital $ 264,781,678
Accumulated net realized gain (loss) on investments (105,232)
NET ASSETS, for 264,781,678 shares outstanding $ 264,676,446
NET ASSET VALUE, offering price and redemption price per $1.00
share ($264,676,446 (divided by) 264,781,678 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTEREST INCOME $ 4,760,359
EXPENSES
Management fee $ 506,450
Transfer agent, accounting and custodian fees and 251,959
expenses
Non-interested trustees' compensation 841
Registration fees 20,085
Audit 18,881
Legal 3,362
Miscellaneous 1,913
Total expenses before reductions 803,491
Expense reductions (1,932) 801,559
NET INTEREST INCOME 3,958,800
NET REALIZED GAIN (LOSS) ON INVESTMENTS (8,446)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,950,354
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ 3,958,800 $ 6,967,085
Net interest income
Net realized gain (loss) (8,446) (39,267)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,950,354 6,927,818
FROM OPERATIONS
Distributions to shareholders from net interest income (3,958,800) (6,967,085)
Share transactions at net asset value of $1.00 per 295,793,367 498,526,631
share
Proceeds from sales of shares
Reinvestment of distributions from net interest 3,778,067 6,658,005
income
Cost of shares redeemed (295,478,200) (475,812,666)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 4,093,234 29,371,970
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,084,788 29,332,703
NET ASSETS
Beginning of period 260,591,658 231,258,955
End of period $ 264,676,446 $ 260,591,658
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from Investment .015 .030 .033 .024 .020 .026
Operations
Net interest income
Less Distributions
From net interest (.015) (.030) (.033) (.024) (.020) (.026)
income
Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
TOTAL RETURN B 1.54% 3.00% 3.38% 2.44% 1.98% 2.66%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 264,676 $ 260,592 $ 231,259 $ 221,735 $ 175,190 $ 160,817
(000 omitted)
Ratio of expenses to .63% A .62% .63% .61% .62% .49%
average net assets C
Ratio of expenses to .62% A .61% .63% .61% .62% .49%
average net assets ,D D
after expense
reductions
Ratio of net interest 3.08% A 2.96% 3.32% 2.45% 1.96% 2.64%
income to average
net assets
</TABLE>
1. ANNUALIZED
2. TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
3. FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
4. FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1997 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Michigan Municipal Income Fund(the income fund) (formerly Fidelity
Michigan Municipal Income fund) is a fund of Fidelity Municipal Trust.
Fidelity Michigan Money Market Fund (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 financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the money market fund and the income fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for which
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, market discount and losses deferred due to
futures and options.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse in a subsequent period. Distributions in excess of net
investment income may include temporary book and tax basis differences that
will reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS. The income fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value of any open futures contracts at period end
is shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the underlying
instrument at period end. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Gains and losses are realized upon the expiration or closing of the
futures contracts. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they are
traded.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND Purchases and sales of securities, other than short-term
securities, aggregated $28,504,821 and $62,450,908, respectively.
The market value of futures contracts opened and closed during the period
amounted to $17,704,751 and $8,880,962, 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 and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. The annual individual fund fee rate is .25%. In the
event that these rates were lower than the contractual rates in effect
during the period, FMR voluntarily implemented the above rates, as they
resulted in the same or a lower management fee. For the period, the
management fees were equivalent to annualized rates of .39% and .40%,
respectively of average net assets for the income and money market funds,
respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the funds. UMB has entered
into a sub-contract with Fidelity Service Company, Inc. (FSC), an affiliate
of FMR, under which FSC performs the activities associated with the funds'
transfer and shareholder servicing agent and accounting functions. The
funds pay account fees and asset-based fees that vary according to account
size and type of account. FSC pays for typesetting, printing and mailing of
all shareholder reports, except proxy statements. The accounting fee is
based on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $275,438 and $92,237 for the income fund and $215,671 and
$28,620 for the money market fund, respectively.
For the period, the transfer agent fees were equivalent to an annualized
rate of .13% and .17% of average net assets for the income fund and the
money market fund, respectively.
Shareholders participating in the Fidelity Ultra Service Account(registered
trademark) Program (the Program) pay a $5.00 monthly fee to Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, for performing
services associated with the Program. For the period, fees paid to FBSI by
shareholders participating in the Program amounted to $4,390.
5. EXPENSE REDUCTIONS.
Effective April 1, 1997, FMR voluntarily agreed to reimburse operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of .55% of the income fund's
average net assets. For the period, the reimbursement reduced expenses by
$36,313.
5. EXPENSE REDUCTIONS - CONTINUED
In addition, each fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During the
period, the custodian and transfer agent fees were reduced by $1,079 and
$901, respectively, for the income fund and $0 and $1,932, respectively,
for the money market fund, under these arrangements.
PROXY VOTING RESULTS
A special meeting of the Fidelity Michigan Municipal Money Market Fund
shareholders was held on July 16, 1997. The results of votes taken among
shareholders on proposals are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 444,689,929.498 96.136
Withheld 17,871,441.790 3.864
TOTAL 462,561,371.288 100.000
RALPH F. COX
Affirmative 443,768,598.498 95.937
Withheld 18,792,772.790 4.063
TOTAL 462,561,371.288 100.000
PHYLLIS BURKE DAVIS
Affirmative 443,103,899.148 95.794
Withheld 19,457,472.140 4.206
TOTAL 462,561,371.288 100.000
ROBERT M. GATES
Affirmative 443,950,387.378 95.977
Withheld 18,610,983.910 4.023
TOTAL 462,561,371.288 100.000
EDWARD C. JOHNSON 3RD
Affirmative 444,259,190.958 96.043
Withheld 18,302,180.330 3.957
TOTAL 462,561,371.288 100.000
E. BRADLEY JONES
Affirmative 442,923,945.528 95.755
Withheld 19,637,425.760 4.245
TOTAL 462,561,371.288 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 444,464,359.398 96.088
Withheld 18,097,011.890 3.912
TOTAL 462,561,371.288 100.000
PETER S. LYNCH
Affirmative 444,937,445.098 96.190
Withheld 17,623,926.190 3.810
TOTAL 462,561,371.288 100.000
WILLIAM O. MCCOY
Affirmative 444,154,888.538 96.021
Withheld 18,406,482.750 3.979
TOTAL 462,561,371.288 100.000
GERALD C. MCDONOUGH
Affirmative 443,149,018.198 95.803
Withheld 19,412,353.090 4.197
TOTAL 462,561,371.288 100.000
MARVIN L. MANN
Affirmative 444,770,167.908 96.154
Withheld 17,791,203.380 3.846
TOTAL 462,561,371.288 100.000
THOMAS R. WILLIAMS
Affirmative 444,019,634.298 95.992
Withheld 18,541,736.990 4.008
TOTAL 462,561,371.288 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 435,395,650.683 94.127
Against 13,012,889.495 2.813
Abstain 14,152,831.110 3.060
TOTAL 462,561,371.288 100.000
PROPOSAL 3
To amend the Trust Instrument to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the number
of shares owned.
# OF TRUST % OF TRUST
SHARES VOTED SHARES VOTED
Affirmative 409,553,827.698 88.540
Against 31,050,994.330 6.713
Abstain 21,856,323.260 4.725
Not Voted 100,226.000 .022
TOTAL 462,561,371.288 100.000
# OF FUND % OF FUND
SHARES VOTED SHARES VOTED
Affirmative 123,195,674.730 87.113
Against 11,069,853.055 7.827
Abstain 7,155,455.420 5.060
TOTAL 141,420,983.205 100.000
PROPOSAL 4
To approve an amended management contract for the fund that would reduce
the management fee payable to FMR by the fund as FMR's assets under
management increase.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 118,860,493.150 84.047
Against 11,375,896.885 8.044
Abstain 11,184,593.170 7.909
TOTAL 141,420,983.205 100.000
PROPOSAL 5
Senior Securities - To add the ability to issue senior securities to the
extent permitted under the Investment Company Act of 1940 Act.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 114,718,335.680 81.118
Against 13,791,069.795 9.752
Abstain 12,911,577.730 9.130
TOTAL 141,420,983.205 100.000
PROPOSAL 6
Borrowing - To amend the borrowing limitation to require a reduction in
borrowing if borrowings exceed the 33 1/3% limit for any reason rather than
solely because of a decline in net assets.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 115,044,543.180 81.349
Against 14,002,096.055 9.901
Abstain 12,374,343.970 8.750
TOTAL 141,420,983.205 100.000
PROPOSAL 7
Concentration - To standardize language and explicitly exclude "tax-exempt
obligations issued or guaranteed by a U.S. territory or possession or a
state or local government, or a political subdivision thereof" from the
limitation on industry concentration.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 117,166,083.345 82.849
Against 13,470,024.720 9.525
Abstain 10,784,875.140 7.626
TOTAL 141,420,983.205 100.000
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President, FIXED INCOME FUNDS
Boyce Greer, Vice President, MONEY
MARKET FUNDS
David L. Murphy, Vice President -
INCOME FUND
Diane M. McLaughlin, Vice President - MONEY MARKET FUND
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account 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 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE
SPARTAN(registered trademark)
(registered trademark)
OHIO MUNICIPAL INCOME
FUND
(FORMERLY FIDELITY OHIO MUNICIPAL INCOME FUND)
AND
FIDELITY
OHIO MUNICIPAL MONEY MARKET
FUND
SEMIANNUAL REPORT
JUNE 30, 1997
CONTENTS
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PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN OHIO MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
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 past six
months
and one year.
INVESTMENTS 31 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 39 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 43 Notes to the financial statements.
PROXY VOTING RESULTS 46
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To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Through the first six months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them periodically. The
stock market rebounded strongly from its early spring correction to
continue on its record-setting pace, as seen by the roughly 20%
year-to-date gain by the Standard & Poor's 500 Index. The bond market
posted moderate returns over the first half of the year, as positive news
on the inflation front helped soften the effects of a hike in short-term
interest rates by the Federal Reserve Board in late March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
SPARTAN OHIO MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits the fund earned
upon the sale of securities that have grown in value). You can also look at
the fund's income, as reflected in the fund's yield, to measure
performance. If Fidelity had not reimbursed certain fund expenses total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTH YEAR YEARS YEARS
S
Spartan Ohio Municipal Income Fund 2.82% 8.04% 38.37% 116.19%
Lehman Brothers Ohio 4 Plus Year 3.06% 8.13% n/a n/a
Municipal Bond Index
Ohio Municipal Debt Funds Average 2.67% 7.50% 36.98% 109.94%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to the performance of the Lehman
Brothers Ohio 4 Plus Year Municipal Bond Index - a total return performance
benchmark for Ohio investment-grade municipal bonds with maturities of at
least four years. To measure how the fund's performance stacked up against
its peers, you can compare it to the Ohio municipal debt funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months average
represents a peer group of 52 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Spartan Ohio Municipal Income Fund 8.04% 6.71% 8.01%
Lehman Brothers Ohio 4 Plus Year 8.13% n/a n/a
Municipal Bond Index
Ohio Municipal Debt Funds Average 7.50% 6.49% 7.68%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each funds total return, then taking the arithmetic average. This may
produce a slightly different figure then that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
1987/06/30 10000.00 10000.00
1987/07/31 10146.32 10102.00
1987/08/31 10156.60 10124.73
1987/09/30 9625.84 9751.43
1987/10/31 9637.82 9785.95
1987/11/30 9899.16 10041.46
1987/12/31 10081.60 10187.16
1988/01/31 10546.68 10550.03
1988/02/29 10687.36 10661.54
1988/03/31 10410.16 10537.87
1988/04/30 10461.46 10617.96
1988/05/31 10534.28 10587.27
1988/06/30 10731.89 10742.16
1988/07/31 10826.55 10812.20
1988/08/31 10848.68 10821.72
1988/09/30 11050.33 11017.59
1988/10/31 11285.10 11211.50
1988/11/30 11199.85 11108.80
1988/12/31 11384.96 11222.45
1989/01/31 11549.00 11454.53
1989/02/28 11451.43 11323.83
1989/03/31 11452.53 11296.77
1989/04/30 11761.89 11564.95
1989/05/31 12017.71 11805.16
1989/06/30 12174.46 11965.47
1989/07/31 12275.09 12128.32
1989/08/31 12148.63 12009.58
1989/09/30 12091.16 11973.79
1989/10/31 12247.17 12120.23
1989/11/30 12423.86 12332.34
1989/12/31 12521.84 12433.22
1990/01/31 12404.34 12374.41
1990/02/28 12544.65 12484.54
1990/03/31 12558.92 12488.29
1990/04/30 12368.01 12397.87
1990/05/31 12688.42 12668.52
1990/06/30 12819.39 12779.87
1990/07/31 13012.11 12967.74
1990/08/31 12807.45 12779.44
1990/09/30 12905.28 12786.73
1990/10/31 13089.30 13018.68
1990/11/30 13396.71 13280.49
1990/12/31 13460.86 13338.26
1991/01/31 13610.12 13517.26
1991/02/28 13695.89 13634.86
1991/03/31 13720.99 13639.76
1991/04/30 13935.03 13821.17
1991/05/31 14049.07 13944.04
1991/06/30 13998.51 13930.24
1991/07/31 14191.31 14099.91
1991/08/31 14333.25 14285.60
1991/09/30 14502.81 14471.60
1991/10/31 14633.46 14601.85
1991/11/30 14658.91 14642.59
1991/12/31 15001.59 14956.82
1992/01/31 15028.25 14990.92
1992/02/29 15037.98 14995.71
1992/03/31 15026.88 15001.26
1992/04/30 15147.80 15134.77
1992/05/31 15352.91 15312.91
1992/06/30 15623.73 15569.86
1992/07/31 16074.92 16036.65
1992/08/31 15895.59 15880.29
1992/09/30 15990.00 15984.15
1992/10/31 15698.99 15827.02
1992/11/30 16117.30 16110.48
1992/12/31 16301.24 16274.97
1993/01/31 16514.22 16464.25
1993/02/28 17102.50 17059.76
1993/03/31 16902.73 16879.44
1993/04/30 17057.80 17049.75
1993/05/31 17143.67 17145.57
1993/06/30 17428.82 17431.73
1993/07/31 17454.68 17454.57
1993/08/31 17860.98 17817.97
1993/09/30 18074.67 18020.92
1993/10/31 18086.55 18055.70
1993/11/30 17932.75 17896.63
1993/12/31 18348.46 18274.43
1994/01/31 18571.48 18483.12
1994/02/28 18078.46 18004.41
1994/03/31 17313.53 17271.27
1994/04/30 17445.53 17417.73
1994/05/31 17564.01 17568.74
1994/06/30 17537.19 17461.40
1994/07/31 17814.41 17781.46
1994/08/31 17870.90 17842.99
1994/09/30 17653.20 17581.05
1994/10/31 17309.83 17268.81
1994/11/30 16929.67 16956.59
1994/12/31 17330.73 17329.81
1995/01/31 17850.78 17825.09
1995/02/28 18346.30 18343.45
1995/03/31 18535.96 18554.21
1995/04/30 18574.42 18576.11
1995/05/31 19120.29 19168.87
1995/06/30 18954.78 19002.10
1995/07/31 19059.42 19182.24
1995/08/31 19282.17 19425.47
1995/09/30 19434.22 19548.43
1995/10/31 19692.83 19832.67
1995/11/30 19999.37 20161.69
1995/12/31 20171.83 20355.45
1996/01/31 20325.57 20509.13
1996/02/29 20192.37 20370.69
1996/03/31 19905.85 20110.36
1996/04/30 19828.12 20053.44
1996/05/31 19805.29 20045.42
1996/06/30 20009.85 20263.72
1996/07/31 20182.66 20448.12
1996/08/31 20179.38 20443.21
1996/09/30 20497.51 20729.41
1996/10/31 20746.47 20963.86
1996/11/30 21138.13 21347.50
1996/12/31 21024.92 21257.84
1997/01/31 21075.38 21298.02
1997/02/28 21246.62 21493.54
1997/03/31 20945.13 21207.03
1997/04/30 21087.49 21384.53
1997/05/31 21382.27 21706.15
1997/06/30 21618.72 21937.32
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Spartan Ohio Municipal Income Fund on June 30, 1987. As the chart shows,
by June 30, 1997, the value of the investment would have grown to $21,619 a
116.19% increase on the initial investment. For comparison, look at how the
Lehman Brothers Municipal Bond Index - a total return performance benchmark
for investment-grade municipal bonds with maturities of at least one year -
did over the same period. With dividends reinvested, the same $10,000 would
have grown to $21,937 - a 119.37% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday
is no guarantee of how it
will do tomorrow. Bond
prices, for example,
generally move in the
opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30,
1997 1996 1995 1994 1993 1992
Dividend returns 2.47% 4.98% 6.22% 5.37% 6.19% 6.63%
Capital 0.35% -0.75% 10.17% -10.92% 6.37% 2.03%
appreciation
returns
Total returns 2.82% 4.23% 16.39% -5.55% 12.56% 8.66%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested, if any.
DIVIDENDS AND YIELD
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PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.55(cents) 27.68(cents) 55.98(cents)
Annualized dividend rate 4.83% 4.92% 4.93%
30-day annualized yield 4.68% - -
30-day annualized tax-equivalent yield 7.86% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.45 over
the past one month, $11.35 over the past six months and $11.35 over the
past one year, you can compare the fund's income over these three periods.
The 30-day annualized YIELD is a standard formula for all funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 40.48% combined effective 1997 federal and state tax bracket, but
does not reflect the payment of the federal alternative minimum tax, if
applicable. If Fidelity had not reimbursed certain fund expenses during the
period shown, the yield and tax-equivalent yield would have been 4.65% and
7.81%.
SPARTAN OHIO MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: George Fischer became Portfolio Manager of Spartan
Ohio Municipal Income Fund on April 1, 1997.
Q. GEORGE, HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS?
A. For the six months that ended June 30, 1997, the fund had a total return
of 2.82%. To get a sense of how the fund did relative to its peers, the
Ohio municipal debt funds average returned 2.67% for the same period,
according to Lipper Analytical Services. The Lehman Brothers Ohio 4 Plus
Year Municipal Bond Index, which tracks the types of securities in which
the fund invests, had a six-month return of 3.06%. For the year ended June
30, 1997, the fund returned 8.04%, while the Ohio municipal debt funds
average returned 7.50%, again according to Lipper. For the same one-year
period, the Lehman Brothers index returned 8.13%.
Q. HOW WOULD YOU CHARACTERIZE THE MUNICIPAL BOND MARKET OVER THE PAST SIX
MONTHS?
A. Although I'd characterize it as a somewhat choppy period for all bonds,
municipal bonds fared better than U.S. Treasury securities. Evidence that
the economy was growing at a much-quicker-than-expected pace sent Treasury
bond yields higher and, correspondingly, their prices lower during much of
the period. On the other hand, yields on municipal securities didn't react
as negatively, and muni bond prices were more stable throughout the period.
The divergence between Treasuries and municipals was greatest in the
long-maturity end of the market. As an example, the yield on a 30-year
Treasury yield rose 0.15%, while the yield on a 30-year Aaa-rated muni fell
0.15%. In the short-maturity end of the market, the yield on a five-year
Treasury rose 0.20%, while the yield on a five-year Aaa-rated muni rose
only 0.10%. Municipal prices were supported by an environment where there
was a limited supply of municipals available, while demand for them grew.
Q. HOW WAS THE FUND STRUCTURED DURING THE PAST SIX MONTHS?
A. In terms of maturity, the fund was heavily weighted in bonds with
maturities of between 10 and 15 years. There were a couple of reasons why I
continued to emphasize these intermediate-maturity bonds. First, the yield
these bonds generated tended to be higher than the yield generated by
owning a combination of long- and short-maturity bonds. What's more,
long-term bonds tend to be callable, which means they can be redeemed by
their issuer before maturity. Callable bonds tend to rise less in up
markets and fall more in down markets. Intermediate-maturity bonds, on the
other hand, typically aren't susceptible to being called.
Q. HAVE YOU MADE ANY SIGNIFICANT CHANGES SINCE TAKING OVER THE FUND?
A. No I haven't, and the basic strategy of the fund remained intact. I
continued to keep the fund's duration - which measures how sensitive it is
to changes in interest rates - in line with the Ohio municipal market as a
whole, as reflected by the fund's benchmark index. By maintaining a fairly
consistent duration, I hope to deliver better-than-market returns by
avoiding whipsaws when the market goes through its ups and downs.
Q. WERE THERE ANY CHANGES IN THE WAY THE FUND'S HOLDINGS WERE ALLOCATED
AMONG SECTORS DURING THE PERIOD?
A. Not really. General obligation bonds (GOs) remained the fund's largest
sector concentration. A GO is backed by the full faith and credit - which
includes the taxing power - of a city, county, state or other issuer. A GO
is repaid with general revenue such as taxes. General revenues are
dependent on both the economy and a municipality's fiscal health, both of
which were strong during the period in many of the areas the fund
emphasized. In choosing GOs, I put an emphasis on staying diversified and
not taking on very large positions in any one security.
Q. OF THE TOTAL AMOUNT OF NEW MUNICIPAL BONDS ISSUED IN OHIO OVER THE PAST
YEAR, ROUGHLY HALF WAS INSURED. WHAT CHALLENGES DID THAT PRESENT TO YOU AS
A PORTFOLIO MANAGER?
A. It made it increasingly more difficult to find relatively
higher-yielding bonds. Because of the limited number of opportunities to
pick up yield through an analysis of credit quality, I focused on
exploiting opportunities that arose due to a bond's structure. For example,
I'd analyze a bond's call feature, which determines whether it can be
redeemed by its issuer before maturity. Depending on their price and their
potential for appreciation, I would overweight non-callable bonds, which
can't be redeemed by their issuer before maturity, when I thought the
market would reward me for doing so. I also looked for opportunities that
arose when bonds were selling at prices cheaper than I believed to be their
fair value based on their coupon, maturity or other factors.
Q. WHAT'S YOUR OUTLOOK FOR MUNICIPALS?
A. Until investors feel like they have a good handle on where the economy,
interest rates and inflation are headed, the bond market is likely to
remain choppy. The past six months have been a relatively good period
compared to U.S. Treasuries and, by the end of the period, munis seemed
fairly valued in relation to their taxable counterparts. I think that the
municipal market will need to continue
to experience strong demand and weak supply in order to continue
outperforming Treasuries.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income for Ohio residents
by normally investing in
investment-grade municipal
securities whose interest is
free from federal income tax
and Ohio individual income tax
FUND NUMBER: 088
TRADING SYMBOL: FOHFX
START DATE: November 15, 1985
SIZE: as of June 30, 1997,
more than $380 million
MANAGER: George Fischer,
since April 1997; manager,
Spartan Connecticut
Municipal Income Fund,
since 1996; joined Fidelity in
1989
(checkmark)
GEORGE FISCHER ON OHIO'S
FISCAL SITUATION:
"Ohio's economy continued to
be strong over the past six
months, which helped to
improve the state's and many
other municipalities' revenue
collections and, therefore, the
state's credit worthiness. But
from a fiscal point of view,
there are some question
marks on the horizon. Chief
among them is the state's
ability to deal with a recent
decision handed down by the
Ohio Supreme Court. That
decision mandated that the
state - rather than local
governments - is
responsible for ensuring
that school funding is fair
and equal across Ohio's
many school districts. It
appears that voters will be
asked later this year to
approve a tax hike to address
the inequalities in the current
funding of schools. But if that
initiative is voted down, it may
mean that the state will be
forced to look elsewhere for
the money needed to address
the school funding problem."
SPARTAN OHIO MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE MARKET SECTORS AS OF JUNE 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
General Obligation 39.3 39.0
Water & Sewer 17.8 17.0
Health Care 10.1 10.0
Education 8.0 8.4
Electric Revenue 6.7 8.2
AVERAGE YEARS TO MATURITY AS OF JUNE 30, 1997
6 MONTHS AGO
Years 12.3 12.9
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF JUNE 30, 1997
6 MONTHS AGO
Years 7.1 7.5
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31,1996
Aaa 53.2%
Aa, A 33.3%
Baa 6.6%
Non-rated 4.2%
Short-term
investments 2.7%
Aaa 55.2%
Aa, A 31.1%
Baa 8.2%
Non-rated 3.3%
Short-term
investments 2.2%
Row: 1, Col: 1, Value: 53.2
Row: 1, Col: 2, Value: 33.3
Row: 1, Col: 3, Value: 6.6
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 4.2
Row: 1, Col: 6, Value: 2.7
Row: 1, Col: 1, Value: 55.2
Row: 1, Col: 2, Value: 31.1
Row: 1, Col: 3, Value: 8.199999999999999
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 2.2
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS. AMOUNTS
SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN OHIO MUNICIPAL INCOME FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL BONDS - 97.3%
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - 94.8%
Adams County Valley Local School Dist. Unltd. Tax:
6.65% 12/1/03 (MBIA Insured) Aaa $ 1,000,000 $ 1,116,250
6.65% 12/1/04 (MBIA Insured) Aaa 1,000,000 1,125,000
6.65% 12/1/05 (MBIA Insured) Aaa 1,000,000 1,131,250
Akron Parking Facs. Ltd. Tax:
8.75% 11/1/03 A 160,000 193,200
8.75% 11/1/04 A 160,000 196,600
8.75% 11/1/05 A 160,000 200,000
Akron Str. Impt. Ltd. Tax Series 1985-1:
8.75% 11/1/03 A 200,000 241,500
8.75% 11/1/04 A 200,000 245,750
8.75% 11/1/05 A 200,000 250,000
Akron Wtrwks. Rev. Rfdg. (Mtg. Impt.)
4.875% 3/1/12 (MBIA Insured) Aaa 2,000,000 1,895,000
Alliance Wtrwks. Rev. (Cap. Appreciation)
0% 10/15/06 (FGIC Insured) Aaa 765,000 484,819
Bedford Hosp. Impt. Rev. Rfdg.
(Bedford Community Hosp.) 8.50% 5/15/09
(Pre-Refunded to 5/15/00 @ 102) (d) - 730,000 803,913
Buckeye Local School Dist. Rfdg.
(Jefferson County) (Cap. Appreciation):
0% 12/1/06 (AMBAC Insured) Aaa 375,000 236,250
0% 12/1/07 (AMBAC Insured) Aaa 760,000 454,100
Buckeye Valley Local School Dist.
(Delaware County) Series A,
6.85% 12/1/15 (MBIA Insured) Aaa 2,500,000 2,909,375
Cleveland Arpt. Sys. Rev. Series A,
6% 1/1/10 (FGIC Insured) Aaa 2,620,000 2,734,625
Cleveland Gen. Oblig. Rfdg.:
5.375% 9/1/11 (AMBAC Insured) Aaa 1,960,000 1,972,250
5.50% 9/1/16 (AMBAC Insured) Aaa 2,000,000 2,000,000
Cleveland Pub. Pwr. Sys. Rev.
(Capital Appreciation) (First Mtg.) Series A:
0% 11/15/08 (MBIA Insured) Aaa 5,480,000 3,103,050
0% 11/15/10 (MBIA Insured) Aaa 2,685,000 1,339,144
0% 11/15/11 (MBIA Insured) Aaa 2,685,000 1,261,950
Cleveland Wtrwks. Rev.:
Rfdg. First Mtg.:
Series F-92 A, 6.25% 1/1/15
(AMBAC Insured) Aaa 3,000,000 3,142,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Cleveland Wtrwks. Rev.: - continued
Rfdg. First Mtg.: - continued
Series F-92 B:
6.125% 1/1/03 (AMBAC Insured) Aaa $ 1,000,000 $ 1,075,000
6.25% 1/1/05 (AMBAC Insured) Aaa 1,000,000 1,075,000
Series G, 5.50% 1/1/21 (MBIA Insured) Aaa 8,725,000 8,768,625
Series H, 5.75% 1/1/16 (MBIA Insured) Aaa 2,500,000 2,546,875
Columbus Gen. Oblig.:
Unltd. Tax Rfdg. Series B, 5.90% 1/1/01 Aaa 1,000,000 1,047,500
Series 1, 6% 5/15/10 Aaa 1,000,000 1,071,250
Unltd. Tax, 9.50% 4/15/04 Aaa 500,000 636,250
8.125% 5/1/01 Aaa 1,000,000 1,126,250
9.375% 4/15/07 Aaa 590,000 794,288
Columbus Swr. Impt. #26-E Unltd. Tax
6.50% 9/15/01 Aaa 2,000,000 2,162,500
Columbus Swr. Rev. Rfdg. 6.25% 6/1/08 A1 2,000,000 2,145,000
Columbus Wtrwks. Enlargement #44 Unltd. Tax
6% 5/1/12 Aaa 1,250,000 1,323,438
Cuyahoga County (Cap. Appeciation)
Unltd. Tax Rfdg. Series A:
0% 10/1/08 (MBIA Insured) Aaa 4,000,000 2,260,000
0% 10/1/09 (MBIA Insured) Aaa 4,200,000 2,241,750
0% 10/1/10 (MBIA Insured) Aaa 5,000,000 2,518,750
0% 10/1/11 (MBIA Insured) Aaa 2,400,000 1,140,000
0% 10/1/12 (MBIA Insured) Aaa 1,505,000 673,488
0% 10/1/13 (MBIA Insured) Aaa 1,500,000 631,875
Cuyahoga County Gen. Oblig.
5.50% 11/15/05 Aa 2,400,000 2,505,000
Cuyahoga County Hosp. Rev. Rfdg.
(Cleveland Clinic Foundation) Series A:
8% 12/1/08 Aa3 1,000,000 1,029,680
8% 12/1/15 Aa3 2,250,000 2,315,475
Dayton Arpt. Rev. Rfdg.
(James M. Cox Dayton Int'l. Arpt.)
5.15% 12/1/07 (AMBAC Insured) Aaa 1,300,000 1,329,250
Delaware City School Dist.:
Construction & Impt. (Cap. Appreciation)
Class B, 0% 12/1/08 (FGIC Insured) Aaa 1,100,000 618,750
Unltd. Tax:
5.50% 12/1/08 (FGIC Insured) Aaa 1,400,000 1,452,500
(Cap. Appreciation) 0% 12/1/09
(FGIC Insured) Aaa 1,000,000 532,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Delaware County Wtr. & Swr. 6.50% 12/1/03 A1 $ 1,750,000 $ 1,914,063
Dublin City School Dist.:
6.20% 12/1/19 (AMBAC Insured) Aaa 1,400,000 1,485,750
Unltd. Tax Rfdg. (Cap. Appreciation)
0% 12/1/04 (AMBAC Insured) Aaa 1,930,000 1,363,063
Fairfield City School Dist.:
Unltd. Tax 7.10% 12/1/07 (FGIC Insured) Aaa 1,120,000 1,321,600
7.45% 12/1/14 (FGIC Insured) Aaa 1,000,000 1,235,000
Franklin County Ltd. Tax:
(Courthouse) 6.375% 12/1/17,
(Pre-Refunded to 12/1/01 @ 102) (d) - 2,500,000 2,731,250
5.50% 12/1/15 Aaa 1,225,000 1,240,313
5.50% 12/1/16 Aaa 1,290,000 1,301,288
Franklin County Rev.
(Online Computer Library Ctr.):
7.20% 7/15/06 - 1,000,000 1,075,000
6% 4/15/12 - 3,500,000 3,517,500
Gateway Econ. Dev. Corp.
(Greater Cleveland Stadiums) Series 1990,
6.50% 9/15/14 - 3,000,000 3,075,000
Granville Village School Dist.
Unltd. Tax. Rfdg. (Cap. Appreciation):
0% 12/1/06 (AMBAC Insured) Aaa 625,000 393,750
0% 12/1/07 (AMBAC Insured) Aaa 665,000 397,338
0% 12/1/08 (AMBAC Insured) Aaa 650,000 365,625
0% 12/1/09 (AMBAC Insured) Aaa 645,000 341,044
Green County Wtr. Sys. Rev.:
Series A, 6% 12/1/16 (FGIC Insured) Aaa 2,500,000 2,631,250
(Cap. Appreciation)
0% 12/1/09 (AMBAC Insured) Aaa 775,000 409,781
Hamilton County:
5.25% 12/1/15 Aa2 1,795,000 1,754,613
5.25% 12/1/16 Aa2 1,900,000 1,845,375
5.25% 12/1/17 Aa2 2,005,000 1,947,356
Hamilton County Health Care Sys. Rev.:
Rfdg. (Providence Hosp.-Franciscan Sisters
Poor Health Sys.) 6.875% 7/1/15 Baa1 5,000,000 5,262,500
(Sisters of Charity Health Care) Series A:
6.25% 5/15/04 (AMBAC Insured) Aaa 1,000,000 1,053,750
6.25% 5/15/08 (AMBAC Insured) Aaa 4,220,000 4,515,400
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Hamilton County Swr. Sys. Rev. Rfdg. Series A:
5.45% 12/1/09 (FGIC Insured) Aaa $ 1,000,000 $ 1,037,500
6% 12/1/05 (FGIC Insured) Aaa 4,500,000 4,871,250
Hamilton Elec. Sys. Mtg. Rev. Rfdg.:
Series A, 6% 10/15/09 (FGIC Insured) Aaa 2,920,000 3,076,950
Series 1992 A, 6% 10/15/08 (FGIC Insured) Aaa 2,000,000 2,080,000
Hillard School Dist. Untld. Tax Series A:
6% 12/1/05 (FGIC Insured) Aaa 1,415,000 1,533,506
5% 12/1/09 (FGIC Insured) Aaa 1,000,000 987,500
Lakewood Gen. Oblig. Series A:
6.60% 12/1/08 Aa 1,525,000 1,734,688
6.60% 12/1/11 Aa 1,630,000 1,858,200
Lakota Local School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation):
0% 12/1/99 A1 445,000 399,944
0% 12/1/00 A1 625,000 534,375
0% 12/1/01 A1 590,000 479,375
0% 12/1/02 A1 555,000 428,044
0% 12/1/03 A1 260,000 189,800
0% 12/1/04 A1 730,000 504,613
0% 12/1/05 A1 690,000 451,950
0% 12/1/06 A1 650,000 400,563
0% 12/1/07 A1 610,000 355,325
Lima Swr. Sys. Rev. Rfdg. & Impt.
6.30% 12/1/12 (AMBAC Insured) Aaa 5,000,000 5,312,500
Logan Hocking Local School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation) Series B, 0% 12/1/08
(AMBAC Insured) Aaa 1,065,000 599,063
Lowellville San. Swr. Sys. Rev.
(Browning-Ferris Industries, Inc.)
7.25% 6/1/06 A3 1,100,000 1,188,000
Lucas County Hosp. Rev.:
Rfdg. (Riverside Hosp. Proj.)
7.625% 6/1/15 Baa1 7,485,000 7,687,769
(Promedica Healthcare Oblig. Group)
6% 11/15/04 (MBIA Insured) Aaa 4,000,000 4,300,000
Mahoning Valley San. Dist.:
7.85% 12/15/12 - 1,200,000 1,288,500
7.85% 12/15/13 - 1,275,000 1,364,250
Mahoning Valley San. Dist. Wtr. Rev.
7.75% 5/15/14 - 3,250,000 3,522,188
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Marion County Hosp. Impt. Rev. Rfdg.
(Community Hosp.):
5.70% 5/15/02 - $ 1,500,000 $ 1,535,625
5.80% 5/15/03 - 1,825,000 1,875,188
6.10% 5/15/06 - 1,000,000 1,042,500
6.375% 5/15/11 - 1,500,000 1,546,875
Marysville Exempt Village School Unltd. Tax Rfdg.
(Cap. Appreciation):
0% 12/1/05 (AMBAC Insured) Aaa 795,000 530,663
0% 12/1/06 (AMBAC Insured) Aaa 750,000 475,313
0% 12/1/07 (AMBAC Insured) Aaa 690,000 414,000
Mason City Sch. Dist. Unltd. Tax:
6.05% 12/1/09 (FGIC Insured) Aaa 1,225,000 1,338,313
6.15% 12/1/10 (FGIC Insured) Aaa 1,420,000 1,558,450
Mentor Exempt Village School Dist. Unltd. Tax Rfdg.
(Cap. Appreciation):
0% 12/1/00 (MBIA Insured) Aaa 755,000 649,300
0% 12/1/01 (MBIA Insured) Aaa 795,000 650,906
0% 12/1/02 (MBIA Insured) Aaa 845,000 660,156
0% 12/1/03 (MBIA Insured) Aaa 840,000 620,550
Middleburg Heights Hosp. Impt. Rev.
(Southwest Gen. Hosp.) 7.20% 8/15/19
(Pre-Refunded to 8/15/01 @ 102) (d) A2 2,000,000 2,245,000
Montgomery County Solid Waste Rev. Rfdg.
6% 11/1/05 (MBIA Insured) Aaa 1,940,000 2,092,775
Newark Wtr. Sys. Impt. (Cap. Appreciation)
0% 12/1/07 (AMBAC Insured) Aaa 455,000 273,000
North Canton School Dist. Impt. Unltd. Tax
5.90% 12/1/14 (AMBAC Insured) Aaa 2,000,000 2,067,500
Northeast Ohio Regional Swr. Dist. Wastewtr. Rev.
Rfdg. 6.25% 11/15/04 (AMBAC Insured) Aaa 1,000,000 1,093,750
Ohio Air Quality Dev. Auth.:
(Columbus & Southern Pwr. Co.) Series A,
6.375% 12/1/20, (FGIC Insured) Aaa 3,000,000 3,172,500
(Ohio Pwr. Co. Proj.) Series B,
7.40% 8/1/09 Baa1 3,250,000 3,428,750
Rfdg. (Dayton Pwr. & Lt. Co. Proj.)
6.10% 9/1/30 A1 4,000,000 4,115,000
Ohio Bldg. Auth.:
Rfdg. (Ohio Ctr. Arts) Series A,
5.45% 10/1/07 Aa3 2,000,000 2,077,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Bldg. Auth.: - continued
Rfdg. (State Correctional Facs.) Series A:
6.50% 10/1/03 Aa3 $ 2,750,000 $ 2,983,750
5.70% 10/1/04 Aa3 1,125,000 1,186,875
5.75% 10/1/05 Aa3 2,080,000 2,199,600
5.60% 10/1/07 Aa3 3,330,000 3,446,550
5.25% 10/1/09 Aa3 3,000,000 3,026,250
Rfdg. (State Facs.-Vern Riffe) Series A,
5.75% 10/1/04 (AMBAC Insured) Aaa 8,250,000 8,755,313
(Administration Bldg. Fund) Series A,
4.875% 10/1/10 Aa3 1,000,000 960,000
(Adult Correctional Facs.)
6% 4/1/06 (AMBAC Insured) Aaa 1,930,000 2,081,988
(Workers Compensation Bldg. A)
4.75% 4/1/14 A2 4,620,000 4,192,650
Ohio Cap. Corp. Multi-Family Hsg. Rev. Rfdg.:
Series C, 7.375% 7/1/23, (FNMA Coll.) - 2,000,000 2,066,480
Series A, 7.50% 1/1/24, (FNMA Coll.) - 1,000,000 1,056,250
Ohio Expositions Commission Ctfs. of Prtn.
(Agricenter Facs.) 8.25% 10/1/06 - 1,060,000 1,176,600
Ohio Gen. Oblig.:
Cap. Appreciation (Infrastructure Impt.)
Series 1989, 0% 9/1/07 Aa1 7,225,000 4,353,063
Cap. Appreciation (College Savings Bonds):
0% 8/1/09 Aa1 2,290,000 1,225,150
0% 8/1/10 Aa1 2,000,000 1,005,000
0% 8/1/14 Aa1 1,375,000 544,844
(Infrastructure Impt.):
6.50% 9/1/01 Aa1 1,000,000 1,082,500
6.65% 9/1/09 Aa1 1,000,000 1,146,250
Unltd. Tax Rfdg. Series R:
0% 9/1/00 Aa1 3,260,000 2,832,125
5.45% 9/1/03 Aa1 2,350,000 2,464,563
Unltd. Tax 5.75% 8/1/04 Aa1 1,000,000 1,066,250
6.50% 8/1/04 Aa1 5,670,000 6,300,788
6.65% 8/1/05 Aa1 3,000,000 3,393,750
6.15% 8/1/10 Aa1 3,530,000 3,860,938
Ohio Higher Edl. Facs. Commission Rev.
(Case Western Reserve Univ. Proj.):
7.70% 10/1/18 Aa3 70,000 71,985
Series B, 6.50% 10/1/02 Aa 2,250,000 2,539,688
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Higher Edl. Facs. Commission Rev.
(Case Western Reserve Univ. Proj.): - continued
Rfdg.:
6% 10/1/14 Aa $ 1,500,000 $ 1,616,250
6.125% 10/1/15 Aa 2,000,000 2,177,500
6.25% 10/1/16 Aa 2,500,000 2,750,000
6% 10/1/22 Aa 650,000 663,000
(Kenyon College Proj.)
5.90% 12/1/06 (AMBAC Insured) Aaa 1,000,000 1,058,750
Ohio Hsg. Fin. Agcy. Mtg. Rev. (Residential B-2)
5.375% 9/1/19 (c) - 4,000,000 4,010,000
Ohio Hsg. Fin. Agcy. Mtg. Residential Rev.
Series A-1, 5.30% 9/1/26
(GNMA Insured) (c) - 1,400,000 1,410,500
Ohio Poll. Cont. Rev. (Standard Oil Co.)
6.75% 12/1/15 Aa3 3,100,000 3,596,000
Ohio Pub. Facs. Commission Higher Ed. Facs.
Series II-a,
6.30% 5/1/03 (AMBAC Insured) Aaa 2,000,000 2,145,000
4.50% 11/1/09 (MBIA Insured) Aaa 2,600,000 2,460,250
Ohio Pub. Facs. Commission Mental Health
Cap. Facs. Series II-B, 5.125% 6/1/11
(FSA Insured) Aaa 2,600,000 2,557,750
Ohio Tpk. Commission (Tpk. Rev.) Series A:
6% 2/15/04 (FSA Insured) Aaa 5,140,000 5,519,075
6% 2/15/05 (FSA Insured) Aaa 2,000,000 2,152,500
6% 2/15/06 (FSA Insured): Aaa 2,200,000 2,378,750
6% 2/15/07 (FSA Insured) Aaa 3,100,000 3,351,875
5.60% 2/15/12 (MBIA Insured) Aaa 2,840,000 2,893,250
5.70% 2/15/13 (MBIA Insured) Aaa 2,660,000 2,723,175
5.70% 2/15/17 (MBIA Insured) Aaa 2,000,000 2,030,000
Ohio Wtr. Dev. Auth. Impt. Rev. Rfdg. (Pure Wtr.)
5.50% 12/1/18 (AMBAC Insured)
(Escrowed to Maturity) Aaa 2,500,000 2,481,250
Ohio Wtr. Dev. Auth. Rev.:
(Fresh Wtr.) 6.25% 12/1/02,
(AMBAC Insured) Aaa 1,915,000 2,070,594
(Pure Wtr.) Series I, 6% 12/1/16
(AMBAC Insured) Aaa 1,685,000 1,777,675
6.25% 12/1/03 (AMBAC Insured) Aaa 2,025,000 2,204,719
Ohio Wtr. Dev. Auth. Rev. Rfdg.
6% 6/1/07 (AMBAC Insured) Aaa 2,000,000 2,175,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Wtr. Dev. Auth. Poll. Cont. Facs. Rev.
(Wtr. Cont. Loan Fund) State Matching Series:
6.50% 1/1/04 (MBIA Insured) Aaa $ 1,000,000 $ 1,108,750
6.50% 12/1/05 (MBIA Insured) Aaa 2,735,000 3,042,688
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev.
(North Star BHP Steel - Cargill)
6.30% 9/1/20 Aa3 6,350,000 6,643,688
Olentangy Local School Dist. Unltd. Tax:
7.75% 12/1/07 (BIG Insured) Aaa 500,000 618,750
7.75% 12/1/09 (BIG Insured) Aaa 100,000 125,000
7.75% 12/1/11 (BIG Insured) Aaa 190,000 239,400
Ottawa County San. Swr. Ltd. Tax
7.50% 10/1/14 (AMBAC Insured)
(Pre-Refunded 10/1/99 @ 102) (d) A1 500,000 544,375
Ottawa County San. Swr. Sys. Rev. Rfdg.
(Cap. Appreciation) (Danbury Proj.)
0% 10/1/06 (AMBAC Insured) Aaa 1,445,000 915,769
Pickerington Local School Dist. Constr. & Impt.
Unltd. Tax 5.8% 12/1/09 (FGIC Insured) Aaa 1,000,000 1,071,250
Portaage County Hosp. Rev.
(Robinson Memorial Hosp. Proj.)
6.50% 11/15/03 (MBIA Insured) Aaa 1,080,000 1,186,650
South Western City Sch. Dist. Rfdg.
(Franklin & Pickway Counties) Series A,
6.20% 12/1/06 (AMBAC Insured) Aaa 1,000,000 1,082,500
Southwest Local School Dist. Unltd. Tax
(Cap. Appreciation) (Hamilton County):
0% 12/1/04 (AMBAC Insured) Aaa 500,000 351,250
0% 12/1/05 (AMBAC Insured) Aaa 525,000 349,125
0% 12/1/06 (AMBAC Insured) Aaa 525,000 330,750
0% 12/1/07 (AMBAC Insured) Aaa 520,000 310,700
Springboro Commty. City School Dist. Unltd. Tax
Rfdg. (Cap. Appreciation)
0% 12/1/06 (AMBAC Insured) Aaa 915,000 575,306
Stark County 5.60% 11/15/08,
(AMBAC Insured) Aaa 1,150,000 1,190,250
Student Loan Fund Corp. Student Loan Rev.
Rfdg. Series A:
5.50% 12/1/01 (c) A1 5,180,000 5,270,650
5.75% 8/1/02 (c) A 3,475,000 3,592,281
7.25% 2/1/08 (c) A 4,000,000 4,190,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Student Loan Funding Corp. Cincinnati Student Loan
Rev. Sr. Sub-Series A:
5.75% 8/1/03 (c) A1 $ 2,000,000 $ 2,050,000
5.85% 8/1/04 (c) A1 5,500,000 5,616,875
Toledo Gen. Oblig.:
6.10% 12/1/04 (AMBAC Insured) Aaa 1,750,000 1,868,125
7.625% 12/1/04 (AMBAC Insured) Aaa 1,000,000 1,183,750
Toledo Wtrwks. Rev.
6% 11/15/06 (FGIC Insured) Aaa 1,000,000 1,088,750
Warren County Ltd. Tax 6.65% 12/1/11 Aa 500,000 576,875
Warren County 6.10% 12/1/12 Aa 500,000 548,125
Warren County Swr. Impt. (P&G Co./Lower Miami)
5.50% 12/1/16 Aa 1,455,000 1,462,275
Westlake City School Dist. Unltd. Tax Series A:
6.15% 12/1/05 Aa3 1,060,000 1,156,725
6.20% 12/1/06 Aa3 1,010,000 1,111,000
361,508,291
PUERTO RICO - 2.5%
Puerto Rico Elec. Pwr. Auth. Rev. Rfdg.
Series W, 7% 7/1/07 (MBIA Insured) Aaa 6,000,000 7,042,500
Puerto Rico Infrastructure Fing. Auth. Spl.
Tax Series 1988 A, 7.75% 7/1/08 Baa1 2,500,000 2,625,960
9,668,460
TOTAL MUNICIPAL BONDS
(Cost $359,186,382) 371,176,751
MUNICIPAL NOTES - 2.7%
OHIO - 2.7%
Columbus Var. Purpose Unltd. Tax
Series 1995 - 1, 4.10%,
BPA Westdeutsche Landesbank, VRDN VMIG 1 4,200,000 4,200,000
Cuyahoga County Hosp. Rev.
Cleveland Clinic:
Foundation Series A, 4.05% 1/1/26
LOC Morgan Guaranty Trust Co VMIG 1 2,000,000 2,000,000
MUNICIPAL NOTES - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
OHIO - CONTINUED
Cuyahoga County Hosp. Rev.
Cleveland Clinic: - continued
Foundation Series 96-B, 4.05% 1/1/26 VMIG 1 $ 400,000 $ 400,000
Franklin County Hosp. Rev.:
(Holy Cross Health Sys. &
Mount Carmel Health Sys.)
Series 95, 4.15%, Liquidity
Morgan Guaranty Trust Co., VRDN VMIG 1 1,600,000 1,600,000
Rfdg. & Impt.
(US Healthcare Corp.) Series C, 4.10%
6/1/98, LOC Morgan Guaranty Trust Co. - 1,000,000 1,000,000
Twinsburg Ind. Dev. Rev. (United Stationers, Inc. Proj.)
4.40%, LOC Pittsburgh Nat'l. Bank, VRDN P-1 1,200,000 1,200,000
10,400,000
TOTAL MUNICIPAL NOTES
(Cost $10,400,000) 10,400,000
TOTAL INVESTMENTS - 100%
(Cost $369,586,382) $ 381,576,751
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
5. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
6. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
7. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
8. Security collateralized by an amount sufficient to pay interest and
principal.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 83.6% AAA, AA, A 76.4%
Baa 5.0% BBB 5.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 4.15%. FMR has
determined that unrated debt securities that are lower quality account for
0% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 39.3%
Water and Sewer 17.8%
Health Care 10.1%
Education 8.0%
Electric Revenue 6.7%
Transportation 6.6%
Others (individually less than 5%) 11.5%
TOTAL 100.0%
INCOME TAX INFORMATION
At June 30, 1997, the aggregate cost of investment securities for income
tax purposes was $369,586,382. Net unrealized appreciation aggregated
$11,990,369, of which $12,252,983 related to appreciated investment
securities and $262,614 related to depreciated investment securities.
At December 31, 1996, the fund was required to defer approximately
$1,223,000 of losses on futures contracts.
SPARTAN OHIO MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $369,586,382) - $ 381,576,751
See accompanying schedule
Cash 372,424
Interest receivable 4,628,947
TOTAL ASSETS 386,578,122
LIABILITIES
Payable for investments purchased $ 5,581,813
Payable for fund shares redeemed 300,746
Distributions payable 371,221
Accrued management fee 112,878
Other payables and accrued expenses 81,106
TOTAL LIABILITIES 6,447,764
NET ASSETS $ 380,130,358
Net Assets consist of:
Paid in capital $ 367,817,956
Accumulated undistributed net realized gain (loss) 322,033
on investments
Net unrealized appreciation (depreciation) on 11,990,369
investments
NET ASSETS, for 33,248,136 shares outstanding $ 380,130,358
NET ASSET VALUE, offering price and redemption price $11.43
per share ($380,130,358 (divided by) 33,248,136 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTEREST INCOME $ 10,236,028
EXPENSES
Management fee $ 735,150
Transfer agent, accounting and custodian fees and 319,690
expenses
Non-interested trustees' compensation 830
Registration fees 10,873
Audit 17,167
Legal 3,543
Miscellaneous 875
Total expenses before reductions 1,088,128
Expense reductions (28,641) 1,059,487
NET INTEREST INCOME 9,176,541
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,695,229
Futures contracts (63,337) 1,631,892
Change in net unrealized appreciation (depreciation) on (263,207)
investment securities
NET GAIN (LOSS) 1,368,685
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,545,226
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 9,176,541 $ 19,039,337
Net interest income
Net realized gain (loss) 1,631,892 3,423,033
Change in net unrealized appreciation (depreciation) (263,207) (6,935,610)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,545,226 15,526,760
FROM OPERATIONS
Distributions to shareholders (9,176,541) (19,039,337)
From net interest income
From net realized gain (1,332,076) (2,343,618)
TOTAL DISTRIBUTIONS (10,508,617) (21,382,955)
Share transactions 26,387,723 52,548,440
Net proceeds from sales of shares
Reinvestment of distributions 7,879,099 16,325,366
Cost of shares redeemed (35,799,379) (85,834,479)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (1,532,557) (16,960,973)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,495,948) (22,816,868)
NET ASSETS
Beginning of period 381,626,306 404,443,174
End of period $ 380,130,358 $ 381,626,306
OTHER INFORMATION
Shares
Sold 2,326,114 4,629,316
Issued in reinvestment of distributions 694,090 1,436,229
Redeemed (3,154,456) (7,582,296)
Net increase (decrease) (134,252) (1,516,751)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 B 1992
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE
DATA
Net asset value, $ 11.430 $ 11.590 $ 10.520 $ 12.020 $ 11.550 $ 11.320
beginning of period
Income from Investment .277 .560 .618 .657 .693 .718
Operations
Net interest income
Net realized and .040 (.090) 1.070 (1.310) .720 .230
unrealized gain
(loss)
Total from investment .317 .470 1.688 (.653) 1.413 .948
operations
Less Distributions
From net (.277) (.560) (.618) (.657) (.693) (.718)
interest income
From net realized gain (.040) (.070) - (.190) (.250) -
Total distributions (.317) (.630) (.618) (.847) (.943) (.718)
Net asset value, $ 11.430 $ 11.430 $ 11.590 $ 10.520 $ 12.020 $ 11.550
end of period
TOTAL RETURN C, D 2.82% 4.23% 16.39% (5.55) 12.56% 8.66%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 380,130 $ 381,626 $ 404,443 $ 350,267 $ 457,872 $ 384,861
period (000 omitted)
Ratio of expenses to .57% A .59% .58% .57% .57% .61%
average net assets , E
Ratio of net interest 4.92% A 4.93% 5.52% 5.88% 5.67% 6.31%
income to average
net assets
Portfolio turnover rate 17% A 43% 48% 22% 41% 20%
</TABLE>
9. ANNUALIZED
10. EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
11. TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
12. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
13. FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER. (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.)
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look at
either total return or yield. Total return reflects the change in the value
of an investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that have
grown in value). Yield measures the income paid by a fund. Since a money
market fund tries to maintain a $1 share price, yield is an important
measure of performance. If Fidelity had not reimbursed certain fund
expenses the past five years and life of fund total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Fidelity Ohio Municipal Money Market Fun 1.59% 3.15% 14.79% 31.78%
d
Ohio Tax-Free Money Market Funds 1.57% 3.12% 14.65% 30.27%
Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on August 29, 1989. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the Ohio tax-free money market
funds average, which reflects the performance of Ohio tax-free money market
funds with similar objectives tracked by IBC Financial Data, Inc. The past
six months average represents a peer group of 16 mutual funds. (The periods
covered by IBC Financial Data, Inc. numbers are the closest available match
to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Fidelity Ohio Municipal Money Market Fun 3.15% 2.80% 3.58%
d
Ohio Tax-Free Money Market Funds 3.12% 2.77% 3.45%
Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/30/97 3/31/97 12/30/96 9/30/96 7/1/96
Fidelity Ohio Municipal 3.58% 2.99% 3.45% 3.21% 2.94%
Money Market Fund
Ohio Tax-Free Money 3.46% 2.94% 3.36% 3.19% 2.93%
Market Funds Average
Ohio Municipal Money 6.01% 5.02% 5.80% 5.39% 4.94%
Market Tax-equivalent
Row: 1, Col: 1, Value: 3.58
Row: 1, Col: 2, Value: 0.0
Row: 2, Col: 1, Value: 3.0
Row: 2, Col: 2, Value: 0.0
Row: 3, Col: 1, Value: 3.45
Row: 3, Col: 2, Value: 3.36
Row: 4, Col: 1, Value: 3.21
Row: 4, Col: 2, Value: 3.19
Row: 5, Col: 1, Value: 2.94
Row: 5, Col: 2, Value: 2.93
Ohio Municipal
Money Market
Fund
Ohio Tax-Free
Money Market
Funds Average
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the Ohio tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1997 federal
and state income tax rate of 40.48% and reflects that a portion of the
fund's income was subject to state taxes. A portion of the fund's income
may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. Government neither
insures nor guarantees a
money market fund. And there
is no assurance that a money
fund will maintain a $1 share
price.
(checkmark)
SPARTAN OHIO MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio Manager of Spartan Ohio Municipal
Money Market Fund
Q. WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS, SCOTT?
A. We saw a fairly big pendulum swing in interest rate expectations over
the past six months. At the beginning of the period, the market had become
complacent with the Federal Reserve Board's monetary policy. At that time,
the economy was growing at a moderate pace and inflation remained under
control. The Fed had stayed on the sidelines, keeping the rate banks charge
each other for overnight loans - known as the fed funds rate - steady at
5.25% since January 1996. In February and March 1997, however, signs that
the economy was growing at a stronger clip changed market sentiment.
Expectations of a rate increase culminated in the Fed's announcement at its
March 25 Open Market Committee meeting that it had increased the fed funds
rate by 0.25% to 5.50%. For the next month or so, the market expected the
Fed to continue to raise rates. However, at its May meeting, the Fed
decided to hold off because economic growth had moderated again and
inflation was still benign. The lack of action by the Fed prompted most
market participants to shift back to the expectation of steady rates for
the next six to nine months.
Q. WHAT WAS THE FUND'S STRATEGY IN THIS ENVIRONMENT?
A. For much of the period, I expected rates to be higher in the ensuing
months. As a result, part of my strategy was to invest in variable-rate
securities because they move up or down with changes in interest rates. At
the same time, I sought to buy fixed-rate notes when they were expected to
provide higher yields than variable-rate securities over the terms of the
notes. There was a healthy supply of longer-term notes offering higher
yields in the Ohio market that I found to be attractive. As a result, the
fund tended to maintain an average maturity that was a bit longer than its
competitors, 64 days at the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 1997, was 3.58%, compared to
3.47% six months ago. For Ohio investors in the 40.48% combined state and
federal income tax bracket, the latest yield was the equivalent of a 6.01%
return on a taxable investment. Through June 30, 1997, the fund's six-month
total return was 1.59%, compared to 1.57% for the Ohio tax-free money
market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. Even though there has been some recent moderation in the economy, I am
not convinced that the Fed has completely abandoned the possibility of
raising rates over the next six to nine months. However, without a
resurgence of economic strength or any sign of inflationary pressure, the
Fed may be able to stand pat for quite a while. As such, I believe the
markets will look a lot like they did through much of 1996, when investors
looked at statistics week by week to try to discern the strength of the
economy, the outlook for inflation and, hence, Fed policy.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income while maintaining
a stable $1 share price by
investing in high-quality,
short-term municipal money
market securities whose
interest is free from federal
income tax and Ohio
individual income tax
FUND NUMBER: 419
TRADING SYMBOL: FOMXX
START DATE: August 29, 1989
SIZE: as of June 30, 1997,
more than $328 million
MANAGER: Scott Orr, since
August 1996; manager,
various Fidelity and Spartan
municipal money market
funds; joined Fidelity in 1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall. When
the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future tax
or other revenues and payable
from those specific sources.
TENDER BOND: A variable-rate,
usually long-term security that
give the bond holder the
option to redeem the bond at
face value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN OHIO MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND % OF FUND % OF FUND
ASSETS ASSETS ASSETS
6/30/97 12/31/96 6/30/96
0 - 30 72 61 60
31 - 90 9 10 13
91 - 180 6 16 15
181 - 397 13 13 12
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/96 6/30/96
Ohio Municipal 64 days 70 days 65 days
Money Market Fund
Ohio Tax-Free Money 53 days 60 days 58 days
Market Funds Average
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31,1996
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 28.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 65.0
Variable rate demand
notes (VRDNs) 61%
Commercial paper
(including CP mode) 5%
Tender bonds 5%
Municipal
notes 28%
Other 1%
Variable rate demand
notes (VRDNs) 65%
Commercial paper
(including CP mode) 4%
Tender bonds 3%
Municipal
notes 28%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 28.0
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 5.0
Row: 1, Col: 5, Value: 60.0
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investments in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - 100.0%
American Muni. Pwr. BAN:
(Bldg. Acquisition) 3.95% 11/12/97 $ 1,800,000 $ 1,800,000
(Cleveland Pub. Pwr. Proj.) 4.15% 9/3/97 7,750,000 7,750,000
3.95% 12/9/97 600,000 600,000
Ashtabula (Plasticolors, Inc. Proj.) Series 1996A,
4.40%, LOC Key Bank NA, VRDN 2,400,000 2,400,000
Beavercreek City Gen. Oblig. BAN 4% 8/15/97 5,000,000 5,001,920
Bedford Heights Ind. Dev. (Olympic Steel) Series 1989,
4.40%, LOC Nat'l. City Bank, Cleveland, VRDN (b) 1,250,000 1,250,000
Bexley Gen. Oblig. BAN 4.25% 6/25/98 2,000,000 2,006,610
Butler County VRDN:
(Middletown Regional Hosp. Proj.)
4.15%, LOC Star Bank NA, 2,200,000 2,200,000
(Meadow Ridge Apts.) Series 1996 A,
4.25% (FNMA Guaranteed) 7,600,000 7,600,000
Butler County Ind. Dev. Rev. (Trey Corrugated, Inc.) Series 1995,
4.40%, LOC First Bank of America Indiana, VRDN (b) 4,905,000 4,905,000
Cambridge Hosp. Fac. Rev. Bonds (Southeastern Reg. Med. Ctr.)
tender 7/1/97, 3.95%, LOC Nat'l City Bank Columbus 4,000,000 4,000,000
Clermont County Ind. Dev. Rev. (American Micro Prod. Proj.)
4.40%, LOC Star Bank, VRDN (b) 5,435,000 5,435,000
Cleveland City School Dist., Tender Option Ctfs.
Series BT-246, 4.275%
(Liquidity Facility Bankers Trust Co.) (c) 3,240,000 3,240,000
Columbus Various Purp. Adj. Rate Unltd. Tax Rev.
Series 1995-1, 4.10%,
(Liquidity Facility Westdeutsche Landesbank) VRDN 5,800,000 5,800,000
Cuyahoga County (The Great Lakes Brewing Co. Proj.)
Series 1997, 4.35%, LOC Huntington Nat'l. Bank,
VRDN (b) 5,700,000 5,700,000
Cuyahoga Falls City Gen. Oblig. BAN 4% 8/28/97 2,000,000 2,001,087
Dublin Central School Dist. Gen. Oblig.
BAN 4.33% 5/13/98 4,000,000 4,010,978
East Muskingum Gen. Oblig. BAN 4.22% 6/25/98 4,851,000 4,865,688
Elyria Gen. Oblig. BAN:
4.40% 10/10/97 1,000,000 1,000,797
4.25% 6/4/98 1,100,000 1,102,445
Erie County (Garbage and Refuse Dist.) BAN 4.50% 7/11/97 2,000,000
2,000,263
Euclid Gen. Oblig. BAN 4.05% 6/12/98 4,410,000 4,415,994
Fairfax Ind. Dev. Rev. (Johnson & Hardin Co. Proj.)
Series 1990, 4.40%, LOC Central Trust Co.,VRDN (b) 2,000,000 2,000,000
Finneytown Local School Dist. Gen. Oblig.
BAN 4.22% 7/17/97 1,270,000 1,270,339
Franklin County Ind. Dev. Rev. (Inland Products, Inc.)
4.40%, LOC PNC Bank, Ohio, VRDN (b) 900,000 900,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Franklin County (Colonial Courts) 4.30%, LOC Fed. Home
Loan Bank Indiana, VRDN (b) $ 2,500,000 $ 2,500,000
Greene County Gen. Oblig. BAN:
Series C, 4.25% 6/4/98 3,200,000 3,209,957
Series D, 4% 9/11/97 745,000 745,141
4% 12/11/97 3,000,000 3,004,515
Hamilton County:
(Beechwood Home Proj.) 4.25%,
LOC Star Bank NA, VRDN 4,100,000 4,100,000
(Metro Containers, Inc. Proj.) 4.30%,
LOC Bank One, VRDN (b) 2,500,000 2,500,000
Hamilton BAN (Golf Course Impt. Proj.) Series D,
4.25% 11/7/97 1,214,000 1,215,235
Hancock County Gen. Oblig. BAN 4.83% 11/21/97 3,000,000 3,012,224
Harrison County Econ. Dev. Rev. Ref. (Carriage of Cadiz Proj.)
4.22%, LOC KeyBank Nat'l., VRDN 1,830,000 1,830,000
Holmes County Ind. Dev. Rev. (Poultry Processing, Inc.)
Series 1990, 4.30%, LOC Rabobank Nederland, VRDN (b) 500,000 500,000
Kent City School Dist. Gen. Oblig. BAN 4% 7/15/97 1,000,000 1,000,132
Lake County Gen. Oblig. BAN 4% 3/12/98 1,000,000 1,001,670
Lake County Ind. Dev. Rev.:
(Norshar Co. Proj.) 4.30%, LOC Bank One, VRDN (b) 3,500,000 3,500,000
(American Bus. Co. Proj.) 4.35%,
LOC Huntington Nat'l. Bank, Columbus, VRDN (b) 1,400,000 1,400,000
Lakewood City Gen. Oblig. BAN:
Series A, 4.50% 5/8/98 3,211,600 3,223,912
4.15% 10/3/97 881,000 881,216
Lancaster Gen. Oblig. BAN 4.15% 11/18/97 1,060,000 1,060,976
Lebanon Gen. Oblig. BAN:
4% 5/28/98 1,000,000 1,000,000
4.17% 6/4/98 2,800,000 2,806,722
Lima Hosp. Rev. (Lima Memorial Hosp.) 4.20%,
LOC Bank One, VRDN 2,530,000 2,530,000
Lorain County Gen. Oblig. BAN 4.40% 9/19/97 1,000,000 1,000,842
Lorain County Independent Living & Hosp. Rev.
(Elyria United Methodist Village) 4.20%,
LOC Key Bank Nat'l. Assoc., VRDN 1,820,000 1,820,000
Lucas County VRDN:
(Beacon Place/Cubbin PJ) 4.20%, LOC Star Bank (d) 3,800,000 3,800,000
(The Toledo Zoological Society) 4.25%, LOC Key Bank 6,000,000 6,000,000
Lyndhurst Gen. Oblig. BAN 4% 3/18/98 1,000,000 1,001,368
Madeira Local School Dist. Gen. Oblig. BAN:
4.22% 7/17/97 1,000,000 1,000,267
4.50% 7/17/97 1,000,000 1,000,368
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Maumee Gen. Oblig. BAN 4.25% 4/29/98 $ 700,000 $ 700,556
Medina County Ind. Dev. Rev. VRDN:
(Fire-Dex Inc. Proj.) Series 1997, 4.40%, LOC Key Bank (b) 1,100,000
1,100,000
(North American Roto Engravers, Inc. Proj.) Series 1988,
4.30%, LOC Bank One Akron (b) 520,000 520,000
(Rembond Proj.) Series 1996, 4.30%, LOC Bank One (b) 3,000,000 3,000,000
Mentor (Timeless Enterprises Proj.)
4.40%, LOC KeyBank Nat'l., VRDN (b) 2,500,000 2,500,000
Miamisburg Gen. Oblig. BAN 4.29% 9/26/97 735,000 735,404
Middletown Ind. Dev. Rev. (Pilot Chemical Proj.) 4.30%,
LOC Bank One, Dayton, VRDN (b) 2,100,000 2,100,000
Montgomery County VRDN:
(Eastway Corp. & Prop. Resources) 4.35%,
LOC Huntington Nat'l. Bank, Columbus (b) 4,000,000 4,000,000
Multifamily Hsg. Rev. (Pedcor Investments - Lyons Gate)
4.30%, LOC Fed Home Loan Cincinnati (b) 3,000,000 3,000,000
Moreland Hills Gen. Oblig. BAN 3.95% 12/17/97 500,000 500,558
Ohio Air Quality Dev. Auth. Poll Cont. Rev. Bonds
(Duquesne Lt. Co. Proj.):
Series 88, 3.75%, 7/17/97, LOC Toronto-Dominion Bank,
CP mode 2,000,000 2,000,000
Series 88, 3.80%, 8/1/97, LOC Toronto-Dominion Bank,
CP mode 1,000,000 1,000,000
Ohio Envir. Impt. Rev. (Newark Group Industries, Inc. Proj.)
Series 1996, 4.30%,
LOC Chase Manhattan Bank, VRDN (b) 1,000,000 1,000,000
Ohio Hsg. Fin. Agcy. Multifamily Hsg. Rev. VRDN:
(Hunter's Glen Apt. Proj.) Series 1996, 4.35%,
LOC PNC Bank (b) 2,000,000 2,000,000
(Club at Spring Valley Apts.) Series 1996 A, 4.25%,
LOC KeyBank Nat'l. (b) 5,000,000 5,000,000
Ohio Hsg. Fin. Agcy. Participating VRDN (c):
Series PA-93, 4.35% (Liquidity Facility Merrill Lynch) (b) 4,865,000
4,865,000
Series 14, 4.45% (Liquidity Facility Bank of New York) (b) 3,300,000
3,300,000
Series 96C3501, 4.25%
(Liquidity Facility Citibank, New York) (b) 9,900,000 9,900,000
Ohio Hsg. & Fin. Agcy Single Family Mtg. Participating VRDN:
Series 96-5, 4.35%
(Liquidity Facility Bank of New York) (b) 5,250,000 5,250,000
Series 96-6, 4.35%
(Liquidity Facility Bank of New York, NY) (b)(c) 3,650,000 3,650,000
Ohio Hsg. & Fin. Agcy. VRDN:
(Pedcor Investments Willowlake Apt. Proj.):
Series A, 4.30%, LOC Bank One, Columbus (b) 3,200,000 3,200,000
Series B, 4.40%, LOC Federal Home Loan Bank (b) 500,000 500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Hsg. & Fin. Agcy. VRDN: - continued
(Pedcor Investments Willowlake Apt. Proj.): - continued
Series C, 4.40%, LOC Federal Home Loan Bank (b) $ 625,000 $ 625,000
Series D, 4.40%, LOC Federal Home Loan Bank (b) 625,000 625,000
Ohio Ind. Dev. Rev. VRDN:
(Aerolite Extrusion) Series 1991 IA, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 165,000 165,000
(Anomatic Corp.) Series 1989 I, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 190,000 190,000
(Arthur Corp.) Series 1989 IIIA, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 205,000 205,000
(Burnham Corp. Proj.) Series 1987 N, 4.30%,
LOC Bank One, Columbus (b) 130,000 130,000
(Burnham Corp. Proj.) Series 1988 II, 4.30%,
LOC PNC Bank Corp. (b) 180,000 180,000
(Carpenter/Clapp & Haney Tool Co.)
Series 1987 P, 4.30%, LOC Bank One, Columbus (b) 285,000 285,000
(CCE, Inc.) Series 1989 I, 4.30%,
LOC Nat'l. City Bank,Columbus (b) 780,000 780,000
(Cole Die & Tool) Series 1988 H, 4.30%,
LOC Banc One, Columbus (b) 165,000 165,000
(Die Matic, Inc.) Series 1987 O, 4.30%,
LOC Banc One, Columbus (b) 200,000 200,000
(Dramex Int'l., Inc.) Series 1988 I, 4.30%,
LOC Bank One, Columbus (b) 1,000,000 1,000,000
(Dramex Int'l., Inc.) Series 1988 II, 4.30%,
LOC PNC Bank Corp. (b) 200,000 200,000
(EPIC Technologies, Inc.) Series 1988 D, 4.30%,
LOC Banc One, Columbus (b) 220,000 220,000
(Gary W. James) Series 1986 B, 4.30%,
LOC Nat'l. City Bank, Cleveland (b) 240,000 240,000
(HGN Realty/Shalmet Ohio, Inc.) Series 1989 III A, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 1,640,000 1,640,000
(Hydro Tube Corp.) 4.30%,
LOC Nat'l. City Bank, Columbus (b) 85,000 85,000
(K&S Realty) Series 1989 III, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 250,000 250,000
(K&S Realty/Starr Fabricating, Inc.) Series 1989 III, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 230,000 230,000
(Kaufmans Bakery) Series 1987 K, 4.30%,
LOC Banc One, Columbus (b) 600,000 600,000
(Midwest Acoust-A-Fiber, Inc.) Series 1989 I, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 430,000 430,000
(Morrow Macke Realty) Series 1988 C, 4.30%,
LOC Bank One, Columbus (b) 560,000 560,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Ind. Dev. Rev. VRDN: - continued
(Oak Printing) Series 1991, 4.30%,
LOC Nat'l. City Bank, Columbus (b) $ 150,000 $ 150,000
Ohio Ind. Dev. Rev. VRDN: - continued
(Plasticos Co.) Series 1989 IIIA, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 545,000 545,000
(Prentke Romich) Series 1989 III, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 70,000 70,000
(Samuel and Annie Sherman) Series 1989 III A, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 200,000 200,000
(SBD Properties Co.) Series 1986 L, 4.30%,
LOC Nat'l. City Bank, Cleveland (b) 180,000 180,000
(Sheffield Steel) Series 1988 B, 4.30%,
LOC Bank One, Columbus (b) 35,000 35,000
(Southwest Fin. Svcs.) Series 1986 J, 4.30%,
LOC Nat'l. City Bank, Cleveland (b) 70,000 70,000
(Standby Screw) Series 1991 IA, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 650,000 650,000
(Steubenville Area) Series 1988 II, 4.30%,
LOC PNC Bank Corp. (b) 315,000 315,000
(Thomas K. Issacs) Series 1990 IB, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 150,000 150,000
(United Steel Svc.) Series 1988 J, 4.30%,
LOC Bank One, Columbus (b) 560,000 560,000
(VRE, Inc.) Series 1988 F, 4.30%,
LOC Banc One, Columbus (b) 170,000 170,000
(Walker-Williams Lumber Co.) Series 1989 IIIA, 4.30%,
LOC Nat'l. City Bank, Columbus (b) 1,010,000 1,010,000
(Wooster Iron Metal Co.) Series 1988 R, 4.30%,
LOC Bank One, Columbus (b) 335,000 335,000
Ohio Higher Ed. Facs. Commty. Pooled Fin. Series 1996,
4.20%, LOC Fifth Third Bank, VRDN 3,000,000 3,000,000
Ohio Poll. Cont. Rev. (Sohio Wtr. Proj. - The British
Petroleum Co.) Series 1995, 4.05%, VRDN 1,000,000 1,000,000
Ohio School Dist. BAN 4.47% 6/30/98 (d) 2,000,000 2,011,320
Ohio Single Family Mtg. Bonds Series C-18, 3.70%,
tender 8/1/95 (Liquidity Facility Citibank) 3,125,000 3,125,000
Ohio Wtr. Dev. Auth. Poll. Cont. Rev. Bonds
(Duquesne Lt. Co. Proj.):
3.50%, 7/15/97, LOC Toronto Dominion, CP mode (b) 3,800,000 3,800,000
3.75%, 7/17/97, LOC Toronto Dominion, CP mode (b) 1,000,000 1,000,000
3.55%, 7/22/97, LOC Toronto Dominion, CP mode (b) 2,000,000 2,000,000
3.50%, 7/29/97, LOC Toronto Dominion, CP mode (b) 2,000,000 2,000,000
3.80%, 8/1/97, LOC Toronto Dominion, CP mode (b) 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev.
(American Steel & Wire Corp.)
4.40%, LOC Bank of America, Illinois, VRDN (b) $ 3,900,000 $ 3,900,000
Olentangy School Dist. Gen. Oblig. BAN 4.25% 8/15/97 4,000,000 4,002,687
Orange City School Dist. Gen. Oblig. BAN 4.25% 6/12/98 2,720,000
2,727,684
Oregon City School Dist Gen. Oblig. TAN 4.50% 12/30/97 2,050,000
2,053,966
Reynoldsburg City Gen. Oblig. BAN 4.15% 1/15/98 890,000 891,390
Richland County Ind'l. Dev. Rev. VRDN:
(Carton Services, Inc. Proj.) Series 1996, 4.40%,
LOC National CityBank, Cleveland (b) 1,980,000 1,980,000
(Sabin Robbins Paper Co.) Series 1997, 4.30%,
LOC Fifth Third Bank, Cincinnati 3,200,000 3,200,000
Scioto County Marine Term. Facs. Rev.
(Norfolk Southern Corp. Proj.) 5.50%, VRDN 11,800,000 11,800,000
Sharonville Ind. Dev. Rev. (Xtec, Inc.) Series 1991,
4.30%, LOC Fifth Third Bank, VRDN (b) 800,000 800,000
Solon Ind. Dev. Rev. (Cleveland Twist Drill Co.) Series 1995,
4.40%, LOC NationsBank,VRDN (b) 1,000,000 1,000,000
Springdale Gen. Oblig. BAN:
4.50% 9/19/97 2,000,000 2,001,723
Springfield Gen. Oblig. BAN:
4.60% 8/14/97 1,500,000 1,500,868
4.17% 6/18/98 1,250,000 1,252,543
Springfield City School Dist. Rfdg. Gen. Oblig. Bonds
(Clark County) 3.65% 12/1/97 540,000 540,000
Stark County Ind. Dev. Rev. VRDN:
(H-P Products, Inc. Proj.) 4.40%, LOC Key Bank (b) 3,200,000 3,200,000
(Liquid Cont. Corp. Proj.) Series 1987, 4.30%,
LOC Bank One (b) 330,000 330,000
Stow County Gen. Oblig. BAN 4% 12/18/97 1,940,000 1,943,044
Student Loan Fdg. Corp. Rev. VRDN:
Series 1990-A1, 4.30%,
LOC Nat'l. Westminster Bank PLC (b) 5,700,000 5,700,000
Series 1990-A2, 4.30%,
LOC Nat'l. Westminster Bank PLC (b) 9,700,000 9,700,000
Series 1990-A3, 4.30%,
LOC Nat'l. Westminster Bank PLC (b) 6,400,000 6,400,000
Summit County Gen. Oblig. BAN 4.50% 6/4/98 5,000,000 5,028,058
Summit County Ind. Dev. Rev.:
Bonds:
(Kuchar Proj.) 3.90%, tender 10/1/97,
LOC Bank One Akron (b) 470,000 470,000
(SGS Tool Co. Proj.) 3.80%, tender 10/1/97,
LOC Bank One Akron (b) 1,800,000 1,800,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
OHIO - CONTINUED
Summit County Ind. Dev. Rev.: - continued
Bonds: - continued
(Spark Tec Int'l. Proj.) Series 1989, 4.05%,
tender 11/1/97, LOC Bank One Akron (b) $ 185,000 $ 185,000
(Commercial Alloys Corp.) 4.30%,
LOC Star Bank, VRDN (b) 4,500,000 4,500,000
(Hampshire Properties) 4.30%,
LOC Key Bank Nat'l, VRDN (b) 1,070,000 1,070,000
(Kaiser Dev. Proj.) 4.30%,
LOC Bank One Akron, VRDN 850,000 850,000
(Keltec, Inc. Proj.) Series 1987, 4.30%, LOC Bank One,
VRDN (b) 340,000 340,000
(Kuchar Proj.) Series 1987, 4.30%, LOC Bank One,
VRDN (b) 905,000 905,000
(Mannix County Proj.) Series 1987, 4.30%,
LOC Bank One Akron, VRDN (b) 1,865,000 1,865,000
(Summit Plastic Co. Proj.) 4.40%,
LOC National CityBank, VRDN (b) 3,240,000 3,240,000
(Triumph Holdings Proj.) 4.40%,
LOC Nat'l. City Bank Northeast, VRDN (b) 1,820,000 1,820,000
Trumbull County Ind. Dev. Rev. (McDonald Steel Co.)
Series 1990, 4.40%, LOC Pittsburg Nat'l Bank, VRDN (b) 1,800,000
1,800,000
Twinsburg Ind. Dev. Rev. (United Stationers, Inc. Proj.)
4.40%, LOC Pittsburg Nat'l Bank, VRDN (b) 400,000 400,000
Union County Gen. Oblig. BAN 4.17% 6/25/98 1,500,000 1,503,832
Van Wert County Ind. Dev. Auth. Rev.
(Toledo Molding & Die, Inc.) Series 1994,
4.30% LOC Bank One, VRDN (b) 2,955,000 2,955,000
Wadsworth City Gen. Oblig. BAN 3.80% 12/19/97 1,600,000 1,600,000
Warren County Ind. Dev. Rev. (Johnson & Hardin Enterprise)
Series 1990 A, 4.40%, LOC Central Trust, VRDN (b) 2,900,000 2,900,000
Washington County Gen. Oblig. BAN 4.25% 11/05/97 1,385,000 1,386,855
Washington County Ind. Dev. Rev. (Forma Scientific, Inc. Proj.)
4.40%, LOC Bank One, Akron, VRDN (b) 400,000 400,000
Wood County Ind. Dev. Rev. (TL Industries & AMPP, Inc. Proj.)
4.40%, LOC Nat'l. City Northwest, VRDN (b) 1,850,000 1,850,000
333,896,154
TOTAL INVESTMENTS - 100% $ 333,896,154
Total Cost for Income Tax Purposes $ 333,896,154
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
4. Security purchased on a delayed delivery or when-issued basis.
INCOME TAX INFORMATION
At June 30, 1997, the fund had a capital loss carryforward of approximately
$79,000 of which $5,000, $6,000, $11,000, $7,000 and $50,000 will expire on
December 31, 1998, 2000, 2002, 2003 and 2004, respectively.
FIDELITY OHIO MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 333,896,154
See accompanying schedule
Cash 1,676,329
Interest receivable 2,562,644
TOTAL ASSETS 338,135,127
LIABILITIES
Payable for investments purchased $ 3,200,000
Regular delivery
Delayed delivery 5,811,320
Distributions payable 27,338
Accrued management fee 105,870
Other payables and accrued expenses 63,070
TOTAL LIABILITIES 9,207,598
NET ASSETS $ 328,927,529
Net Assets consist of:
Paid in capital $ 329,011,102
Accumulated net realized gain (loss) on investments (83,573)
NET ASSETS, for 329,011,102 shares outstanding $ 328,927,529
NET ASSET VALUE, offering price and redemption price $1.00
per share ($328,927,529 (divided by) 329,011,102 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTEREST INCOME $ 6,060,675
EXPENSES
Management fee $ 632,462
Transfer agent, accounting and custodian fees and 288,357
expenses
Non-interested trustees' compensation 377
Registration fees 19,543
Audit 14,040
Legal 3,363
Miscellaneous 887
Total expenses before reductions 959,029
Expense reductions (3,328) 955,701
NET INTEREST INCOME 5,104,974
NET REALIZED GAIN (LOSS) ON INVESTMENTS (4,192)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,100,782
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,104,974 $ 9,461,291
Net interest income
Net realized gain (loss) (4,192) (49,874)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,100,782 9,411,417
FROM OPERATIONS
Distributions to shareholders from net interest income (5,104,974) (9,461,291)
Share transactions at net asset value of $1.00 per share 295,977,236 616,078,137
Proceeds from sales of shares
Reinvestment of distributions 4,946,578 9,169,404
Cost of shares redeemed (299,585,013) (593,825,109)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,338,801 31,422,432
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,334,609 31,372,558
NET ASSETS
Beginning of period 327,592,920 296,220,362
End of period $ 328,927,529 $ 327,592,920
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED JUNE 30,
1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from Investment .016 .030 .034 .025 .021 .028
Operations
Net interest income
Less Distributions
From net (.016) (.030) (.034) (.025) (.021) (.028)
interest income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B 1.59% 3.08% 3.48% 2.50% 2.09% 2.81%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 328,928 $ 327,593 $ 296,220 $ 301,691 $ 262,371 $ 270,248
period (000 omitted)
Ratio of expenses to .60% .60% .61% .57% .59% .58%
average net assets A C
Ratio of expenses to .60% .59% .61% .57% .59% .58%
average net assets A D
after expense
reductions
Ratio of net interest 3.18% 3.03% 3.42% 2.48% 2.07% 2.78%
income to average A
net assets
</TABLE>
1. ANNUALIZED
2. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
3. FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
4. FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1997 (Unaudited)
6. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Ohio Municipal Income Fund (the income fund)(formerly Fidelity Ohio
Municipal Income Fund) is a fund of Fidelity Municipal Trust. Fidelity Ohio
Municipal Money Market Fund (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 financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the income and the money market fund :
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Securities for which
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its 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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
These differences, which may result in distribution reclassifications, are
primarily due to differing treatments for futures transactions, market
discount, and losses deferred due to futures. The income fund also utilized
earnings and profits distributed to shareholders on redemption of shares as
a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
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.
7. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a delayed delivery basis. Payment and delivery may take place a month or
more after the date of the transaction. The price of the underlying
securities and the date when the securities will be delivered and paid for
are fixed at the time the transaction is negotiated. With respect to
purchase commitments, each fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under the
contract.
FUTURES CONTRACTS. The income fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms. Gains and losses are realized upon
the expiration or closing of the futures contracts. Futures contracts are
valued at the settlement price established each day by the board of trade
or exchange on which they are traded.
8. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $31,389,933 and $33,227,137, respectively.
The market value of futures contracts opened and closed during the period
amounted to $4,659,478 and $4,673,116, respectively.
9. 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 and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. The annual individual fund fee rate is .25%. In the
event that these rates were lower than the contractual rates in effect
during the period, FMR voluntarily implemented the above rates, as they
resulted in the same or a lower management fee. For the period, the
management fees were equivalent to annualized rates of .39% of average net
assets for the income and money market funds, respectively.
10. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
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.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer, and shareholder servicing agent for the funds. The Bank has
entered into a sub-contract with Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, under which FSC performs the activities associated with
the funds' transfer and shareholder servicing agent and accounting
functions. The funds pay account fees and asset-based fees that vary
according to account size and type of account. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
The accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses. For the period, FSC received transfer
agent and accounting fees amounting to $224,534 and $84,830 for the income
fund and $241,191 and $35,854 for the money market fund, respectively.
For the period, the transfer agent fees were equivalent to an annualized
rate of .12% and .15% of average net assets for the income fund and the
money market fund, respectively.
11. EXPENSE REDUCTIONS.
Effective April 1, 1997, FMR voluntarily agreed to reimburse operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above an annual rate of .55% of the income fund's
average net assets. For the period, the reimbursement reduced expenses by
$27,726 for the Income fund.
In addition, each fund has entered into arrangements with its transfer
agent whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of the fund's expenses. During the period, the
transfer agent fees were reduced by $915 and $3,328, for the income and
money market funds respectively, under these arrangements.
PROXY VOTING RESULTS
A special meeting of Fidelity Ohio Municipal Money Market Fund's
shareholders was held on July 16, 1997. The results of votes taken among
shareholders on proposals are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
J. GARY BURKHEAD
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,689,929.498 96.136
Withheld 17,871,441.790 3.864
TOTAL 462,561,371.288 100.000
RALPH F. COX
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 443,768,598.498 95.937
Withheld 18,792,772.790 4.063
TOTAL 462,561,371.288 100.000
PHYLLIS BURKE DAVIS
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 443,103,899.148 95.794
Withheld 19,457,472.140 4.206
TOTAL 462,561,371.288 100.000
ROBERT M. GATES
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 443,950,387.378 95.977
Withheld 18,610,983.910 4.023
TOTAL 462,561,371.288 100.000
EDWARD C. JOHNSON 3RD
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,259,190.958 96.043
Withheld 18,302,180.330 3.957
TOTAL 462,561,371.288 100.000
E. BRADLEY JONES
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 442,923,945.528 95.755
Withheld 19,637,425.760 4.245
TOTAL 462,561,371.288 100.000
DONALD J. KIRK
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,464,359.398 96.088
Withheld 18,097,011.890 3.912
TOTAL 462,561,371.288 100.000
PETER S. LYNCH
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,937,445.098 96.190
Withheld 17,623,926.190 3.810
TOTAL 462,561,371.288 100.000
WILLIAM O. MCCOY
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,154,888.538 96.021
Withheld 18,406,482.750 3.979
TOTAL 462,561,371.288 100.000
GERALD C. MCDONOUGH
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 443,149,018.198 95.803
Withheld 19,412,353.090 4.197
TOTAL 462,561,371.288 100.000
MARVIN L. MANN
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,770,167.908 96.154
Withheld 17,791,203.380 3.846
TOTAL 462,561,371.288 100.000
THOMAS R. WILLIAMS
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 444,019,634.298 95.992
Withheld 18,541,736.990 4.008
TOTAL 462,561,371.288 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 435,395,650.683 94.127
Against 13,012,889.495 2.813
Abstain 14,152,831.110 3.060
TOTAL 462,561,371.288 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the number
of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
Affirmative 409,553,827.698 88.560
Against 31,050,994.330 6.714
Abstain 21,856,323.260 4.726
TOTAL 462,461,145.288 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the number
of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
Affirmative 162,785,427.340 90.048
Against 8,822,602.395 4.880
Abstain 9,168,640.670 5.072
TOTAL 180,776,670.405 100.000
PROPOSAL 4
To approve an amended management contract for the fund that would reduce
the management fee payable to FMR by the fund as FMR's assets under
management increase.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 154,251,638.510 85.327
Against 11,768,056.855 6.510
Abstain 14,756,975.040 8.163
TOTAL 180,776,670.405 100.000
PROPOSAL 5
Senior Securities - To add the ability to issue senior securities to the
extent permitted under the Investment Company Act of 1940.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 151,011,834.465 83.535
Against 14,440,065.160 7.988
Abstain 15,324,770.780 8.477
TOTAL 180,776,670.405 100.000
PROPOSAL 6
Borrowing - To amend the borrowing limitation to require a reduction in
borrowing if borrowings exceed the 33 1/3% limit for any reason rather than
solely because of a decline in net assets.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 150,249,449.500 83.113
Against 15,172,642.095 8.393
Abstain 15,354,578.810 8.494
TOTAL 180,776,670.405 100.000
PROPOSAL 7
Concentration - To standardize language and explicitly exclude "tax-exempt
obligations issued or guaranteed by a U.S. territory or possession or a
state or local government, or a political subdivision thereof " from the
limitation on industry concentration.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 152,584,176.335 84.405
Against 13,808,479.040 7.638
Abstain 14,384,015.030 7.957
TOTAL 180,776,670.405 100.000
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
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identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
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3
To review orders and mutual
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4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
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(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
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If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
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(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)
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TM
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1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
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INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER,
MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President -
INCOME FUND
George A. Fischer, Vice President -
INCOME FUND
Boyce Greer, Vice President -
MONEY MARKET FUND
Scott A. Orr, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
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SM
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SPARTAN(registered trademark)
(registered trademark)
PENNSYLVANIA
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
JUNE 30, 1997
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 17 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
PERFORMANCE 21 How the fund has done over time.
FUND TALK 23 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 25 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 26 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 31 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 35 Notes to the financial statements.
PROXY VOTING RESULTS 39
</TABLE>
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Through the first six months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them periodically. The
stock market rebounded strongly from its early spring correction to
continue on its record-setting pace, as seen by the roughly 20%
year-to-date gain by the Standard & Poor's 500 Index. The bond market
posted moderate returns over the first half of the year, as positive news
on the inflation front helped soften the effects of a hike in short-term
interest rates by the Federal Reserve Board in late March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits the fund earned
upon the sale of securities that have grown in value). You can also look at
the fund's income, as measured by the fund's yield, to measure performance.
If Fidelity had not reimbursed certain fund expenses, the past ten years
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Spartan Pennsylvania Municipal Income Fu 2.63% 7.55% 40.98% 122.49%
nd
Lehman Brothers Pennsylvania 3.06% 8.07% n/a n/a
Municipal Bond Index
Pennsylvania Municipal Debt Funds 2.88% 7.69% 38.35% 114.29%
Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050.
You can compare the fund's returns to the performance of the Lehman
Brothers Pennsylvania Municipal Bond Index - a total return benchmark for
Pennsylvania investment-grade municipal bonds with maturities of at least
one year. To measure how the fund's performance stacked up against its
peers, you can compare it to the Pennsylvania municipal debt funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months average
represents a peer group of 62 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Spartan Pennsylvania Municipal Income Fu 7.55% 7.11% 8.33%
nd
Lehman Brothers Pennsylvania 8.07% n/a n/a
Municipal Bond Index
Pennsylvania Municipal Debt Funds 7.69% 6.70% 7.91%
Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking the arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
1987/06/30 10000.00 10000.00
1987/07/31 10185.84 10102.00
1987/08/31 10203.97 10124.73
1987/09/30 9568.99 9751.43
1987/10/31 9547.21 9785.95
1987/11/30 9824.83 10041.46
1987/12/31 10006.24 10187.16
1988/01/31 10508.76 10550.03
1988/02/29 10682.33 10661.54
1988/03/31 10355.32 10537.87
1988/04/30 10418.36 10617.96
1988/05/31 10491.87 10587.27
1988/06/30 10699.94 10742.16
1988/07/31 10771.05 10812.20
1988/08/31 10788.67 10821.72
1988/09/30 11024.60 11017.59
1988/10/31 11344.04 11211.50
1988/11/30 11245.07 11108.80
1988/12/31 11428.57 11222.45
1989/01/31 11589.50 11454.53
1989/02/28 11489.93 11323.83
1989/03/31 11487.06 11296.77
1989/04/30 11784.02 11564.95
1989/05/31 11997.74 11805.16
1989/06/30 12186.25 11965.47
1989/07/31 12303.63 12128.32
1989/08/31 12187.64 12009.58
1989/09/30 12147.73 11973.79
1989/10/31 12315.30 12120.23
1989/11/30 12460.88 12332.34
1989/12/31 12549.06 12433.22
1990/01/31 12479.75 12374.41
1990/02/28 12590.29 12484.54
1990/03/31 12592.34 12488.29
1990/04/30 12407.39 12397.87
1990/05/31 12717.12 12668.52
1990/06/30 12832.77 12779.87
1990/07/31 13000.35 12967.74
1990/08/31 12812.04 12779.44
1990/09/30 12876.78 12786.73
1990/10/31 13062.63 13018.68
1990/11/30 13342.92 13280.49
1990/12/31 13452.43 13338.26
1991/01/31 13627.42 13517.26
1991/02/28 13706.08 13634.86
1991/03/31 13736.12 13639.76
1991/04/30 13951.81 13821.17
1991/05/31 14118.20 13944.04
1991/06/30 14048.00 13930.24
1991/07/31 14257.67 14099.91
1991/08/31 14453.45 14285.60
1991/09/30 14621.47 14471.60
1991/10/31 14747.78 14601.85
1991/11/30 14787.43 14642.59
1991/12/31 15133.04 14956.82
1992/01/31 15173.86 14990.92
1992/02/29 15182.04 14995.71
1992/03/31 15180.90 15001.26
1992/04/30 15340.06 15134.77
1992/05/31 15531.57 15312.91
1992/06/30 15782.06 15569.86
1992/07/31 16278.55 16036.65
1992/08/31 16108.92 15880.29
1992/09/30 16195.16 15984.15
1992/10/31 15946.24 15827.02
1992/11/30 16326.32 16110.48
1992/12/31 16512.24 16274.97
1993/01/31 16729.78 16464.25
1993/02/28 17385.74 17059.76
1993/03/31 17187.65 16879.44
1993/04/30 17355.02 17049.75
1993/05/31 17461.17 17145.57
1993/06/30 17756.81 17431.73
1993/07/31 17735.06 17454.57
1993/08/31 18180.13 17817.97
1993/09/30 18447.40 18020.92
1993/10/31 18456.65 18055.70
1993/11/30 18299.01 17896.63
1993/12/31 18688.58 18274.43
1994/01/31 18932.17 18483.12
1994/02/28 18472.48 18004.41
1994/03/31 17659.68 17271.27
1994/04/30 17751.61 17417.73
1994/05/31 17951.43 17568.74
1994/06/30 17921.84 17461.40
1994/07/31 18210.75 17781.46
1994/08/31 18273.01 17842.99
1994/09/30 18013.89 17581.05
1994/10/31 17703.90 17268.81
1994/11/30 17282.82 16956.59
1994/12/31 17747.48 17329.81
1995/01/31 18291.19 17825.09
1995/02/28 18844.55 18343.45
1995/03/31 19110.85 18554.21
1995/04/30 19167.63 18576.11
1995/05/31 19679.71 19168.87
1995/06/30 19487.27 19002.10
1995/07/31 19657.91 19182.24
1995/08/31 19865.77 19425.47
1995/09/30 20089.25 19548.43
1995/10/31 20335.03 19832.67
1995/11/30 20654.39 20161.69
1995/12/31 20841.95 20355.45
1996/01/31 21047.48 20509.13
1996/02/29 20894.44 20370.69
1996/03/31 20607.33 20110.36
1996/04/30 20513.81 20053.44
1996/05/31 20482.22 20045.42
1996/06/30 20686.47 20263.72
1996/07/31 20874.02 20448.12
1996/08/31 20881.91 20443.21
1996/09/30 21129.45 20729.41
1996/10/31 21359.60 20963.86
1996/11/30 21751.83 21347.50
1996/12/31 21678.97 21257.84
1997/01/31 21707.82 21298.02
1997/02/28 21892.64 21493.54
1997/03/31 21606.75 21207.03
1997/04/30 21756.62 21384.53
1997/05/31 22035.71 21706.15
1997/06/30 22248.94 21937.32
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Spartan Pennsylvania Municipal Income Fund on June 30, 1987. As the
chart shows, by June 30, 1997, the value of the investment would have grown
to $22,249 - a 122.49% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index - a total return
performance benchmark for investment-grade municipal bonds with maturities
of at least one year - did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 would have grown to $21,937 - a
119.37% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally
move in the opposite
direction of interest rates. In
turn, the share price, return
and yield of a fund that
invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30,
1997 1996 1995 1994 1993 1992
Dividend returns 2.44% 5.01% 6.52% 5.73% 6.68% 7.00%
Capital appreciation 0.19% -1.00% 10.91% -10.77% 6.49% 2.11%
returns
Total returns 2.63% 4.01% 17.43% -5.04% 13.17% 9.11%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested, if any. For the periods through December 31,
1996, capital appreciation and total returns include the effect of the $5
account closeout fee on an average size account.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.11(cents) 25.14(cents) 51.19(cents)
Annualized dividend rate 4.75% 4.86% 4.90%
30-day annualized yield 4.69% - -
30-day annualized tax-equivalent yield 7.54% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $10.53 over
the past one month, $10.44 over the past six months and $10.44 over the
past one year, you can compare the fund's income over these three periods.
The 30-day annualized YIELD is a standard formula for all funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have to
earn on a taxable investment to equal the fund's tax-free yield, if you're
in the 37.79% combined effective 1997 federal and state tax bracket. A
portion of the fund's income may be subject to the federal alternative
minimum tax.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS:
Jonathan Short became Portfolio Manager of Spartan Pennsylvania Municipal
Income Fund on April 1, 1997.
Q. HOW DID THE FUND PERFORM, JON?
A. For the six-month period that ended June 30, 1997, the fund had a total
return of 2.63%. To get a sense of how the fund did relative to its
competitors, the Pennsylvania municipal debt funds average returned 2.88%
for the same six-month period, as tracked by Lipper Analytical Services.
Additionally, the Lehman Brothers Pennsylvania Municipal Bond Index
returned 3.06%. For the 12-month period that ended June 30, 1997, the fund
had a total return of 7.55%, the Pennsylvania municipal debt funds average
returned 7.69%, according to Lipper, and the Lehman Brothers index returned
8.07%.
Q. THE BOND MARKET WAS SOMEWHAT JITTERY DURING THE SIX-MONTH PERIOD. WHAT
CAUSED ALL THE UNCERTAINTY AND HOW DID MUNICIPALS FARE IN THE MIDST OF IT?
A. The main reason for the bond market's skittishness was the fear of
inflation. Worried that the economy was growing at too quick a pace - and
much faster than anticipated - investors sent Treasury bond yields higher
and prices lower. Bond investors, of course, react negatively to even the
threat of higher inflation because it can eat away at the fixed-income
payments their bonds generate. While there weren't any tangible signs that
inflation was on the upswing, investors continued to be concerned about the
future and whether the Federal Reserve Board would raise interest rates as
an anti-inflationary measure sometime down the road. Municipals, however,
fared better during this troubled period, and their yields generally ended
the period where they had started it. Municipals' strong performance can be
attributed to the fact that the supply of them was limited while demand
increased. As a result, tax-free bonds generally were able to hold their
ground better than many taxable fixed-income investments, including
Treasuries.
Q. ARE THERE SIGNIFICANT DIFFERENCES BETWEEN YOUR INVESTMENT STYLE AND THAT
OF THE FUND'S PREVIOUS MANAGER?
A. No, there aren't. While I did buy and sell bonds based on what I
believed their value to be relative to other bonds available in the
marketplace, my basic strategy is the same as the previous manager's
strategy. I continued to keep the fund's duration - which measures how
sensitive it is to changes in interest rates - in line with the
Pennsylvania municipal market as a whole, as reflected by the fund's
benchmark index. In theory, I guess it's possible to accurately predict
where interest rates are headed. But practically speaking, it has proved to
be very difficult to do so with consistency over any meaningful stretch of
time. By maintaining a fairly consistent duration, I hope to deliver
better-than-market returns by avoiding whipsaws when the market goes
through its ups and downs.
Q. WHAT CHANGES HAVE YOU MADE SINCE TAKING OVER?
A. I changed the way the fund's investments were allocated among bonds with
various maturities, specifically by adding more intermediate-term bonds
with maturities of between 10 and 16 years. In my view, longer-term bonds -
with maturities of more than 20 years - didn't offer an adequate amount of
yield to compensate for their heightened sensitivity to interest rate
changes. Generally speaking, the longer a bond's maturity, the more its
price will fall when interest rates rise and vice versa. When I took over
the fund and through the end of the period, I felt that
intermediate-maturity bonds offered the best reward given their risk.
What's more, long-term bonds tend to be callable, which means they can be
redeemed by their issuer before maturity. Callable bonds tend to rise less
in up markets and fall more in down markets. I like the fact that
intermediate-maturity bonds, on the other hand, typically aren't
susceptible to being called.
Q. AT THE END OF THE PERIOD, ONLY ABOUT 9% OF THE FUND'S INVESTMENTS WERE
IN BONDS WITH CREDIT RATINGS OF BAA AS JUDGED BY MOODY'S INVESTORS SERVICE.
WHY DID THE FUND HAVE SO LITTLE INVESTED IN HIGHER-YIELDING BAA-RATED
BONDS?
A. Generally speaking, bonds rated Baa carry a fairly large amount of
additional yield over higher-rated bonds in order to compensate investors
for the additional credit risk they carry - the risk of the issuer
defaulting on its debt, in other words. For a variety of reasons having to
do with the strength of the economy, the improving creditworthiness of
various municipal issuers and the scarcity of higher-yielding bonds, the
difference in yield between Baa-rated and higher-rated municipals remained
small. To give you an example, the yield on a 15-year Aaa-rated
Pennsylvania general obligation bond (GO) was 5.35%, while a Baa-rated
15-year GO offered a yield of 5.75% at the end of the period. In my view,
Baa-rated bonds didn't offer adequate reward in the form of yield to
compensate for their added risks. What's more, I was able to maintain the
fund's high credit quality without sacrificing much yield.
Q. WHAT'S YOUR OUTLOOK?
A. From a supply and demand standpoint, I'm optimistic about municipals. I
don't expect to see a tremendous amount of new bonds issued, and the
increase in supply we're likely to see will be easily digested if demand
remains firm. How municipals fare over the next year will depend heavily on
the direction of interest rates. That said, we may continue to see some
volatility in the bond market as long as there are conflicting signs about
the economy and inflation trends.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Pennsylvania personal
income taxes by investing
normally in investment-grade
municipal securities
FUND NUMBER: 402
TRADING SYMBOL: FPXTX
START DATE: August 6, 1986
SIZE: as of June 30, 1997,
more than $261 million
MANAGER: Jonathan Short,
since April 1997; manager,
various Fidelity and Spartan
Municipal funds; joined
Fidelity in 1990
(checkmark)
JONATHAN SHORT ON THE
PENNSYLVANIA ECONOMY:
"Over the past year, the state
of Pennsylvania showed
several signs of economic
improvement. The strongest
evidence of economic
improvement came in the
form of job growth, which
increased about two percent
over the past year. I think it's a
positive sign that the state's
job growth is broad based,
meaning there were
employment gains in the
manufacturing, as well as in
the retail and service sectors.
Because economic growth has
been stronger than expected,
the state recently posted a
$500 million budgetary
surplus, which was another
positive development. The
main question from here is
how will consolidation among
some of Pennsylvania's major
employers affect the state's
employment outlook? I
believe that the merger of Bell
Atlantic and Nynex and the
acquisition of Conrail by
Norfolk Southern & CSX
could lead to job losses.
What's more, business taxes
are still high relative to other
surrounding states, even after
recent reductions in the
state's corporate tax rate.
High corporate taxes could
impede the state's ability to
attract new business."
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE MARKET SECTORS AS OF JUNE 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
General Obligation 35.0 38.2
Water & Sewer 13.3 11.1
Health Care 10.1 7.1
Education 9.7 8.8
Escrowed/Pre-Refunded 9.2 10.8
AVERAGE YEARS TO MATURITY AS OF JUNE 30, 1997
6 MONTHS AGO
Years 12.5 12.7
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF JUNE 30, 1997
6 MONTHS AGO
Years 6.7 7.1
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31, 1996
Aaa 61.0%
Aa, A 28.0%
Baa 9.2%
Non-rated 1.0%
Short-term
investments 0.8%
Aaa 55.8%
Aa, A 28.3%
Baa 11.8%
Non-rated 3.4%
Short-term
investments 0.7%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 2.2
Row: 1, Col: 3, Value: 9.0
Row: 1, Col: 4, Value: 27.8
Row: 1, Col: 5, Value: 59.0
Row: 1, Col: 1, Value: 1.5
Row: 1, Col: 2, Value: 3.4
Row: 1, Col: 3, Value: 11.8
Row: 1, Col: 4, Value: 28.3
Row: 1, Col: 5, Value: 55.0
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS. AMOUNTS
SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL BONDS - 99.2%
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PENNSYLVANIA - 98.8%
Allegheny County Gen. Oblig. (Cap. Appreciation)
Series 18, 0% 4/1/11 (MBIA Insured) Aaa $ 2,560,000 $ 1,235,200
Allegheny County Higher Ed. Bldg. Auth. Rev.
(Duquesne Univ. Proj.) 6.50% 3/1/10
(AMBAC Insured) Aaa 400,000 447,500
Allegheny County Hosp. Dev. Auth. Rev. Rfdg.
(Univ. of Pittsburgh Medical Center)
5.55% 4/1/12 (MBIA Insured) Aaa 2,845,000 2,877,006
Allegheny County Ind. Dev. Auth. Rev.
(YMCA Pittsburgh Proj.) Series 1990,
8.75% 3/1/10 - 2,435,000 2,602,406
Allegheny County Residential Fin. Auth.
Mtg. Single-Family Rev.:
Series H, 8% 6/1/17 (GNMA Coll.) Aaa 185,000 190,781
Series 1990, 7.95% 6/1/23 (GNMA Coll.) (c) Aaa 1,320,000 1,381,050
Allegheny County San. Auth. Swr. Rev.
0% 12/1/12 (FGIC Insured) (Escrowed
to Maturity) (d) Aaa 2,260,000 997,225
Bethlehem Wtr. Auth. Rev. Rfdg. 4.875%
11/15/14 (MBIA Insured) Aaa 3,700,000 3,417,875
Delaware County Auth. Hosp. Rev.:
(Crozer-Chester):
6% 12/15/09 Baa1 1,000,000 1,007,500
6% 12/15/20 Baa1 6,700,000 6,616,250
Delaware County Gen. Oblig. Rfdg.
5.30% 11/15/01 Aa 2,200,000 2,271,500
Delaware County Ind. Dev. Auth. Rfdg. Resource
Recovery Facs. Series A, 6.10% 7/1/13 Baa1 1,300,000 1,324,375
Erie County Series B, 6.75% 9/1/16 (FGIC
Insured) (Pre-Refunded 9/1/01 @ 100) (d) Aaa 1,000,000 1,086,250
Harrisburg Auth. Rev. (Pooled Bond Program)
Series I, 5.625% 4/1/15 (MBIA Insured) Aaa 6,000,000 6,052,500
Lehigh County Gen. Purpose Auth. Series B, 9%
7/1/15 (Pre-Refunded to 11/15/01 @ 102) (d) Aaa 1,020,000 1,020,000
Meadville Rfdg. Series B, 6% 10/1/05
(AMBAC Insured) Aaa 3,210,000 3,462,783
Northumberland County Auth. Commonwealth
Lease Rev. 0% 10/15/10 (MBIA Insured)
(Escrowed to Maturity) (d) Aaa 1,000,000 493,750
Pennsbury School Dist. Rfdg.:
6% 8/15/05 (FGIC Insured) Aaa 1,605,000 1,741,425
6.80% 8/15/14 (FGIC Insured)
(Pre-Refunded to 8/15/04 @ 100) (d) Aaa 1,025,000 1,153,125
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Convention Ctr. Auth. Rev.
Rfdg. Series A:
6.60% 9/1/09 (MBIA Insured) Aaa $ 9,150,000 $ 10,042,125
6.70% 9/1/14 (MBIA Insured) Aaa 3,965,000 4,416,019
6.75% 9/1/19 (MBIA Insured) Aaa 2,670,000 2,970,375
Pennsylvania Gen. Oblig.:
Series 1:
Rfdg. 5% 4/15/13 A1 7,665,000 7,339,238
Rfdg. 5.30% 5/1/04 A1 2,500,000 2,578,125
6% 9/15/01 A1 1,100,000 1,164,625
6.125% 9/15/03 A1 2,000,000 2,142,500
Series 2:
(Cap. Appreciation) 0% 7/1/07
(AMBAC Insured) Aaa 1,770,000 1,079,700
Rfdg. 5.10% 6/15/03 (MBIA Insured) Aaa 1,000,000 1,022,500
5.50% 7/1/01 A1 4,135,000 4,290,063
5.60% 7/1/02 A1 1,000,000 1,046,250
6.25% 7/1/10 A1 2,000,000 2,207,500
6.25% 7/1/11 A1 1,200,000 1,324,500
Series 3:
6.10% 11/15/03 (AMBAC Insured)
(Pre-Refunded to 11/15/01 @ 101.50) (d) Aaa 10,310,000 11,096,138
6.10% 11/15/04 (FGIC Insured) (e) Aaa 1,000,000 1,085,000
Pennsylvania Higher Ed. Assistance Agcy.
Student Loan Rev.:
6.173% 3/1/22 (AMBAC Insured) (c) Aaa 4,000,000 4,045,000
6.854% 9/3/26 (AMBAC Insured) (c) Aaa 2,000,000 2,085,000
Pennsylvania Higher Edl. Facs. Auth.:
College & Univ. Rev. Rfdg.:
(Carnegie-Mellon Univ.) 6% 11/1/05 AA- 1,000,000 1,087,500
(Univ. of Pennsylvania):
Series A:
7% 9/1/01 Aa2 2,000,000 2,190,000
6.50% 9/1/02 Aa2 2,750,000 2,990,625
6.50% 9/1/04 Aa2 2,650,000 2,924,938
5.90% 9/1/15 Aa2 1,200,000 1,230,000
Series B:
6.50% 9/1/02 Aa2 1,950,000 2,110,875
6.50% 9/1/04 Aa2 2,100,000 2,317,875
7% 9/1/05 Aa2 2,000,000 2,292,500
Health Svc. Rev. 5.35% 1/1/08 Aa 4,000,000 4,085,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Hsg. Fin. Agcy.:
Single-Family Mtg.:
Series 51, 5.65% 4/1/20 (c) Aa $ 2,875,000 $ 2,896,563
Series 52B, 5.55% 10/1/12 (c) Aa 1,580,000 1,603,700
Series 53A, 5.40% 10/1/27 (c) Aa 1,000,000 1,008,750
Series 54A, 5.375% 10/1/28 (c) Aa 500,000 504,375
Series V, 7.80% 4/1/16 Aa 500,000 516,875
6.10% 10/1/13 (c) Aa 5,000,000 5,081,250
Pennsylvania Ind. Dev. Auth. Econ. Dev. Rev.:
7% 7/1/06 (AMBAC Insured) Aaa 1,000,000 1,146,250
7% 1/1/07 (AMBAC Insured) Aaa 1,500,000 1,728,750
7% 7/1/07 (AMBAC Insured) Aaa 2,650,000 3,070,688
5.80% 1/1/08 (AMBAC Insured) Aaa 2,000,000 2,130,000
5.80% 7/1/09 (AMBAC Insured) Aaa 1,295,000 1,375,938
Pennsylvania Intergovernmental Coop Auth.
Spl. Tax Rev.:
Rfdg. Series A, 5% 6/15/13 A 1,750,000 1,623,125
(Philadelphia City Funding Prog.):
6.75% 6/15/21 (Pre-Refunded to
6/15/05 @ 100) (d) Aaa 2,190,000 2,474,700
6.80% 6/1/22 (Pre-Refunded to
6/15/02 @ 100) (d) Aaa 2,000,000 2,197,500
Pennsylvania Turnpike Commission Rev.:
Rfdg. Series P, 5.70% 12/1/05 A1 1,460,000 1,525,700
Series L, 6.25% 6/1/11 (AMBAC Insured) Aaa 3,000,000 3,195,000
Series J, 7.20% 12/1/17 (FGIC Insured)
(Pre-Refunded to 12/1/01 @ 102) (d) Aaa 1,000,000 1,125,000
Series N, 5.50% 12/1/17 A1 5,000,000 4,887,500
Philadelphia Arpt. Rev. Rfdg. 6% 6/15/08
(FGIC Insured) (c) (f) Aaa 3,000,000 3,120,000
Philadelphia Gas Works Rev. Rfdg.
Series A-14, 6.375% 7/1/26 Baa1 5,905,000 6,104,294
Philadelphia Gen. Oblig.:
Rfdg. 5.125% 5/15/03 (FGIC Insured) Aaa 8,000,000 8,130,000
6.25% 5/15/10 (MBIA Insured) Aaa 3,200,000 3,476,000
Philadelphia Hosp. & Higher Ed. Facs.
Auth. Rev. Rfdg.:
6.05% 7/1/04 Baa2 2,500,000 2,600,000
6.15% 7/1/05 Baa2 2,100,000 2,194,500
6.25% 7/1/06 Baa2 2,600,000 2,726,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Philadelphia Muni. Auth. Rev. (Cap.
Appreciation) (Muni. Svcs. Bldg. Lease):
0% 3/15/11 (FSA Insured) Aaa $ 1,000,000 $ 475,000
0% 3/15/14 (FSA Insured) Aaa 7,360,000 2,888,800
Philadelphia Redev. Auth. Hsg. Rev. Sub-
Series 3, 8.125% 8/1/26 (GNMA Coll.) Aaa 45,000 47,445
Philadelphia Wtr. & Swr. Rev. (Cap. Appreciation)
14th Series, 0% 10/1/08 (MBIA Insured) Aaa 5,300,000 2,961,375
Philadelphia Wtr. & Wastewtr. Rev.:
6.75% 8/1/04 (MBIA Insured) Aaa 2,085,000 2,335,200
6.75% 8/1/05 (MBIA Insured) Aaa 3,110,000 3,502,638
5.65% 6/15/12 (FGIC Insured) Aaa 7,000,000 6,982,500
Pittsburgh Gen. Oblig. Series A:
5.875% 9/1/00 (MBIA Insured) Aaa 1,315,000 1,374,175
5.50% 9/1/14 (AMBAC Insured) Aaa 5,310,000 5,422,838
Pittsburgh School Dist. (Cap. Appreciation)
Series C:
0% 8/1/07 (AMBAC Insured) Aaa 2,610,000 1,572,525
0% 8/1/08 (AMBAC Insured) Aaa 2,000,000 1,140,000
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys.
Rev. Rdfg. Series A:
0% 9/1/04 (FGIC Insured)
(Escrowed to Maturity) (d) Aaa 5,000,000 3,518,750
6.50% 9/1/13 (FGIC Insured) Aaa 10,000,000 11,262,500
4.75% 9/1/16 (FGIC Insured) Aaa 3,000,000 2,700,000
Scranton Parking Auth. Parking Rev. 8.125%
9/15/14, LOC Northeastern Bank
(Pre-Refunded to 9/15/98 @ 100) (d) A 500,000 523,125
Southeastern Pennsylvania Transp. Auth. Spl. Rev.:
Series A:
6.50% 3/1/03 (FGIC Insured) Aaa 2,520,000 2,753,100
6.50% 3/1/04 (FGIC Insured) Aaa 1,485,000 1,633,500
5.35% 3/1/09 (FGIC Insured) Aaa 4,000,000 4,070,000
Wilson Area School Dist. (Cap. Appreciation):
0% 5/15/09 (AMBAC Insured) Aaa 3,275,000 1,752,125
0% 5/15/10 (AMBAC Insured) Aaa 3,280,000 1,656,400
0% 5/15/11 (AMBAC Insured) Aaa 3,500,000 1,662,500
Wyoming Ind. Dev. Auth. Poll. Cont. Rev. Rfdg.
(Proctor & Gamble Paper Proj.) 5.55%
5/1/10 (c) Aa2 5,000,000 5,162,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (C) AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
York City Swr. Auth. Swr. Rev. (Cap.
Appreciation) 0% 12/1/12 (MBIA Insured) Aaa $ 3,235,000 $ 1,374,875
253,757,551
PUERTO RICO - 0.4%
Puerto Rico Commonwealth Urban Renewal &
Hsg. Corp. Rfdg. 7.875% 10/1/04 Baa 1,000,000 1,081,250
TOTAL MUNICIPAL BONDS
(Cost $246,576,741) 254,838,801
MUNICIPAL NOTES (B) - 0.8%
PENNSYLVANIA - 0.8%
Allegheny County Hosp. Dev. Auth. Health Center
Rev. Series 1990-B, 4.20%, VRDN
(MBIA Insured) VMIG 1 1,100,000 1,100,000
Pennsylvania Higher Edl. Facs. Rev.
(Carnegie-Mellon Univ.) 4.15% VRDN (BPA
Morgan Guaranty Trust Co., New York) A-1+ 1,000,000 1,000,000
TOTAL MUNICIPAL NOTES
(Cost $2,100,000) 2,100,000
TOTAL INVESTMENTS - 100%
(Cost $248,676,741) 256,938,801
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SOLD
81 Municipal Bond Contracts Sept. 1997 $ 9,436,500 $ 133,422
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 3.7%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
5. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
6. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
7. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
8. Security collateralized by an amount sufficient to pay interest and
principal.
9. A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $265,825.
10. Restricted security - Investment in securities not registered under the
Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on the holding is as follows:
ACQUISITION
SECURITY DATE COST
Philadelphia
Arpt. Rev. Rfdg.
6% 6/15/08
(FDIC Insured) 6/27/97 $ 3,120,000
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 88.3% AAA, AA, A 88.5%
Baa 9.2% BBB 8.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 1.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 35.0%
Water and Sewer 13.3
Health Care 10.1
Education 9.7
Escrowed/Pre-Refunded 9.2
Housing 5.2
Transportation 5.0
Others (individually less than 5%) 12.5
TOTAL 100.0%
INCOME TAX INFORMATION
At June 30, 1997, the aggregate cost of investment securities for income
tax purposes was $248,676,741. Net unrealized appreciation aggregated
$8,262,060, of which $8,369,623 related to appreciated investment
securities and $107,563 related to depreciated investment securities.
At December 31, 1996, the fund was required to defer approximately
$1,726,000 of losses on futures contracts.
SPARTAN PENNSYLVANIA MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $248,676,741) - $ 256,938,801
See accompanying schedule
Cash 11,351
Receivable for investments sold 4,563,215
Interest receivable 3,481,315
Redemption fees receivable 14
Receivable for daily variation on futures contracts 25,313
TOTAL ASSETS 265,020,009
LIABILITIES
Payable for investments purchased $ 3,132,690
Payable for fund shares redeemed 81,288
Distributions payable 249,344
Accrued management fee 118,288
Other payables and accrued expenses 3,229
TOTAL LIABILITIES 3,584,839
NET ASSETS $ 261,435,170
Net Assets consist of:
Paid in capital $ 254,438,275
Accumulated undistributed net realized gain (loss) on (1,398,587)
investments
Net unrealized appreciation (depreciation) on 8,395,482
investments
NET ASSETS, for 24,872,319 shares outstanding $ 261,435,170
NET ASSET VALUE, offering price and redemption price $10.51
per share ($261,435,170 (divided by) 24,872,319 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTEREST INCOME $ 7,070,869
EXPENSES
Management fee $ 718,355
Non-interested trustees' compensation 1,136
Total expenses before reductions 719,491
Expense reductions (258) 719,233
NET INTEREST INCOME 6,351,636
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 940,842
Futures contracts (597,540) 343,302
Change in net unrealized appreciation (depreciation) on:
Investment securities 103,049
Futures contracts 117,978 221,027
NET GAIN (LOSS) 564,329
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 6,915,965
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 6,351,636 $ 13,767,988
Net interest income
Net realized gain (loss) 343,302 2,378,566
Change in net unrealized appreciation (depreciation) 221,027 (5,809,290)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 6,915,965 10,337,264
FROM OPERATIONS
Distributions to shareholders (6,351,636) (13,767,988)
From net interest income
From net realized gain - (1,824,023)
TOTAL DISTRIBUTIONS (6,351,636) (15,592,011)
Share transactions 11,025,820 21,774,414
Net proceeds from sales of shares
Reinvestment of distributions 4,759,517 11,734,811
Cost of shares redeemed (25,896,266) (45,710,814)
Redemption fees 4,740 8,045
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (10,106,189) (12,193,544)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (9,541,860) (17,448,291)
NET ASSETS
Beginning of period 270,977,030 288,425,321
End of period $ 261,435,170 $ 270,977,030
OTHER INFORMATION
Shares
Sold 1,054,658 2,081,780
Issued in reinvestment of distributions 456,121 1,121,799
Redeemed (2,481,901) (4,380,499)
Net increase (decrease) (971,122) (1,176,920)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30, 1997
(UNAUDITED) 1996 1995 1994 1993 D 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 10.490 $ 10.670 $ 9.620 $ 11.130 $ 10.590 $ 10.370
beginning of period
Income from .251 .520 .590 .652 .679 .693
Investment
Operations
Net interest income
Net realized and .020 (.109) 1.049 (1.201) .679 .219
unrealized gain
(loss)
Total from .271 .411 1.639 (.549) 1.358 .912
investment
operations
Less Distributions (.251) (.520) (.590) (.652) (.679) (.693)
From net interest
income
From net - (.071) - (.310) (.140) -
realized gain
Total distributions (.251) (.591) (.590) (.962) (.819) (.693)
Redemption fees .000 .000 .001 .001 .001 .001
added to paid in
capital
Net asset value, end $ 10.510 $ 10.490 $ 10.670 $ 9.620 $ 11.130 $ 10.590
of period
TOTAL RETURN B 2.63% 4.02% 17.44% (5.04) 13.18% 9.11
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 261,435 $ 270,977 $ 288,425 $ 241,729 $ 306,246 $ 242,375
period (000 omitted)
Ratio of expenses to .55% .55% .55% .55% .55% .55
average net assets A %
Ratio of expenses to .55% .53% .55% .55% .55% .55
average net assets A C %
after expense
reductions
Ratio of net interest 4.86% 4.98% 5.73% 6.33% 6.13% 6.65
income to average A %
net assets
Portfolio turnover rate 20% 53% 49% 26% 38% 8
A %
</TABLE>
11. ANNUALIZED
12. TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN.
13. FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
14. EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income, and
capital gains (the profits earned upon the sale of securities that have
grown in value), and the effect of the fund's $5 account closeout fee.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses, the past five and 10
years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Spartan Pennsylvania Municipal 1.63% 3.26% 15.38% 48.38%
Money Market
All Tax-Free Money Market Funds Average 1.53% 3.04% 14.13% 44.04%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the all tax-free money market funds average, which reflects
the performance of all tax-free money market funds tracked by IBC Financial
Data, Inc. The past six months average represents a peer group of 430
mutual funds. (The periods covered by IBC Financial Data, Inc. numbers are
the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Spartan Pennsylvania Municipal 3.26% 2.90% 4.03%
Money Market
All Tax-Free Money Market Funds Averag 3.04% 2.68% 3.71%
e
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year.
YIELDS
6/30/97 3/31/97 12/30/96 9/30/96 7/1/96
Spartan Pennsylvania 3.68% 3.10% 3.54% 3.39% 3.08%
Municipal Money Market
All Tax-Free 3.48% 2.93% 3.32% 3.18% 2.89%
Money Market Funds
Average
Spartan Pennsylvania 5.92% 4.98% 5.69% 5.45% 4.95%
Municipal Money Market -
Tax-equivalent
Row: 1, Col: 1, Value: 4.18
Row: 1, Col: 2, Value: 3.95
Row: 2, Col: 1, Value: 3.08
Row: 2, Col: 2, Value: 2.87
Row: 3, Col: 1, Value: 3.08
Row: 3, Col: 2, Value: 2.89
Row: 4, Col: 1, Value: 3.39
Row: 4, Col: 2, Value: 3.18
Row: 5, Col: 1, Value: 3.54
Row: 5, Col: 2, Value: 3.32
Spartan Pennsylvania
Municipal Money
Market
All Tax-Free Money
Market Funds
Average
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the all tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1997 federal
and state income tax rate of 37.79%. A portion of the fund's income may be
subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more
meaningful. Keep in mind that
the U.S. Government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money fund will maintain a $1
share price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS:
Diane McLaughlin became Portfolio Manager of Spartan Pennsylvania Municipal
Money Market Fund on July 1, 1997, after the period ended.
Q. DIANE, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST SIX MONTHS?
A. While the Federal Reserve Board in mid-1996 had stated its bias toward
raising short-term interest rates to dampen economic growth and head off
inflation, it had not acted by January 1997, and the market became
complacent with steady Fed policy. That sentiment changed in late February,
however, after Fed Chairman Alan Greenspan's Humphrey-Hawkins testimony
before Congress. Greenspan outlined his concerns that low unemployment
might exert upward pressure on the economy's core inflation. More
importantly, he mentioned the possibility that the Fed might raise the rate
banks charge each other for overnight loans - known as the fed funds target
rate - from the 5.25% level it had maintained since January 1996. The
rationale behind such a move would be to raise rates to curb inflation
before it passed through to the consumer. Shortly after Greenspan's
remarks, data for February showed an additional 293,000 non-farm jobs had
been added to the economy, lowering unemployment to 5.3%. Interest rates
rose as the Fed's March 25 Open Market Committee meeting approached and
fears heightened that there would be a shift in Fed policy. At that
meeting, the Fed raised the fed funds target rate by 0.25% to 5.50% as
expected.
Q. HOW HAS THE ECONOMY PERFORMED SINCE THE FED'S MARCH MEETING?
A. First quarter 1997 data indicated continued economic strength, with
gross domestic product growing at a stronger-than-expected annual rate of
nearly 6%. In addition, in April unemployment fell to 4.9%, the lowest
level since 1973. Since then, economic data has shown signs of a slowdown
during the second quarter. Perhaps more importantly, inflation continues to
remain in check. In fact, in the first half of the year there were six
consecutive monthly drops in the producer price index, and the first half
of the year's consumer price index was the lowest in 10 years.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. Early in the period, the fund's maturity was at 55 days. As strong
first-quarter economic data was released, however, the fund's maturity
rolled down in anticipation of higher rates. The maturity reached a low of
20 days in mid-June, and ended the period at 31 days. The fund's maturity
increased toward the end of the period because of the purchase of one-year
paper during the municipal market's annual note borrowing season. The rates
offered by these securities typically increase as most borrowers issue
notes at the same time, causing a temporary imbalance between supply and
demand. Prior to the purchase of these longer securities, the fund didn't
give up yield by having a shorter maturity in spite of the lack of an
increase in rates by the Fed. In fact, the fund actually picked up yield by
having a larger percentage invested in variable rate demand notes (VRDNs) -
variable-rate securities that can be redeemed on short notice, typically
one or seven days. Year-to-date, these VRDNs have been priced at
historically attractive ratios relative to the targeted fed funds rate.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on June 30, 1997, was 3.68%, compared to
3.56% six months ago. The latest yield was the equivalent of a taxable
yield of 5.92% for Pennsylvania investors in the 37.79% combined federal
and state tax bracket. The fund's total return during the six-month period
was 1.63%. That beat the total return of 1.53% for the all tax-free money
market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The Fed may not need to raise short-term rates further if the pace of
economic growth persists without any significant signs of inflation. I will
probably purchase more one-year notes as the municipal borrowing season
continues, but will keep the fund's maturity relatively neutral. This
position will allow me to extend the fund's average maturity with
higher-yielding notes if a pick-up in economic growth in the third and
fourth quarters leads to price increases and further action by the Fed.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to seek high current
income exempt from federal
and Pennsylvania state
income tax by investing in
high-quality, short-term
municipal money market
securities, while maintaining
a $1.00 share price
FUND NUMBER: 401
TRADING SYMBOL: FPTXX
START DATE: August 6, 1986
SIZE: as of June 30, 1997,
more than $225 million
MANAGER: Diane
McLaughlin, since July 1997;
manager, various Fidelity
and Spartan municipal
money market funds; joined
Fidelity in 1992
(checkmark)
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND % OF FUND % OF FUND
ASSETS ASSETS ASSETS
6/30/97 12/31/96 6/30/96
0 - 30 85 67 83
31 - 90 7 12 3
91 - 180 1 3 7
181 - 397 7 18 7
WEIGHTED AVERAGE MATURITY
6/30/97 12/31/96 6/30/96
Spartan Pennsylvania 31 days 55 days 44 days
Municipal
Money Market Fund
All Tax-Free Money Market 44 days 51 days 50 days
Funds Average *
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF JUNE 30, 1997 AS OF DECEMBER 31, 1996
Row: 1, Col: 1, Value: 5.0
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 13.0
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 38.0
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 18.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 65.0
Variable rate
demand notes
(VRDNs) 78%
Commercial paper
(including
CP mode) 13%
Municipal
notes 4%
Other 5%
Variable rate
demand notes
(VRDNs) 66%
Commercial paper
(Including
CP mode) 15%
Municipal
notes 18%
Other 1%
* SOURCE: IBC'S MONEY FUND SOURCE(registered trademark)
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - 100%
Allegheny County Hosp. Dev. Auth. Rev.
(St. Margaret Mem. Hosp.) Series 1992 A,
4.40%, LOC Mellon Bank, NA, VRDN $ 8,865,000 $ 8,865,000
Allegheny County Ind. Dev. Auth. Ind. Dev. Rev.
(Union Elec. Steel Co. Proj.) :
Series 1996 A, 4.40%, LOC PNC Bank, NA,
VRDN (b) 3,120,000 3,120,000
Series 1996 B, 4.40%, LOC PNC Bank, NA,
VRDN (b) 500,000 500,000
Allegheny County Ind. Dev. Auth.:
(R.I. Lampus Co. Proj.) Series 1997 A, 4.40%,
LOC Nat'l. City Bank of Pennsylvania, VRDN (b) 2,560,000 2,560,000
(Doren, Inc. Proj.) Series 1997 C, 4.40%, LOC Nat'l.
City Bank of Pennsylvania, VRDN (b) 2,325,000 2,325,000
Beaver County Ind. Dev. Auth. Poll. Cont. Rev. (Duquesne
Lt. Co. Beaver Valley Proj.) Series 1990 B, 4.05%,
LOC Barclays PLC, VRDN (b) 600,000 600,000
Berks County Ind. Dev. Auth. Mfg. Facs. Rev.:
(The Bachman Co. Proj.) Series 1994, 4.45%,
LOC Corestates Bank, VRDN (b) 2,310,000 2,310,000
(Grafika Commercial Printing, Inc.) Series 1995,
4.45%, LOC Corestates Bank, VRDN (b) 1,655,000 1,655,000
Berks County Ind. Dev. Auth. Facs. Rev.
(RAM Industries, Inc.) Series 1996, 4.45%,
LOC Corestates Bank, VRDN (b) 3,200,000 3,200,000
Berks County Ind. Dev. Auth. Rev.:
Bonds (Citizens Utilities Co. Proj.) Series 1996
3.85% 8/12/97 CP mode (b) 4,200,000 4,200,000
(Construction Fastener Proj.) Series 1996 B,
4.45%, LOC Corestates Bank, VRDN (b) 1,030,000 1,030,000
Bucks County Ind. Dev. Auth. (Associates Proj.)
Series 1993, 4.45%, LOC Corestates Bank, VRDN (b) 1,290,000 1,290,000
Butler County Ind. Dev. Auth. (Armco, Inc. Proj.) Series 1996 A,
4.40%, LOC Chase Manhattan, VRDN (b) 1,400,000 1,400,000
Carbon County Ind. Dev. Auth. Resource Recovery Rev.
Bonds (Panther Creek Partners Proj.):
Series 1990 A, 3.90% 7/11/97, LOC Nat'l.
Westminster Bank, PLC, CP mode (b) 2,800,000 2,800,000
Series 1990 B, 3.85% 7/22/97, LOC Nat'l.
Westminster Bank, PLC, CP mode (b) 2,200,000 2,200,000
Series 1991 A, 3.85% 8/14/97, LOC Nat'l.
Westminster Bank, PLC, CP mode (b) 2,500,000 2,500,000
Series 1991 A, 3.85% 8/20/97, LOC Nat'l.
Westminster Bank, PLC, CP mode (b) 1,500,000 1,500,000
Chester County Ind. Dev. Auth. Rfdg. Rev. (General Motors
Corp. Proj.) Series 1996, 4.20%, VRDN 2,800,000 2,800,000
Chester County Health & Ed. Facs. Auth. Rev Bonds
Series 1996 A, 3.90% 7/1/97 (MBIC Insured) 1,165,000 1,165,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Cumberland County Ind. Dev. Auth. (Lane Enterprises,
Inc. Proj.) 4.45%, LOC Corestates Bank, VRDN (b) $ 2,600,000 $ 2,600,000
Delaware County Auth. Hosp. Rev. (Crozer-Chester Med. Ctr.)
Series 1996, 4.23%, LOC Kriedietbank NV, VRDN 4,900,000 4,900,000
Delaware County Ind. Dev. Auth. Poll. Cont. Rev.
(Philadelphia Elec.) Series 1988 B:
3.65% 7/8/97 (FGIC Insured) (Liquidity Facility
FGIC Security Purchase, Inc.) CP mode 4,000,000 4,000,000
3.70% 7/23/97 (FGIC Insured) (Liquidity Facility
FGIC Security Purchase, Inc.) CP mode 1,000,000 1,000,000
Delaware Valley Reg'l. Fin. Auth. Local Gov't.:
Series 1985 A, 4.15%, LOC Credit Suisse First
Boston, VRDN 1,400,000 1,400,000
Series 1986, 4.15%, LOC Credit Suisse First
Boston, VRDN 2,400,000 2,400,000
Doylestown Hosp. Auth. Rev. (Doylestown Hosp.)
Participating VRDN, Series BT-63, 4.31%
(Liquidity Facility ADP) (c) 10,098,000 10,098,000
Emmaus Gen. Auth. Rev. Local Gov't. Rev. Pool Prog.:
(Franklin Reg.) Series 1989 D-10, 4.20%, LOC Canadian
Imperial Bank of Commerce, VRDN 2,500,000 2,500,000
(Saucon Valley) Series D-12, 4.20%, LOC Canadian
Imperial Bank of Commerce, VRDN 1,900,000 1,900,000
Series 1989 E-7, 4.30%, LOC Midland Bank PLC, VRDN 3,100,000 3,100,000
Series 1989 G-7, 4.30% (Liquidity Facility Midland
Bank PLC) VRDN 3,000,000 3,000,000
Erie County Ind. Dev. Auth. Rev. (Carlisle Corp. Proj.)
Series 1993, 4.30%, LOC SunTrust Bank, VRDN (b) 1,000,000 1,000,000
Lancaster Higher Ed. Facs. Auth. College Rev.
(Franklin & Marshall College Proj.):
4.10% (BPA Chase Manhattan Bank) VRDN 5,000,000 5,000,000
4.125%, VRDN 850,000 850,000
Lehigh County Ind. Dev. Auth. Poll. Cont. Rev.
(Allegheny Elec. Coop., Inc. Proj.):
Series 1984 A, 3.80%, LOC Rabobank Nederland,
VRDN 500,000 500,000
Series 1984 B, 3.80%, LOC Rabobank
Nederland, VRDN 1,000,000 1,000,000
Lycoming County Ind. Dev. Auth. (Coastal
Aluminum Rolling Mills) Series 1995, 4.45%,
LOC Corestates Bank, VRDN (b) 1,910,000 1,910,000
Montgomery County Ind. Dev. Auth. Rev.:
(H.P. Cadwallader, Inc. Proj.) Series 1995, 4.45%,
LOC Corestates Bank, VRDN (b) 1,030,000 1,030,000
(RJI Limited Partnership Proj.) Series 1992, 4.45%,
LOC Corestates Bank, VRDN (b) 1,705,000 1,705,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Montgomery County Ind. Dev. Auth. Rev.: - continued
(Sirius Dev. Assoc. Proj.) 4.40%, LOC PNC Bank,
VRDN (b) $ 1,500,000 $ 1,500,000
Moon Ind. Dev. Auth. Rev. (One Thorn Run Center Proj.)
Series 1995 A, 4.25%, LOC Nat'l. City Bank of
Pennsylvania, VRDN (b) 3,420,000 3,420,000
North Pennsylvania Wtr. Auth. Rev. Participating VRDN, Series
SGA-30, 4.35% (Liquidity Facility Societe Generale) (c) 10,000,000
10,000,000
Northampton County Ind. Dev. Auth. Rev.:
(Bedford Park Proj.):
Series 1996 A, 4.35%, LOC Harris Trust, VRDN (b) 2,105,000 2,105,000
Series 1996 B, 4.35%, LOC Harris Trust, VRDN (b) 950,000 950,000
Bonds (Citizens Utilities Co. Proj.) Series 1991, 3.75%
7/24/97 CP mode (b) 1,100,000 1,100,000
(Victoria Vogue Proj.) 4.45%, LOC Corestates
Bank, VRDN (b) 2,615,000 2,615,000
Northeastern Hosp. & Ed. Auth. (Allhealth Pooled Fing.)
Series 1996, 4.25%, LOC Chase Manhattan Bank,
VRDN 5,000,000 5,000,000
Northumberland County Ind. Dev. Auth. (Foster
Wheeler Mt. Carmel, Inc. Proj.):
Series 1987 A, 4.25%, LOC Union Bank of
Switzerland, VRDN (b) 17,380,000 17,380,000
Series 1987 B, 4.25%, LOC Union Bank of
Switzerland, VRDN (b) 2,340,000 2,340,000
Pennsylvania Econ. Dev. Fin. Auth. Econ. Rev.:
(Esschem, Inc.) Series 1991 D-10, 4.40%,
LOC PNC Bank, NA, VRDN (b) 700,000 700,000
(Henry Molded Prod., Inc.) Series 1992 A-4, 4.40%,
LOC PNC Bank, NA, VRDN (b) 700,000 700,000
(Landmark LP) Series 1995 I-3, LOC PNC Bank, NA,
VRDN (b) 2,100,000 2,100,000
(McDowell Manufacturing Co. Proj.) Series 1996 F-4,
4.40%, LOC PNC Bank, VRDN (b) 1,000,000 1,000,000
(Pappafava Proj. ) Series 1989 D-7, 4.40%,
LOC PNC Bank, NA, VRDN (b) 200,000 200,000
(Payne Printery Proj.) Series 1989 B-8, 4.40%, LOC
PNC Bank, NA, VRDN (b) 275,000 275,000
(Port Erie Plastics Proj.) Series 1989 D-9, 4.40%,
LOC PNC Bank, NA, VRDN (b) 500,000 500,000
(Respironics, Inc. Proj.) Series 1989 F, 4.40%, LOC PNC Bank,
NA, VRDN (b) 800,000 800,000
(The Babcock & Wilcox Co. Proj.) Series 1989 A-2,
4.40%, LOC PNC Bank, NA, VRDN (b) 4,825,000 4,825,000
Series 1996 A-1, 4.40%, LOC PNC Bank, NA,
VRDN (b) 625,000 625,000
Series 1996 A-2, 4.40%, LOC PNC Bank, NA,
VRDN (b) 2,100,000 2,100,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Pennsylvania Econ. Dev. Fin. Auth. Econ. Rev.: - continued
Series 1996 A-3, 4.40%, LOC PNC Bank, NA,
VRDN (b) $ 1,000,000 $ 1,000,000
Series 1996 A-7, 4.40%, LOC PNC Bank, NA,
VRDN (b) 750,000 750,000
Series 1996 A-8, 4.40%, LOC PNC Bank, NA,
VRDN (b) 900,000 900,000
(Suntory Wtr. Group, Inc. Proj.) Series1992 D,
4.30%, LOC Wachovia Bank & Trust, VRDN (b) 4,900,000 4,900,000
Pennsylvania Energy Dev. Auth. Rev. (B & W Edensburg
Proj.) Series 1986, 4.25%, LOC Swiss Bank Corp.,
VRDN (b) 600,000 600,000
Pennsylvania State Bonds Series A, 6.80% 5/15/98 1,000,000 1,024,747
Pennsylvania Higher Ed. Assistance Agcy. Student Loan Rev.:
Series 88-B, 4.25%, LOC Student Loan Marketing
Assoc., VRDN (b) 4,000,000 4,000,000
Series 1997 A, 4.25%, LOC Student Loan Marketing
Assoc., VRDN (b) 5,000,000 5,000,000
Pennsylvania Higher Ed. Facs. Auth.:
(Carnegie Mellon Univ.) Series 1995 A, 4.15%
(BPA Morgan Guaranty Trust Co.) VRDN 2,700,000 2,700,000
(Temple University) Series 1984, 4.05%,
LOC Landesbank Hessen-Thuringen, VRDN 300,000 300,000
Pennsylvania Tpk. Commission Oil Franchise Tax Rev.
Bonds, Series 1994 A, 4.60% 12/1/97 (AMBAC Insured) 2,235,000 2,243,667
Philadelphia Arpt. Rev. Bonds 5% 6/15/98
(FGIC Insured) (d) 7,865,000 7,943,021
Philadelphia Redev. Auth. RAN (Southwark Plaza Proj.)
Series 1996, 3.85% 12/30/97, LOC FGIC/Capital
Market Svc. (b) 8,000,000 8,000,000
Pittsburgh Wtr. & Swr. Sys. Rev. Participating VRDN,
Series BT-181, 4.275% (Liquidity Facility Bankers
Trust Co.) (c) 4,935,000 4,935,000
Schuylkill County Ind. Dev. Auth. Rev.:
(Craftex Mills, Inc. Proj.) Series 1996, 4.45%,
LOC Corestates Bank, NA, VRDN (b) 2,000,000 2,000,000
(Interlock Realty Co.) 4.40%, LOC Star Bank, VRDN (b) 50,000 50,000
(Metal Sales Manufacturing Corp.) Series 1995,
4.30%, LOC Star Bank, VRDN (b) 1,200,000 1,200,000
(Prime Packaging, Inc. Proj.) Series 1995, 4.45%
LOC Corestates Bank, VRDN (b) 1,935,000 1,935,000
Venango Ind. Dev. Auth. Resource Recovery Rev.
Bonds (Scrubgrass Generating Co. Proj.):
Series 1990 A:
3.85% 8/20/97, LOC Nat'l. Westminster
Bank, PLC, CP mode (b) 3,000,000 3,000,000
3.90% 8/14/97, LOC Nat'l. Westminster
Bank, PLC, CP mode (b) 1,400,000 1,400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PENNSYLVANIA - CONTINUED
Venango Ind. Dev. Auth. Resource Recovery Rev.
Bonds (Scrubgrass Generating Co. Proj.): - continued
Series 1990 A: - continued
3.95% 7/15/97, LOC Nat'l. Westminster
Bank, PLC, CP mode (b) $ 3,000,000 $ 3,000,000
3.80% 8/13/97, LOC Nat'l. Westminster
Bank, PLC, CP mode (b) 2,500,000 2,500,000
Series 1990 B, 3.80% 7/11/97, LOC Nat'l.
Westminster Bank, PLC, CP mode (b) 2,000,000 2,000,000
Westmoreland County Ind. Dev. Auth. (Nat'l.
Waste & Energy Corp.) 4.40%, LOC Fleet Bank,
NA, VRDN (b) 9,200,000 9,200,000
York City Gen. Auth. Pooled Fing. Rev. Series 1996,
4.15%, LOC First Union Nat'l. Bank of North
Carolina, VRDN 6,500,000 6,500,000
TOTAL INVESTMENTS - 100% $ 233,229,435
Total Cost for Income Tax Purposes $ 233,229,435
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
3. Provides evidence of ownership in one or more underlying municipal
bonds.
4. Security purchased on a delayed delivery or when-issued basis (see Note
#2 of Notes to Financial Statements).
INCOME TAX INFORMATION
At December 31, 1996, the fund had a capital loss carryforward of
approximately $65,000 of which $5,000, $5,000, $19,000, $10,000 and $26,000
will expire on December 31, 1997, 1998, 2002, 2003 and 2004, respectively.
SPARTAN PENNSYLVANIA MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 233,229,435
See accompanying schedule
Cash 553,592
Interest receivable 1,140,704
TOTAL ASSETS 234,923,731
LIABILITIES
Payable for investments purchased $ 1,400,000
Regular delivery
Delayed delivery 7,952,852
Distributions payable 25,169
Accrued management fee 91,621
Other payables and accrued expenses 4,354
TOTAL LIABILITIES 9,473,996
NET ASSETS $ 225,449,735
Net Assets consist of:
Paid in capital $ 225,513,285
Accumulated net realized gain (loss) on investments (63,550)
NET ASSETS, for 225,511,334 shares outstanding $ 225,449,735
NET ASSET VALUE, offering price and redemption price $1.00
per share ($225,449,735 (divided by) 225,511,334 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTEREST INCOME $ 4,306,204
EXPENSES
Management fee $ 570,452
Non-interested trustees' compensation 1,103
Total expenses before reductions 571,555
Expense reductions (2,698) 568,857
NET INTEREST INCOME 3,737,347
NET REALIZED GAIN (LOSS) ON INVESTMENTS 1,161
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,738,508
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1997 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 3,737,347 $ 7,511,918
Net interest income
Net realized gain (loss) 1,161 (26,471)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,738,508 7,485,447
FROM OPERATIONS
Distributions to shareholders from net interest income (3,737,347) (7,511,918)
Share transactions at net asset value of $1.00 per share 73,772,897 168,791,356
Proceeds from sales of shares
Reinvestment of distributions from net interest income 3,603,862 7,197,082
Cost of shares redeemed (94,314,567) (175,218,462)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES (16,937,808) 769,976
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (16,936,647) 743,505
NET ASSETS
Beginning of period 242,386,382 241,642,877
End of period $ 225,449,735 $ 242,386,382
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED
JUNE 30, 1997
(UNAUDITED) 1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .016 .032 .035 .026 .022 .029
Investment
Operations
Net interest income
Less Distributions
From net interest (.016) (.032) (.035) (.026) (.022) (.029)
income
Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
TOTAL RETURN B 1.63% 3.21% 3.56% 2.61% 2.21% 2.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end $ 225,450 $ 242,386 $ 241,643 $ 257,608 $ 240,983 $ 243,335
of period
(000 omitted)
Ratio of expenses to .50% A .50% .50% .50% .50% .47%
average net assets C
Ratio of expenses to .50% A .48% .50% .50% .50% .47%
average net assets D
after expense
reductions
Ratio of net interest 3.27% A 3.17% 3.50% 2.58% 2.19% 2.88%
income to average
net assets
</TABLE>
1. ANNUALIZED
2. TOTAL RETURNS DO NOT INCLUDE THE FORMER ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD
HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS
SHOWN.
3. FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
4. FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1997 (Unaudited)
12. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Pennsylvania Municipal Income Fund (the income fund) is a fund of
Fidelity Municipal Trust. Spartan Pennsylvania Municipal Money Market Fund
(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 financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to make
certain estimates and assumptions at the date of the financial statements.
The following summarizes the significant accounting policies of the money
market fund and the income fund:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Securities (including
restricted securities) for which market quotations are not readily
available are valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the Board
of Trustees. Short-term securities with remaining maturities of sixty days
or less for which quotations are not readily available are valued at
amortized cost or original cost plus accrued interest, both of which
approximate current value.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for market
discount, capital loss carryforwards and losses deferred due to futures and
options. The income fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net interest income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments may include temporary book and tax differences which
will reverse in a sequent period. Any taxable gain remaining at fiscal year
end is distributed in the following year.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the income fund, is accounted for as
an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
13. OPERATING POLICIES.
WHEN-ISSUED SECURITIES. Each fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying securities
is fixed at the time the transaction is negotiated. The market values of
the securities purchased on a when-issued or forward commitment basis are
identified as such in each applicable fund's schedule of investments. Each
fund may receive compensation for interest forgone in the purchase of a
when-issued security. With respect to purchase commitments, each fund
identifies securities as segregated in its custodial records with a value
at least equal to the amount of the commitment. The payables and
receivables associated with the purchases and sales of when-issued
securities having the same settlement date and broker are offset.
When-issued securities that have been purchased from and sold to different
brokers are reflected as both payables and receivables in the applicable
statements of assets and liabilities under the caption "Delayed delivery."
Losses may arise due to changes in the market value of the underlying
securities, if the counterparty does not perform under the contract, or
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES -
CONTINUED
if the issuer does not issue the securities due to political, economic, or
other factors.
FUTURES CONTRACTS. Each fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates. Buying
futures tends to increase the fund's exposure to the underlying instrument,
while selling futures tends to decrease the fund's exposure to the
underlying instrument or hedge other fund investments. Futures contracts
involve, to varying degrees, risk of loss in excess of the futures
variation margin reflected in the Statement of Assets and Liabilities. The
underlying face amount at value of any open futures contracts at period end
is shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the underlying
instrument at period end. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Gains and losses are realized upon the expiration or closing of the
futures contracts. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they are
traded.
RESTRICTED SECURITIES. Each fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $3,120,000 or
2.1% of net assets for the income fund.
14. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $25,298,556 and $39,350,585, respectively.
The market value of futures contracts opened and closed during the period
amounted to $24,253,336 and $17,617,648, respectively.
15. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55% and .50% of average net assets
for the income and money market funds, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the funds' shareholders which amounted to
$990 and $3,341 for the period for the income and money market funds,
respectively. Effective April 1, 1997, these transaction fees were
eliminated for the income fund.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
16. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund with its custodian
and transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During the
period, the income and money market fund's expenses were reduced by $258
and $2,698, respectively, under these arrangements.
PROXY VOTING RESULTS
A special meeting of Spartan Pennsylvania Municipal Money Market Fund's
shareholders was held on July 16, 1997. The results of votes taken among
shareholders on proposals are listed below.
PROPOSAL 1
To elect as Trustees the following twelve nominees.
# OF % OF
SHARES VOTED SHARES VOTED
J. GARY BURKHEAD
Affirmative 444,689,929.498 96.136
Withheld 17,871,441.790 3.864
TOTAL 462,561,371.288 100.000
RALPH F. COX
Affirmative 443,768,598.498 95.937
Withheld 18,792,772.790 4.063
TOTAL 462,561,371.288 100.000
PHYLLIS BURKE DAVIS
Affirmative 443,103,899.148 95.794
Withheld 19,457,472.140 4.206
TOTAL 462,561,371.288 100.000
ROBERT M. GATES
Affirmative 443,950,387.378 95.977
Withheld 18,610,983.910 4.023
TOTAL 462,561,371.288 100.000
EDWARD C. JOHNSON 3RD
Affirmative 444,259,190.958 96.043
Withheld 18,302,180.330 3.957
TOTAL 462,561,371.288 100.000
E. BRADLEY JONES
Affirmative 442,923,945.528 95.755
Withheld 19,637,425.760 4.245
TOTAL 462,561,371.288 100.000
# OF % OF
SHARES VOTED SHARES VOTED
DONALD J. KIRK
Affirmative 444,464,359.398 96.088
Withheld 18,097,011.890 3.912
TOTAL 462,561,371.288 100.000
PETER S. LYNCH
Affirmative 444,937,445.098 96.190
Withheld 17,623,926.190 3.810
TOTAL 462,561,371.288 100.000
WILLIAM O. MCCOY
Affirmative 444,154,888.538 96.021
Withheld 18,406,482.750 3.979
TOTAL 462,561,371.288 100.000
GERALD C. MCDONOUGH
Affirmative 443,149,018.198 95.803
Withheld 19,412,353.090 4.197
TOTAL 462,561,371.288 100.000
MARVIN L. MANN
Affirmative 444,770,167.908 96.154
Withheld 17,791,203.380 3.846
TOTAL 462,561,371.288 100.000
THOMAS R. WILLIAMS
Affirmative 444,019,634.298 95.992
Withheld 18,541,736.990 4.008
TOTAL 462,561,371.288 100.000
PROPOSAL 2
To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants of the trust.
# OF % OF
SHARES VOTED SHARES VOTED
Affirmative 435,395,650.683 94.127
Against 13,012,889.495 2.813
Abstain 14,152,831.110 3.060
TOTAL 462,561,371.288 100.000
PROPOSAL 3
To amend the Declaration of Trust to provide voting rights based on a
shareholder's total dollar investment in a fund, rather than on the number
of shares owned.
# OF % OF
SHARES VOTED SHARES VOTED
OF THE TRUST OF THE TRUST
Affirmative 409,553,827.698 88.560
Against 31,050,994.330 6.714
Abstain 21,856,323.260 4.726
TOTAL 462,461,145.288 100.000
# OF % OF
SHARES VOTED SHARES VOTED
OF THE FUND OF THE FUND
Affirmative 123,572,725.628 88.100
Against 11,158,538.880 7.956
Abstain 5,532,227.170 3.944
TOTAL 140,263,491.678 100.000
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
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(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
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Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
4001 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning Jr., Vice President - INCOME FUND
Dwight D. Churchill, Vice President - INCOME FUND
Boyce Greer, Vice President -
MONEY MARKET FUND
Diane M. McLaughlin, Vice President - MONEY MARKET FUND
Jonathan D. Short, Vice President -
INCOME FUND
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Thomas D. Maher, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox*
Phyllis Burke Davis*
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
William O. McCoy*
Gerald C. McDonough*
Robert C. Pozen
Thomas R. Williams*
ADVISORY BOARD
J. Gary Burkhead
* INDEPENDENT TRUSTEES
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
