SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-52577) UNDER THE
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 2 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. [ ]
Fidelity Hereford Street Trust
(Exact Name of Registrant as Specified in Declaration of Trust)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (617) 570-7000
Arthur S. Loring, Esq.
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[x] On June 17, 1994 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] On ( ) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule before June 30, 1994. The Registrant is suceeding to the
Registration Statement on Form N-1A of Fidelity Summer Street Trust (File
No. 2-58542) ("Predecessor Trust"), insofar as such Registration Statement
relates to the Spartan Money Market Fund and Spartan U.S. Government Money
Market Fund ("the funds"). The Predecessor Trust has registered an
indefinite number of shares of the funds under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940. A Rule
24f-2 Notice for the fiscal year ended April 30, 1993 was filed by the
Predecessor Trust with the Commission on June 17, 1993.
SPARTAN MONEY MARKET FUND
SPARTAN U.S. GOVERNMENT MONEY MARKET FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest
3 a .............................. Financial Highlights
b .............................. *
c, d .............................. Performance
4 a i............................. Charter
ii........................... The Funds at a Glance; Investment Principles and
Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. Doing Business with Fidelity; Charter, Cover
Page; The Funds at a Glance
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Cover Page; Charter
f .............................. Expenses
g .............................. *
5 A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. *
c .............................. Exchange Restrictions; Transaction Details
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details
c .............................. *
d .............................. How to Buy Shares
e .............................. *
f .............................. Breakdown of Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ *
14 a - c ............................ Trustees and Officers
15 a, b ............................ *
c ............................ Trustees and Officers
16 a i ............................ FMR; Portfolio Transactions
ii ............................ Trustees and Officers
iii ............................ Management Contracts
b ............................ Management Contracts
c, d ............................ Contracts with companies affiliated with FMR
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trust
i ............................ Contracts with companies affiliated with FMR
17 a - c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trust
b ............................ *
19 a ............................ Additional Purchase and Redemption Information
b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities
c ............................ *
20 ............................. Distributions and Taxes
21 a, b ............................ Contracts with companies affiliated with FMR
c ............................ *
22 ............................ Performance
23 ............................ Financial Statements
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
A Statement of Additional Information dated June 17, 1994 has been filed
with the Securities and Exchange Commission, and is incorporated herein by
reference (is legally considered a part of this prospectus). The Statement
of Additional Information is available free upon request by calling
Fidelity at 1-800-544-8888.
Investments in the funds are neither insured nor guaranteed by the U.S.
government, and there can be no assurance that a fund will maintain a
stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.
These funds seek high current income while maintaining a stable $1.00 share
price by investing in high-quality short-term securities. Spartan Money
Market invests in a broad range of money market securities. Spartan U.S.
Government Money Market invests mainly in U.S. government or related
instruments.
SPARTAN(REGISTERED TRADEMARK)
MONEY MARKET
FUND
and
SPARTAN(REGISTERED TRADEMARK)
U.S.
GOVERNMENT
MONEY MARKET
FUND
PROSPECTUS
JUNE 17, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACy
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SPM/SPU - pro - 694
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
<r>KEY FACTS</r>
THE FUNDS AT A GLANCE
GOAL: Income while maintaining a stable share price. As with any
mutual fund, there is no assurance that a fund will achieve its goal.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager. FMR Texas Inc. (FTX), a
subsidiary of FMR, chooses investments for the funds.
Although the funds share the same goal and the same management, they follow
different strategies and have different histories.
SPARTAN MONEY MARKET
STRATEGY: Invests in high-quality, short-term instruments of all types.
SIZE: As of FY End Long:1, 1994, the fund had over $6.4 billion in assets.
SPARTAN U.S. GOVERNMENT
STRATEGY: Invests in high-quality, short-term instruments issued or
guaranteed by the U.S. government or government agencies.
SIZE: As of FY End Long:1, 1994, the fund had over $780 million in assets.
WHO MAY WANT TO INVEST
Either fund may be appropriate for investors who would like to earn income
at current money market rates while preserving the value of their
investment. The rate of income will vary from day to day, generally
reflecting short-term interest rates.
Each fund is managed to keep its share price stable at $1.00 .
Spartan U.S. Government Money Market offers an added measure of safety with
its focus on U.S. government securities.
T hese funds do not constitute a balanced investment plan. However,
because they emphasize stability, they could be well-suited for a portion
of your savings. Both funds offer checkwriting to give you easy access to
your money.
The Spartan family of funds is designed for cost-conscious investors
looking for higher yields through lower costs. The Spartan
Approach(Registered trademark) requires investors to make high minimum
investments and, in some cases, to pay for individual transactions.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the MONEY MARKET
category.
(arrow) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(bullet) INCOME Seeks income by
investing in bonds.
(bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(bullet) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund. See page for more information.
Maximum sales charge on purchases and
reinvested dividends None
Deferred sales charge on redemptions None
Exchange and wire transaction fees $5.00
Checkwriting fee, per check written $2.00
Account closeout fee $5.00
THESE FEES ARE WAIVED if your account balance at the time of the
transaction is $50,000 or more.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. Expenses are factored into each fund's
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on historical expenses, adjusted to
reflect current fees, and are calculated as a percentage of average net
assets.
SPARTAN MONEY MARKET
Management fee .45%
12b-1 fee None
Other expenses . 0 0%
Total fund operating expenses .4 5 %
SPARTAN U.S. GOVERNMENT
Management fee .4 5 %
12b-1 fee None
Other expenses .00%
Total fund operating expenses .4 5 %
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses after
the number of years indicated, first assuming that you leave your account
open, and then assuming that you close your account at the end of the
period:
SPARTAN MONEY MARKET
Account open Account closed
After 1 year $ 5 $ 10
After 3 years $ 14 $ 19
After 5 years $ 25 $ 30
After 10 years $ 57 $ 62
SPARTAN U.S. GOVERNMENT
Account open Account closed
After 1 year $ 5 $ 10
After 3 years $ 14 $ 19
After 5 years $ 25 $ 30
After 10 years $ 57 $ 62
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's Annual Reports and
have been audited by Coopers & Lybrand, independent accounts. Their
reports on the financial statements and financial highlights are included
in the Annual Reports. The financial statements and financial highlights
are incorporated by reference into (are legally a part of) the funds'
Statement of Additional Information.
SPARTAN MONEY MARKET
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
1.Selected Per-Share
Data and Ratios
2.Years Ended April 30
1989C 1990 1991 1992 1993 1994
3.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
4.Income from
.025 .089 .076 .053 .035 .031
Investment Operations
Net interest income
5. Dividends from net
(.025) (.089) (.076) (.053) (.035) (.031)
interest income
6.Net asset value, end of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
7.Total return B
2.55% 9.32% 7.87% 5.41% 3.51% 3.14%
8.Net assets, end of
$ 1,381,8 $ 8,341,6 $ 7,189,9 $ 5,370,6 $ 4,541,8 $ 6,453,3
period
11 88 19 71 65 98
(000 omitted)
9.Ratio of expenses to
-- .09% .28% .34% .30% .31%
average net assets D
10.Ratio of expenses to
.60% .53% .47% .34% .30% .32%
average net
A
assets before expense
reductions D
11.Ratio of net interest
10.27% 8.77% 7.62% 5.32% 3.46% 3.12%
income
A
to average net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FROM JANUARY 23, 1989 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1989
D DURING THE PERIOD SHOWN, FMR VOLUNTARILY REIMBURSED THE FUND FOR
CERTAIN EXPENSES.
SPARTAN U.S. GOVERNMENT MONEY MARKET
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12.Selected Per-Share Data and
Ratios
13.Years Ended April 30 1990C 1991 1992 1993 1994
14.Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
15.Income from Investment .019 .076 .052 .032 .029
Operations
Net interest income
16. Dividends from net interest (.019) (.076) (.052) (.032) (.029)
income
17.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
18.Total return B 1.94% 7.84% 5.33% 3.24% 2.89%
19.Net assets, end of period (000 $ 49,339 $ 1,878,25 $ 1,411,34 $ 897,792 $ 780,295
omitted) 0 8
20.Ratio of expenses to average -- .17% .40% .45% .45%
net assets D
21.Ratio of expenses to average .55% .55% .55% .55% .54%
net assets A
before expense reductions D
22.Ratio of net interest income to 8.49% 7.34% 5.29% 3.25% 2.85%
average net assets A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FROM FEBRUARY 5, 1990 (COMMENCEMENT OF OPERATIONS) TO APRIL 30,
1990
D DURING THE PERIOD SHOWN, FMR VOLUNTARILY REDUCED THE FUND FOR CERTAIN
EXPENSES.
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD. The
total returns and yields that follow are based on historical fund results
and do not reflect the effect of taxes or any transaction fees you may have
paid. The figures would be lower if fees were taken into account.
Each fund's fiscal year runs from May 1 through FY End Long:1. The tables
below show each fund's performance over past fiscal years compared to a
measure of inflation. The charts on page 8 help you compare the
yields of these funds to those of their competitors.
SPARTAN MONEY MARKET
Fiscal periods ended Past Past Life
April 30, 1994 1 year 5 years of fundA
Average annual
total return 3.14% 5.82% 6.02%
Cumulative
total return 3.14% 32.71% 36.09%
Consumer Price
Index 2.36% 19.74% 21.72%
SPARTAN U.S. GOVERNMENT
Fiscal periods ended Past Life
April 30, 1994 1 year of fund B
Average annual
total return 2.89% 5.01%
Cumulative
total return 2.89% 23.00%
Consumer Price
Index 2.36% 15.70%
A FROM JANUARY 23, 1989
B FROM FEBRUARY 5, 1990
EXPLANATION OF TERMS
UNDERSTANDING
PERFORMANCE
SEVEN-DAY YIELD illustrates
the income earned by a
money market fund over a
recent seven-day period. TOTAL
RETURN reflects both the
reinvestment of income and
the change in a fund's share
price. Since money market
funds maintain a stable $1.00
share price, current seven-day
yields are the most common
illustration of money market
fund performance.
(checkmark)
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of
return that, if achieved annually, would have produced the same cumulative
total return if performance had been constant over the entire period.
Average annual total returns smooth out variations in performance; they are
not the same as actual year-by-year results .
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE
YIELD.
SPARTAN MONEY MARKET
7-day yields
Percentage (%)
Row: 1, Col: 1, Value: 4.95
Row: 1, Col: 2, Value: 4.02
Row: 2, Col: 1, Value: 4.57
Row: 2, Col: 2, Value: 3.75
Row: 3, Col: 1, Value: 4.39
Row: 3, Col: 2, Value: 3.7
Row: 4, Col: 1, Value: 4.27
Row: 4, Col: 2, Value: 3.58
Row: 5, Col: 1, Value: 4.01
Row: 5, Col: 2, Value: 3.46
Row: 6, Col: 1, Value: 3.92
Row: 6, Col: 2, Value: 3.42
Row: 7, Col: 1, Value: 3.75
Row: 7, Col: 2, Value: 3.14
Row: 8, Col: 1, Value: 3.58
Row: 8, Col: 2, Value: 2.99
Row: 9, Col: 1, Value: 3.44
Row: 9, Col: 2, Value: 2.83
Row: 10, Col: 1, Value: 3.34
Row: 10, Col: 2, Value: 2.73
Row: 11, Col: 1, Value: 3.4
Row: 11, Col: 2, Value: 2.76
Row: 12, Col: 1, Value: 3.51
Row: 12, Col: 2, Value: 3.09
Row: 13, Col: 1, Value: 3.43
Row: 13, Col: 2, Value: 2.94
Row: 14, Col: 1, Value: 3.25
Row: 14, Col: 2, Value: 2.66
Row: 15, Col: 1, Value: 3.15
Row: 15, Col: 2, Value: 2.63
Row: 16, Col: 1, Value: 3.14
Row: 16, Col: 2, Value: 2.87
Row: 17, Col: 1, Value: 3.03
Row: 17, Col: 2, Value: 2.55
Row: 18, Col: 1, Value: 3.03
Row: 18, Col: 2, Value: 2.78
Row: 19, Col: 1, Value: 3.05
Row: 19, Col: 2, Value: 2.59
Row: 20, Col: 1, Value: 3.05
Row: 20, Col: 2, Value: 2.58
Row: 21, Col: 1, Value: 3.02
Row: 21, Col: 2, Value: 2.6
Row: 22, Col: 1, Value: 3.02
Row: 22, Col: 2, Value: 2.87
Row: 23, Col: 1, Value: 3.12
Row: 23, Col: 2, Value: 2.77
Row: 24, Col: 1, Value: 3.17
Row: 24, Col: 2, Value: 2.93
Row: 25, Col: 1, Value: 3.15
Row: 25, Col: 2, Value: 3.0
Row: 26, Col: 1, Value: 3.21
Row: 26, Col: 2, Value: 2.95
Row: 27, Col: 1, Value: 3.46
Row: 27, Col: 2, Value: 3.24
Row: 28, Col: 1, Value: 3.6
Row: 28, Col: 2, Value: 3.36
Spartan
Money Market
Fund
Competitive
funds average
1992
1993
1994
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGES are the IBC/Donoghue's MONEY FUND
AVERAGES(trademark), which assume reinvestment of distributions. Spartan
Money Market Fund compares its performance to the All Taxable category, and
Spartan U.S. Government Money Market Fund compares to the Government
category. These averages, which currently reflect the performance of over
500 and 150 mutual funds with similar objectives,
respectively, are published in the MONEY FUND REPORT(Registered trademark)
by IBC USA (Publications), Inc.
SPARTAN U.S. GOVERNMENT MONEY MARKET
7-day yields
Percentage (%)
Row: 1, Col: 1, Value: 4.58
Row: 1, Col: 2, Value: 3.95
Row: 2, Col: 1, Value: 4.53
Row: 2, Col: 2, Value: 3.82
Row: 3, Col: 1, Value: 4.33
Row: 3, Col: 2, Value: 3.72
Row: 4, Col: 1, Value: 4.14
Row: 4, Col: 2, Value: 3.55
Row: 5, Col: 1, Value: 4.04
Row: 5, Col: 2, Value: 3.48
Row: 6, Col: 1, Value: 4.01
Row: 6, Col: 2, Value: 3.44
Row: 7, Col: 1, Value: 3.63
Row: 7, Col: 2, Value: 3.13
Row: 8, Col: 1, Value: 3.58
Row: 8, Col: 2, Value: 3.03
Row: 9, Col: 1, Value: 3.15
Row: 9, Col: 2, Value: 2.86
Row: 10, Col: 1, Value: 2.96
Row: 10, Col: 2, Value: 2.69
Row: 11, Col: 1, Value: 2.92
Row: 11, Col: 2, Value: 2.67
Row: 12, Col: 1, Value: 3.02
Row: 12, Col: 2, Value: 2.77
Row: 13, Col: 1, Value: 2.97
Row: 13, Col: 2, Value: 2.69
Row: 14, Col: 1, Value: 2.86
Row: 14, Col: 2, Value: 2.63
Row: 15, Col: 1, Value: 2.8
Row: 15, Col: 2, Value: 2.59
Row: 16, Col: 1, Value: 2.76
Row: 16, Col: 2, Value: 2.53
Row: 17, Col: 1, Value: 2.79
Row: 17, Col: 2, Value: 2.53
Row: 18, Col: 1, Value: 2.79
Row: 18, Col: 2, Value: 2.57
Row: 19, Col: 1, Value: 2.86
Row: 19, Col: 2, Value: 2.58
Row: 20, Col: 1, Value: 2.82
Row: 20, Col: 2, Value: 2.58
Row: 21, Col: 1, Value: 2.83
Row: 21, Col: 2, Value: 2.57
Row: 22, Col: 1, Value: 2.78
Row: 22, Col: 2, Value: 2.55
Row: 23, Col: 1, Value: 2.87
Row: 23, Col: 2, Value: 2.62
Row: 24, Col: 1, Value: 2.9
Row: 24, Col: 2, Value: 2.63
Row: 25, Col: 1, Value: 2.86
Row: 25, Col: 2, Value: 2.6
Row: 26, Col: 1, Value: 2.97
Row: 26, Col: 2, Value: 2.71
Row: 27, Col: 1, Value: 3.19
Row: 27, Col: 2, Value: 2.85
Row: 28, Col: 1, Value: 3.37
Row: 28, Col: 2, Value: 3.05
Spartan
U.S.
Governmen
t Money
Market
Fund
Competitive
funds
average
1994
1993
1992
THE CHARTS SHOW THE 7-DAY EFFECTIVE YIELDS FOR THE FUNDS AND THEIR
COMPETITIVE FUNDS AVERAGES AS OF THE LAST TUESDAY OF EACH MONTH FROM
JANUARY 1992 THROUGH APRIL 1994. YIELDS FOR THE FUNDS WOULD HAVE BEEN
LOWER IF FIDELITY HAD NOT REIMBURSED CERTAIN FUND EXPENSES.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
<r>THE FUNDS IN DETAIL</r>
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, each
f u nd is currently a diversified fund of Fidelity Hereford Street
Trust, an open-end management investment company organized as a Delaware
business trust on November 18, 1993.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs. FTX has
primary responsibility for providing investment management services.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trust), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SPARTAN MONEY MARKET seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in short-term,
high-quality instruments. The fund buys U.S. dollar-denominated instruments
of domestic and foreign issuers, including banks and other financial
institutions, governments and their agencies or instrumentalities, and
corporations.
SPARTAN U.S. GOVERNMENT MONEY MARKET seeks to earn a high level of current
income while maintaining a stable $1.00 share price by investing in
short-term, high-quality instruments. The fund normally invests at least
65% of its total assets in obligations issued or guaranteed as to principal
and interest by the U.S. government or by any of its agencies or
instrumentalities, and in repurchase agreements secured by these
obligations. The fund currently intends to invest only in these
instruments, privately stripped government securities, and reverse
repurchase agreements.
EACH FUND earns income at current money market rates, and when you sell
your shares, they should be worth the same amount as when you bought them.
Of course, there is no guarantee that either fund will maintain a stable
$1.00 share price. Spartan Money Market has the flexibility to invest more
broadly in pursuit of a high level of current income, while Spartan U.S.
Government Money Market offers added safety by focusing on U.S. government
securities.
The funds follow industry-standard guidelines on the quality and maturity
of their investments, which are designed to help maintain a stable $1.00
share price. The funds will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities they buy. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on the funds' investments could cause their share prices (and the
value of your investment) to change.
Each fund stresses income, preservation of capital, and liquidity, and does
not seek the higher yields or capital appreciation that more aggressive
investments may provide. Each fund's yield will vary from day to day,
generally reflecting current short-term interest rates and other market
conditions.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. As a shareholder, you will receive financial
reports every six months detailing fund holdings and describing recent
investment activities.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. government. Not all U.S. government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
FOREIGN OBLIGATIONS, including obligations of foreign banks, U.S. branches
and agencies of foreign banks, and foreign branches of U.S. banks, may
involve different risks than domestic obligations, including risks relating
to the political and economic conditions of the foreign country involved,
which could affect the payment of principal or interest.
RESTRICTIONS: A fund may not invest in foreign obligations unless they
are denominated in U.S. dollars.
ASSET-BACKED SECURITIES may include pools of mortgages, loans, receivables,
or other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities.
OTHER MONEY MARKET INSTRUMENTS may include commercial paper, certificates
of deposit, bankers' acceptances, time deposits, and corporate and
other short-term obligations. These instruments may carry fixed or
variable interest rates.
STRIPPED SECURITIES are the separate income or principal components of a
debt instrument. These involve risks that are similar to those of other
debt securities, although they may be more volatile.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of a fund's assets.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in a fund's
yield or in the market value of its assets.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities, i n cluding illiquid securities, may be
su b ject to legal restrictions. Difficulty in selling securities may
result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: A fund may not invest more than 5% of its total assets in any
one issuer, except that each fund may invest up to 25% of its total assets
in the highest quality securities of a single issuer for up to three days.
A fund may not invest more than 25% of its total assets in any one industry
(other than the financial services industry for Spartan Money Market; see
below). These limitations do not apply to U.S. government securities.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: Spartan Money Market will not invest less than 25% of its
assets in the financial services industry.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
or engage in reverse repurchase agreements, but not in an amount
exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering a fund's securities. A fund
may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SPARTAN MONEY MARKET seeks as high a level of current income as is
consistent with preservation of capital and liquidity by investing
principally in money market instruments. The fund will not purchase a
security if, as a result, more than 25% of its total assets would be
invested in a particular industry, except that the fund will invest more
than 25% of its assets in the financial services industry under normal
conditions.
SPARTAN U.S. GOVERNMENT MONEY MARKET seeks as high a level of current
income as is consistent with preservation of capital and liquidity.
EACH FUND may borrow money only for temporary or emergency purposes or
engage in reverse repurchase agreements, but not in an amount exceeding 33%
of its total assets. Loans, in the aggregate, may not exceed 33% of the
fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services.
FMR may, from time to time, agree to reimburse the funds for management
fees above a specified limit. FMR retains the ability to be repaid by a
fund if expenses fall below the specified limit prior to the end of the
fiscal year. Reimbursement arrangements, which may be terminated at any
time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a management fee at the annual rate of .45% of the fund's average net
assets. The total management fee rate for Spartan Money Market and
Spartan U.S. Government Money Market for fiscal 1994, after
reimbursement, was .31 % and .45%, respectively .
FMR HAS SUB-ADVISORY AGREEMENTS with FTX, which has primary responsibility
for providing investment manag e ment, while FMR retains
responsibility for providing other management services. FMR pays FTX 50% of
its management fee (before expense reimbursements) for these services.
FSC performs many transaction and accounting functions for the funds. These
services include processing shareholder transactions and calculating each
fund's share price. FMR, and not the funds, pays for these services.
To offset shareholder service costs, FMR or its affiliates also collect the
funds' $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and the $2.00 checkwriting charge. For fiscal
1994, these fees amounted to $ 211,175 , $ 19,284 ,
$ 10,860 , and $ 80,356, respectively, for Spartan Money Market
Fund and $ 30,505 , $ 4,127 , $ 1,965 , and $ 12,909 ,
respectively, for Spartan U.S. Government Money Market Fund.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
<r>YOUR ACCOUNT</r>
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 75 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers a fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(bullet) Number of Fidelity mutual
funds: over 200
(bullet) Assets in Fidelity mutual
funds: over $ 225 billion
(bullet) Number of shareholder
accounts: over 15 million
(bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age
and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. The funds are managed to keep share prices stable at $1.00.
Each fund's shares are sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $20,000
For Fidelity retirement accounts $10,000
TO ADD TO AN ACCOUNT $1,000
For Fidelity retirement accounts $1,000
Through automatic investment plans $500
MINIMUM BALANCE $10,000
For Fidelity retirement accounts $5,000
UNDERSTANDING THE
SPARTAN APPROACH(Registered trademark)
Fidelity's Spartan Approach is
based on the principle that
lower fund expenses can
increase returns. The Spartan
funds keep expenses low in
two ways. First, higher
investment minimums reduce
the effect of a fund's fixed
costs, many of which are paid
on a per-account basis.
Second, unlike most mutual
funds that include transaction
costs as part of overall fund
expenses, Spartan
shareholders pay directly for
the transactions they make.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (bullet) Exchange from another (bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (bullet) Complete and sign the (bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (bullet) Bring your application (bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (bullet) There may be a $5.00 (bullet) There may be a $5.00
fee for each wire fee for each wire
purchase. purchase.
(bullet) Call 1-800-544-7777 to (bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Automatically (automatic_graphic) (bullet) Not available. (bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $10,000
worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is being mailed to a different address than the one on
your account (record address),
(bullet) The check is being made payable to someone other than the account
owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name,
(bullet) The fund's name,
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. Do not, however, try to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
IF YOUR ACCOUNT BALANCE IS LESS THAN $50,000, THERE ARE FEES FOR INDIVIDUAL REDEMPTION
TRANSACTIONS: $2.00 FOR EACH CHECK YOU WRITE AND $5.00 FOR EACH EXCHANGE, BANK WIRE,
AND ACCOUNT CLOSEOUT.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (bullet) Maximum check request:
except retirement $100,000.
(bullet) For Money Line transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (bullet) At least one person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Check (check_graphic) All account types (bullet) Minimum check: $1,000.
except retirement (bullet) All account owners must sign
a signature card to receive a
checkbook.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affects your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. There may be a $5.00 fee for
each exchange out of the funds, unless you place your transaction on
Fidelity's automated exchange services.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or revoked,
see page .
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
Fidelity offers services that let you transfer money into your fund
account, or between fund accounts, automatically. Certain restrictions
apply for retirement accounts. Call 1-800-544-6666 for more information.
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM $500
FREQUENCY Monthly or quarterly
SETTING UP Complete the
appropriate section on
the fund application.
For existing accounts,
call 1-800-544-6666
for an application.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY
FUND
MINIMUM $500
FREQUENCY Every pay period
SETTING UP Check the
appropriate box on
the fund application,
or call
1-800-544-6666 for
an authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY
MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM $500
FREQUENCY Monthly, bimonthly,
quarterly, or annually
SETTING UP To establish, call
1-800-544-6666 after
both accounts are
opened.
<r>SHAREHOLDER AND ACCOUNT POLICIES</r>
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers three
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
3. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the record date of the distribution. The mailing of distribution checks
will begin within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed. If your account is not a tax-deferred retirement account, be
aware of these tax implications.
Distributions are subject to federal income tax, and may also be subject to
state or local taxes. If you live outside the United States, your
distributions could also be taxed by the country in which you reside. Your
distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. A
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS. Money
market funds usually don't
make capital gain
distributions.
(checkmark)
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains. Every January,
Fidelity will send you and the IRS a statement showing the taxable
distributions paid to you in the previous year.
Mutual fund dividends from U.S. government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax advisor for details an d up-to-date
information on the tax laws in your state.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
Like most money market funds, each fund values the securities it owns on
the basis of amortized cost. This method minimizes the effect of changes in
a security's market value and helps each fund to maintain a stable $1.00
share price.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) Each fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees a fund or its transfer agent has
incurred.
(bullet) Each fund reserves the right to limit all accounts maintained or
controlled by any one person to a maximum total balance of $10 million.
(bullet) You begin to earn dividends as of the first business day
following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(bullet) Shares will earn dividends through the date of redemption;
however, shares redeemed on a Friday or prior to a holiday will continue to
earn dividends until the next business day.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) Each fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed when the
NYSE is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.
(bullet) If you sell shares by writing a check and the amount of the check
is greater than the value of your account, your check will be returned to
you and you may be subject to additional charges.
THE FEES FOR INDIVIDUAL TRANSACTIONS are waived if your account balance at
the time of the transaction is $50,000 or more. Otherwise, you should note
the following:
(bullet) The $2.00 checkwriting charge will be deducted from your account.
(bullet) The $5.00 exchange fee will be deducted from the amount of your
exchange.
(bullet) The $5.00 wire fee will be deducted from the amount of your wire.
(bullet) The $5.00 account closeout fee does not apply to exchanges or
wires, but it will apply to checkwriting.
IF YOUR ACCOUNT BALANCE FALLS BELOW $10,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed and the $5.00 account closeout fee will be charged.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Because excessive trading can hurt fund performance and
shareholders, each fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
(bullet) Each fund reserves the right to refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to invest
the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if a fund receives or
anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SPARTAN(registered trademark) MONEY MARKET FUND
SPARTAN(registered trademark) U.S. GOVERNMENT MONEY MARKET FUND
FUNDS OF FIDELITY HEREFORD STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
JUNE 17 , 199 4
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated June 1 7 , 1994). Please retain
this document for future reference. Each fund's Financial statements and
Financial Highlights, included in the Annual Report , for the
fiscal year ended April 30, 1994 are incorporated herein by
reference. To obtain an additional copy of the Prospectus or an Annual
Report, please call Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Distribution and Service Plans
Contracts with Companies Affiliated with FMR
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FTX)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
SPM/SPU-ptb-694
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with a fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940) of the fund. However, except
for the fundamental investment limitations set forth below, the investment
policies and limitations described in this Statement of Additional
Information are not fundamental and may be changed without shareholder
approval.
INVESTMENT LIMITATIONS OF SPARTAN MONEY MARKET FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, (a) more than 25% of the value of its
total assets would be invested in the securities of a single issuer, or (b)
with respect to 75% of its total assets, more than 5% of the value of its
total assets would be invested in the securities of a single issuer, or it
would own more than 10% of the outstanding voting securities of a single
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short;
(4) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that payment of initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts shall not constitute purchasing securities on margin;
(5) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(6) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts); or
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(11) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than a
security issued or guaranteed by the U.S. government or any of its agencies
or instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that the
fund may invest up to 25% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(v) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the fund's limitations on quality and maturity, see the section
entitled "Quality and Maturity" on page .
INVESTMENT LIMITATIONS OF SPARTAN U.S. GOVERNMENT MONEY MARKET FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed by the government of the United States or its agencies or
instrumentalities) if, as a result, (a) more than 25% of the value of its
total assets would be invested in the securities of a single issuer, or (b)
with respect to 75% of its total assets, more than 5% of the value of its
total assets would be invested in the securities of a single issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) sell securities short, unless it owns, or by virtue of ownership of
other securities has the right to obtain, securities equivalent in kind and
amount to the securities sold short, and provided that transactions in
futures contracts and options are not deemed to constitute selling
securities short;
(4) purchase securities on margin, except that the fund may obtain such
short-term credits as are necessary for the clearance of transactions, and
provided that payment of initial and variation margin payments in
connection with transactions in futures contracts and options on futures
contracts shall not constitute purchasing securities on margin;
(5) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment), or (ii) engage in
reverse repurchase agreements, provided that (i) and (ii) in combination
("borrowings"), do not exceed 33 1/3% of the value of the fund's total
assets (other than borrowings). Any borrowings that come to exceed 33 1/3%
of the value of the fund's total assets will be reduced within three days
(exclusive of Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(6) underwrite securities issued by others (except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities);
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(8) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(9) purchase or sell physical commodities unless acquired as a result of
ownership of securities (but this shall not prevent the fund from
purchasing and selling futures contracts); or
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(11) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than a
security issued or guaranteed by the U.S. government or any of its agencies
or instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that the
fund may invest up to 25% of its total assets in the first tier securities
of a single issuer for up to three business days.
(ii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iv) The fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(v) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(vii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to purchase warrants. Warrants
acquired by the fund in units or attached to securities are not subject to
this limitation.
(x) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(xi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the fund's limitations on quality and maturity, see the section
entitled "Quality and Maturity" below .
INVESTMENT POLICIES OF SPARTAN MONEY MARKET FUND
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the U.S.,
U.S. branches and agencies of foreign banks, and foreign branches of
foreign banks. The fund may also invest in U.S. dollar-denominated
securities issued or guaranteed by other U.S. or foreign issuers, including
U.S. and foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks. The fund may purchase obligations of banks, savings and
loan institutions, and other financial institutions whose creditworthiness
might not otherwise meet the fund's standards, provided that (i) the
principal amount of the instrument acquired by the fund is insured in full
by the FDIC, and (ii) the aggregate investment made in any one such bank or
institution does not exceed $100,000.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidences of
ownership of portfolio securities may be held outside of the U.S. and the
fund may be subject to the risks associated with the holding of such
property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest. Additionally, there may be less public
information available about foreign banks and their branches. Foreign
issuers may be subject to less governmental regulation and supervision than
U.S. issuers. Foreign issuers also generally are not bound by uniform
accounting, auditing, and financial reporting requirements comparable to
those applicable to U.S. issuers.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security. However, in general, the fund anticipates
holding restricted securities to maturity or selling them in an exempt
transaction.
INVESTMENT POLICIES SHARED BY THE FUNDS
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high quality, a
security must be a U.S. government security; rated in accordance with
applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security); or, if unrated,
judged to be of equivalent quality by FMR. High-quality securities, other
than U.S. government securities, are divided into "first tier" and "second
tier" securities. First tier securities have received the highest rating
(e.g., Standard & Poor's Corporation's A-1 rating) from at least two
rating services (or one, if only one has rated the security). Second tier
securities have received ratings within the two highest rating categories
(e.g., S&P's A-1 or A-2) from at least two rating services (or one, if
only one has rated the security), but do not qualify as first tier
securities. If a security has been assigned different ratings by different
rating services, at least two ratings services must have assigned the
higher rating in order for FMR to determine eligibility on the basis of
that higher rating. Based on procedures adopted by the Board of Trustees,
FMR may determine that an unrated security is of equivalent quality to a
rated first or second tier security.
Spartan Money Market may not invest more than 5% of its total assets in
second tier securities. In addition, each fund may not invest more than 1%
of its total assets or $1 million (whichever is greater) in the second tier
securities of a single issuer.
Each fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund u nder the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
ASSET-BACKED SECURITIES may include pools of mortgages, loans, receivables
or other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities, and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. The value of asset-backed securities may also be
affected by the creditworthiness of the servicing agent for the pool, the
originator of the loans or receivables, or the financial institution(s)
providing the credit support.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the funds' investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the funds' investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the funds' rights and
obligations relating to the investment). Investments currently considered
by the funds to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days. Also, with
respect to Spartan Money Market Fund, FMR may determine some restricted
securities and time deposits to be illiquid. In the absence of market
quotations, illiquid investments are valued for purposes of monitoring
amortized cost valuation at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets were invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security (and more than
seven days in the future). Typically, no interest accrues to the purchaser
until the security is delivered.
When purchasing securities on a delayed-delivery basis, a fund assumes the
rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
each fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the funds will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, a fund could miss a
favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
VARIABLE OR FLOATING RATE OBLIGATIONS bea r variable or floating
interest rates and carry rights that permit holders to demand payment of
the unpaid principal balance plus accrued interest from the issuers or
certain financial intermediaries. Floating rate instruments have interest
rates that change whenever there is a change in a designated base rate
while variable rate instruments provide for a specified periodic adjustment
in the interest rate. These formulas are designed to result in a market
value for the instrument that approximates its par value.
A demand instrument with a conditional demand feature must have received
both a short-term and a long-term high-quality rating or, if unrated, have
been determined to be of comparable quality pursuant to procedures adopted
by the Board of Trustees. A demand instrument with an unconditional demand
feature may be acquired solely in reliance upon a short-term high-quality
rating or, if unrated, upon a finding of comparable short-term quality
pursuant to procedures adopted by the Board of Trustees.
A fund may invest in variable or floating rate instruments that ultimately
mature in more than 397 days, if the fund acquires a right to sell the
instruments that meets certain requirements set forth in Rule 2a-7.
Variable rate instruments (including instruments subject to a demand
feature) that mature in 397 days or less and U.S. government securities
with a variable rate of interest adjusted no less frequently than 762 days
may be deemed to have maturities equal to the period remaining until the
next readjustment of the interest rate. Other variable rate instruments
with demand features may be deemed to have a maturity equal to the period
remaining until the next adjustment of the interest rate or the period
remaining until the principal amount can be recovered through demand. A
floating rate instrument subject to a demand feature may be deemed to have
a maturity equal to the period remaining until the principal amount can be
recovered through demand.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. A fund may engage in repurchase agreements with respect to any
security in which it is authorized to invest, even if the underlying
security matures in more than 397 days. While it does not presently appear
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities,
as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy to limit repurchase
agreement transactions to those parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of a fund's
assets and may be viewed as a form of leverage.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. Each fund may purchase U.S. Treasury STRIPS
(Separate Trading of Registered Interest and Principal of Securities),
which are created when the coupon payments and the principal payment are
stripped from an outstanding Treasury bond by the Federal Reserve Bank.
Bonds issued by the Resolution Funding Corporation can also be stripped in
this fashion and are eligible investments for the funds.
Each fund can purchase privately stripped government securities, which are
created when a dealer deposits a Treasury security or federal agency
security with a custodian for safekeeping and then sells the coupon
payments and principal payment that will be generated by this security.
Proprietary receipts, such as Certificates of Accrual on Treasury
Securities (CATS), Treasury Investment Growth Receipts (TIGRS), and generic
Treasury Receipts (TRs), are stripped U.S. Treasury securities that are
separated into their component parts through trusts created by their broker
sponsors. Bonds issued by the Financing Corporation (FICO) can also be
stripped in this fashion.
Because of the SEC's views on privately stripped government securities, the
funds must evaluate them as they would non-government securities pursuant
to regulatory guidelines applicable to all money market funds. Accordingly,
Spartan U.S. Government Money Market Fund will not treat such obligations
as U.S. government securities for purposes of the 65% portfolio composition
test. In addition, both funds currently intend to purchase only those
privately stripped government securities that have either received the
highest rating from two nationally recognized rating services (or one, if
only one has rated the security) or, if unrated, been judged to be of
equivalent quality by FMR pursuant to procedures adopted by the Board of
Trustees.
INTERFUND BORROWING PROGRAM. Each fund has received permission from the SEC
to lend money to and borrow money from other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally will extend overnight,
but can have a maximum duration of seven days. Loans may be called on one
day's notice. The funds will lend through the program only when the returns
are higher than those available at the same time from other short-term
instruments (such as repurchase agreements), and will borrow through the
program only when the costs are equal to or lower than the cost of bank
loans. The fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
SHORT SALES "AGAINST THE BOX". A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind or amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund enters into a short sale against the box, it will be required to
set aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contracts. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. Securities purchased and sold
by the funds generally will be traded on a net basis (i.e., without
commission). In selecting broker-dealers, subject to applicable limitations
of the federal securities laws, FMR consider s various relevant
factors, including, but not limited to, the size and type of the
transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability, and
financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; and the reasonableness
of any commissions. Since FMR has granted investment management
authority to the sub-adviser, (see the section entitled "Management
Contracts"), the sub-adviser will be authorized to place orders for the
purchase and sale of securities, and will do so in accordance with the
policies described below.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). FMR maintains a listing of broker-dealers who
provide such services on a regular basis. However, as many transactions on
behalf of the funds are placed with broker-dealers (including
broker-dealers on the list) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such
transactions directed to such broker-dealers solely because such services
were provided. The selection of such broker-dealers is generally made by
FMR (to the extent possible consistent with execution considerations),
based upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and, conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
funds to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to each
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of
FMR Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such requirements, the Board of
Trustees has authorized FBSI to execute fund portfolio transactions on
national securities exchanges in accordance with approved procedures and
applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of th e fund s and review the commissions paid by
each fund over representative periods of time to determine if they are
reasonable in relation to the benefits to each fund.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of the funds are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as e ach fund
i s concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that the
desirability of retaining FMR as investment adviser to the funds outweighs
any disadvantages that may be said to exist from exposure to simultaneous
transactions.
VALUATION OF PORTFOLIO SECURITIES
Each fund values its investments on the basis of amortized cost. This
technique involves valuing an instrument at its cost as adjusted for
amortization of premium or accretion of discount rather than its value
based on current market quotations or appropriate substitutes which reflect
current market conditions. The amortized cost value of an instrument may be
higher or lower than the price the fund would receive if it sold the
instrument.
Valuing a fund's instruments on the basis of amortized cost and use of the
term "money market fund" are permitted by Rule 2a-7 under the Investment
Company Act of 1940. The funds must adhere to certain conditions under Rule
2a-7.
The Board of Trustees of the trust oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize the funds' net asset value (NAV) at $1.00. At such intervals as
they deem appropriate, the Trustees consider the extent to which NAV
calculated by using market valuations would deviate from $1.00 per share.
If the Trustees believe that a deviation from a fund's amortized cost per
share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, each fund's yield based on
amortized cost may be higher than the yield based on market valuations.
Under these circumstances, a shareholder in the fund would be able to
obtain a somewhat higher yield than would result if the fund utilized
market valuations to determine its NAV. The converse would apply in a
period of rising interest rates.
PERFORMANCE
Each fund may quote its performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each fund's yield and total return
fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute each fund's yield for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. Each fund may
also calculate an effective yield by compounding the base period return
over a one year period. In addition to current yield, each fund may quote
yields in advertising based on any historical seven-day period.
Yield information may be useful in reviewing the funds' performance and in
providing a basis for comparison with other investment alternatives.
However, the funds' yields fluctuate, unlike investments that pay a fixed
interest rate over a stated period of time. The funds' yields are
calculated on the same basis as other money market funds, as required by
applicable regulations. When comparing investment alternatives, investors
should also note the quality and maturity of the portfolio securities of
the investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates the
funds' yields will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the funds' yields will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the current yields of the funds. In
periods of rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's returns, including the effect of reinvesting dividends
and capital gain distributions (if any), and any change in the fund's NAV
over a period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the entire period. For
example, a cumulative total return of 100% over 10 years would produce an
average annual total return of 7.18%, which is the steady annual rate that
would equal 100% growth on a compounded basis in 10 years. While average
annual returns are a convenient means of comparing investment alternatives,
investors should realize that a fund's performance is not constant over
time, but changes from year to year, and that average annual total returns
represent averaged figures as opposed to the actual year-to-year
performance of the funds.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price, if any) in order to illustrate the relationship of these
factors and their contributions to total return. An example of this type of
illustration is given below. Total returns may be quoted on a before-tax or
after-tax basis. Total returns, yields, and other performance information
may be quoted numerically or in a table, graph, or similar illustration and
may omit or include the effect of the funds' $5.00 account closeout fee or
other charges for special transactions or services. Omitting fees and
charges will cause a fund's total return figures to be higher.
HISTORICAL FUND RESULTS. The following table shows each fund's yields and
total returns for the periods ended April 30, 199 4 . The total
r eturn figures presented below include the effect of the funds'
$5.00 account closeout fee.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
7-Day Life of Life of
Yield One Year Five Years Fund One Year Five Years Fund*
</TABLE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C>
Spartan Money Market Fund**
3.58 % 3.13 % 5.82 % 6.02 % 3.13 % 32.70% 36.09 %
Spartan U.S. Government Money
3.34 % 2.88 % n/a 5.01 % 2.88 % n/a 22.99 %
Market Fund **
</TABLE>
* Spartan Money Market Fund and Spartan U.S. Government Money Market Fund
commenced operations on January 23, 1989 and February 5, 1990,
respectively.
** If FMR had not reimbursed certain fund expenses during the period,
Spartan Money Market Fund's seven-day yield would have been 3.50 %
and each fund s' total returns would have been lower.
The following tables compare each fund's total returns for the fiscal
periods shown to the record of the Standard & Poor's 500 Composite
Stock Price Index (S&P 500 (Registered trademark)), the Dow Jones
Industrial Average (DJIA), and the cost of living (as measured by the
Consumer Price Index, or CPI) over the same periods. The S&P 500 and
DJIA comparisons are provided to show how each fund's total return compared
to the return of common stocks over the same periods. Of course, since the
funds invest in short-term, fixed-income securities, common stocks
represent a different type of investment from the funds. Common stocks
generally offer greater growth potential than the funds, but generally
experience greater price volatility, which may mean a greater potential for
loss. In addition, common stocks generally provide lower income than money
market investments such as the funds. The S&P 500 and DJIA are based on
the prices of unmanaged groups of stocks and, unlike the funds' returns,
their returns do not include the effect of paying brokerage commissions or
other costs of investing.
SPARTAN MONEY MARKET. During the period from January 23, 1989 ,
(commencement of operations) through April 30, 1994, a hypothetical $10,000
investment in Spartan Money Market Fund would have grown to $ 13,609 ,
assuming all distributions were reinvested. This was a period of widely
fluctuating interest rates and should not be considered representative of
the dividend income or capital gain or loss that could be realized from an
investment in the fund today.
SPARTAN MONEY MARKET FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Period Initial Reinvested Reinvested Cost
Ended $10,000 Dividend Capital Gain Total of
April 30 Investment Distributions Distributions Value S&P DJIA Living**
500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $ 10,000 $ 3,609 $ 0 $ 13,609 $ 18,598 $ 19,604 $ 12,172
1993 10,000 3,195 0 13,195 17,658 17,748 11,891
1992 10,000 2,748 0 12,748 16,163 16,883 11,519
1991 10,000 2,093 0 12,093 14,172 14,074 11,164
1990 10,000 1,211 0 11,211 12,050 12,466 10,644
1989* 10,000 255 0 10,255 10,899 10,931 10,165
</TABLE>
* From January 23, 1989 (commencement of operations)
** Starting at month-end closest to initial investment date
Explanatory Notes: With an initial investment of $10,000 made on January
23, 1989 , the net amount invested in fund shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends for the period covered (their cash value at the
time they were reinvested), amounted to $ 13,609 . If distributions
had not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments (dividends) for the
period would have amounted to $ 3,091 . The fund did not distribute
any capital gains during the period. If FMR had not reimbursed the fund for
certain expenses, these figures would have been lower. Tax consequences of
different investments have not been factored into the figures above. The
figures in the table do not include the effect of the fund's $5.00 account
closeout fee.
SPARTAN U.S. GOVERNMENT MONEY MARKET FUND. During the period from February
5, 1990 (commencement of operations) through April 30, 1994, a hypothetical
$10,000 investment in Spartan U.S. Government Money Market Fund would have
grown to $ 12,300, assuming all distributions were reinvested. This
was a period of widely fluctuating interest rates and should not
necessarily be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in the fund today.
SPARTAN U.S. GOVERNMENT MONEY MARKET FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Period Initial Reinvested Reinvested Cost
Ended $10,000 Dividend Capital Gain Total of
April 30 Investment Distributions Distributions Value S&P DJIA Living**
500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $ 10,000 $ 2,300 $ 0 $ 12,300 $ 15,550 $ 16,198 $ 11,570
1993 10,000 1,954 0 11,954 14,764 14,664 11,303
1992 10,000 1,579 0 11,579 13,513 13,950 10,950
1991 10,000 993 0 10,993 11,849 11,629 10,612
1990* 10,000 194 0 10,194 10,075 10,301 10,118
</TABLE>
* From February 5, 1990 (commencement of operations).
** Starting at month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on February
5, 1990, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested dividends for the period covered (their cash value at the time
they were reinvested), amounted to $ 12,300 . If distributions had not
been reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments (dividends) for the period would
have amounted to $ 2,075. If FMR had not reimbursed the fund for
certain expenses, these figures would have been lower. Tax consequences of
different investments have not been factored into the above figures. The
figures in the table do not include the effect of the fund's $5.00 account
closeout fee.
In addition to quoting performance rankings, each fund may compare its
total expense ratio to the average total expense ratio of all money market
funds as tracked by Lipper. A fund's total expense ratio is a significant
factor in comparing money market investments because of its effect on net
yield. According to Lipper Analytical Services, Inc., First Edition 1994,
the average expense ratio for money market instrument funds for the year
ended April 30, 1994 , was . 75 %.
Each fund may also compare its performance to several products offered by
banks and thrifts. The funds may compare their yields, both their seven-day
yields and their effective yields, to those of money market accounts, Super
NOW accounts, and certificates of deposit quoted in the BANK RATE MONITOR
National Index(double dagger), an average of the quoted rates for
100 leading banks and thrifts in ten U.S. cities, chosen to
represent the ten largest Consumer Metropolitan Statistical Areas. Unlike
the funds, certain bank and thrift products such as money market deposit
accounts, Super NOW Accounts, and certificates of deposit are insured by
the Federal Deposit Insurance Corporation. BANK RATE MONITOR
National Index(double dagger) is published by Financial Rates Inc., Box
088888 of North Palm Beach, Florida 33408.
In addition, the funds may compare their yields to the Auction Average
Discount Rate for 182-day Treasury Bills. Six-month Treasury bills are
issued at a discount from their face value at weekly auctions.
Consequently, a bill's yield is quoted as a yield to maturity reflecting
the accretion of the discount as the bill matures. The funds may also
compare their yields to the federal funds rate, which is the interest rate
that banks charge each other for overnight loans through the Federal
Reserve System to meet reserve requirements. Both the yield on six-month
Treasury bills and the federal funds rate are considered to be sensitive
indicators of interest rate trends.
The funds' performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings prepared
by Lipper Analytical Services, Inc. (Lipper), an independent service
located in Summit, New Jersey that monitors the performance of mutual
funds. Lipper generally ranks funds on the basis of total return, assuming
reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, a fund's performance may be compared to mutual fund
performance indices prepared by Lipper.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in
advertising. A fund may be compared in advertising to Certificates of
Deposit (CDs) or other investments issued by banks. Mutual funds differ
from banks in several respects. For example, a fund may offer greater
liquidity or higher potential returns than CDs. A fund does not guarantee
your principal or return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial strategies.
Such information may include materials that describe general
principles of investing, such as asset allocation, diversification, risk
tolerance, and goal setting; questionnaire s designed to help create
a personal financial profile; action plan s offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and other Fidelity funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The funds may compare their performance, or the performance of securities
in which they may invest, to averages published by IBC USA (Publications),
Inc. of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES/All Taxable and MONEY
FUND AVERAGES/Government, which are reported in the MONEY FUND
REPORT (registered trademark) , cover over 500 taxable and 150
government money market funds, respectively.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, CUSIP
number, and discuss or quote its current portfolio manager.
A fund may be available for purchase through retirement plans or other
programs offering deferral of or exemption from income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 5 % annually would have an
after-tax value of $ 1,380 after ten years, assuming tax was deducted
from the return each year at a 36 % rate. An equivalent tax-deferred
investment would have an after-tax value of $ 1,414 after ten years,
assuming tax was deducted at a 36 % rate from the tax-deferred
earnings at the end of the 10-year period.
From time to time, the funds may reference the U.S. Personal Savings Rate
as quoted by the Department of Commerce. The Personal Savings Rate is
defined as that part of personal income which is neither paid out in taxes
nor spent on goods and services. The funds may also quote from commentary
which appears in published newspapers, magazines, and other periodicals.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry.
As of April 30, 1994, FMR managed 32 Spartan funds with
approximately $ 20 billion in assets.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its NAV is calculated each day the New
York Stock Exchange (NYSE) is open for trading. The NYSE has designated the
following holiday closings for 1994: Washington's Birthday (observed), Good
Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day (observed). Although FMR expects the same holiday
schedule, with the addition of New Year's Day, to be observed in the
future, the NYSE may modify its holiday schedule at any time.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, a fund's NAV may be affected on days when investors do
not have access to the fund to purchase or redeem shares.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each fund is required to give shareholders at least 60 days' notice
prior to terminating or modifying its exchange privilege. Under the Rule,
the 60-day notification requirement may be waived if (i) the only effect of
a modification would be to reduce or eliminate an administrative fee,
redemption fee, or deferred sales charge ordinarily payable at the time of
an exchange, or (ii) a fund suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the rules and regulations
thereunder, or the fund to be acquired suspends the sale of its shares
because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because the funds' income is primarily derived from interest,
dividends from the funds normally will not qualify for the
dividends-received deduction available to corporations. The funds will send
each shareholder a notice in January describing the tax status of dividends
and capital gain distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often, as necessary, to
maintain its net asset value at $1.00 per share. Short-term capital gains
distributed by the funds are taxable to shareholders as dividends, not as
capital gains. Distributions from short-term capital gains do not qualify
for the dividends-received deduction.
TAX STATUS OF THE FUNDS. Each fund has qualified and intends to continue to
qualify each year as a "regulated investment company" for tax purposes so
that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify as a regulated investment
company and avoid being subject to federal income or excise taxes at the
fund level, each fund intends to distribute substantially all of its net
investment income and net realized capital gains (if any) within each
calendar year as well as on a fiscal year basis. Each fund is treated as a
separate entity for tax purpose s .
As of April 30, 1994, the funds had capital loss carryovers available to
offset future capital gains, approximated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Aggregate
Capital Loss Amounts that Expire on April 30,
Fund Carryovers 1999 2001 2002
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Spartan U.S. Government
$ 81,000 $ 20,000 $ 10,000 $ 51,000
Money Market
Spartan Money Market $ 2,193,000 -- $ 301,000 $ 1,892,000
</TABLE>
To the extent that capital loss carryovers are used to offset any future
capital gains, it is unlikely that the gains so offset will be distributed
to shareholders since any such distributions may be taxable to shareholders
as ordinary income.
STATE AND LOCAL TAXES. For mutual funds organized as business trusts, state
law provides for a pass-through of the s t ate and local income tax
exemption afforded to direct owners of U.S. government securities. Some
states limit this pass through to mutual funds that invest a certain amount
in U.S. government securities, and some types of securities, such as
repurchase agreements and some agency backed securities, may not qualify
for this pass-through benefit. The tax treatment of your dividend
distributions from Spartan U.S. Government Money Market Fund will be
the same as if you directly owned your proportionate share of the U.S.
government securities in the fund's portfolio. Because the income earned on
most U.S. government securities in which the fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
attributable to these securities will also be free from income taxes. The
exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. government securities.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the funds and their shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders of the funds may be subject
to state and local taxes on distributions received from a fund. Investors
should consult their tax advisors to determine whether the funds are
suitable to their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far
East), both wholly owned subsidiaries of FMR formed in 1986, supply
investment research, and may supply portfolio management services, to FMR
in connection with certain funds advised by FMR. Analysts employed by FMR,
FMR U.K., and FMR Far East research and visit thousands of domestic and
foreign companies each year. FTX, a wholly owned subsidiary of FMR formed
in 1989, supplies portfolio management and research services in connection
with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. Trustees and officers elected or
appointed to Fidelity Summer Street Trust prior to each fund's conversion
from a fund of that trust to a fund of Fidelity Hereford Street Trust
served Fidelity Summer Street Trust in identical capacities. All persons
named as Trustees also serve in similar capacities for other funds advised
by FMR. Unless otherwise noted, the business address of each Trustee and
officer is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. Those Trustees who are "interested persons" (as defined
in the Investment Company Act of 1940) by virtue of their affiliation with
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994, he
was President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous waste,
1993) and CH2M Hill Companies (engineering). In addition, he served on the
Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc. (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as a
Trustee of First Union Real Estate Investments, Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1 - North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989),
is Chairman of G.M. Management Group (strategic advisory services). Prior
to his retirement in July 1988, he was Chairman and Chief Executive Officer
of Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee.
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee of Corporate Property Investors, the EPS
Foundation at Trinity College, the Naples Philharmonic Center for the Arts,
and Rensselaer Polytechnic Institute and he is a member of the Advisory
Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership
Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
LELAND BARRON, is Vice President of Spartan U.S. Government Money Market
Fund and of other funds advised by FMR and is an employee of FTX.
JOHN TODD, is Vice President of Spartan Money Market Fund and of other
funds advised by FMR and is an employee of FTX.
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President - Legal of FMR Corp., and Vice President and
Clerk of FDC.
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas (1990).
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the funds based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of April 30, 1994, the Trustees and officers of the funds owned in the
aggregate less than __% of the outstanding shares of each fund.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing the fund's investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the trust or FMR
performing services relating to research, statistical, and investment
activities. In addition, FMR or its affiliates, subject to the supervision
of the Board of Trustees, provide the management and administrative
services necessary for the operation of the funds. These services include
providing facilities for maintaining each fund's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters, and other persons dealing with the funds; preparing all
general shareholder communications and conducting shareholder relations;
maintaining the funds' records and the registration of the funds' shares
under federal and state law; developing management and shareholder services
for the funds; a nd furnishing reports, evaluations, and analyses on
a variety of subjects to the Board of Trustees.
FMR is responsible for the payment of all expenses of the funds with
certain exceptions. Specific expenses payable by FMR include, without
limitation, the fees and expenses of registering and qualifying the funds
and their shares for distribution under federal and state securities laws;
expenses of typesetting for printing the prospectus and statements of
additional information; custodian charges; audit and legal expenses;
insurance expense; association membership dues; and the expenses of mailing
reports to shareholders, shareholder meetings, and proxy solicitations. FMR
also provides for transfer agent and dividend disbursing services and
portfolio and general accounting record maintenance through FSC.
FMR pays all other expenses of the funds with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the trust or FMR (the non-interested Trustees); interest on
borrowings; taxes; brokerage commissions (if any); and such nonrecurring
expenses as may arise, including costs of any litigation to which the funds
may be a party, and any obligation they may have to indemnify the officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated
April 1, 1994, which were approved by shareholders on March 23,
1994.
Effective June 17, 1994, each fund will convert from a series of
Fidelity Summer Street Trust, a Massachusetts business trust, to a series
of Fidelity Hereford Street Trust, a Delaware business trust,
pursuant to an Agreement and Plan of Conversion approved by shareholders
of each fund on March 23, 1994. On June 17, 1994, Fidelity Summer
Street Trust, as sole shareholder of the funds approved, a new
management contract for each fund in conjunction with the Agreement and
Plan of Conversion. Besides reflecting the funds' redomiciling, the June
17, 1994 contract is identical to each fund's prior management contract
with FMR, which was approved by shareholders on March 23, 1994. For the
services of FMR under the contracts, each fund pays FMR a monthly
management fee at the annual rate of .45% of the fund's average net assets
throughout the month. FMR reduces its fee by an amount equal to the fees
and expenses of the non-interested Trustees.
Prior to April 1, 1994, FMR was Spartan Money Market Fund's manager
pursuant to a management contract dated December 1, 1988, which was
approved by the fund's shareholders on October 18, 1989. For the services
of FMR under the contract, Spartan Money Market Fund paid FMR a monthly
management fee at the annual rate of .30% of its average net assets, plus
6% of that portion of gross income (if any) that represented a gross yield
in excess of 5%. The maximum fee rate was .60% of the fund's average net
assets for the month. FMR was also Spartan U.S. Government Money Market
Fund's manager pursuant to a management contract dated February 3, 1990,
which was approved by the fund's shareholders on November 19, 1990. For the
services of FMR under the contract, Spartan U.S. Government Money Market
Fund paid FMR a monthly management fee at the annual rate of .55% of the
fund's average net assets throughout the month. FMR had voluntarily agreed
to limit each fund's total operating expenses to an annual rate of .45% of
its average net assets through December 31, 1995.
FMR may, from time to time, voluntarily reimburse all or a portion of a
fund's operating expenses (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). Effective June 1,
1994, FMR has voluntarily agreed to limit Spartan Money Market Fund's total
operating expenses to an annual rate of . 42 % of its average
net assets. The following tables outline expense limitations (as a
percentage of the funds' average net assets) in effect for the
fiscal years ended April 30, 1994, 1993, and 1992.
SPARTAN MONEY MARKET FUND
From To Expense Limitation
May 1, 1991 April 30, 1994 .37%
Management Fee Amount of
Fiscal Year Before Reimbursement Reimbursement
1994 $ 14,254,281 $ 397,802
1993 14,485,665 0
1992 20,354,929 0
SPARTAN U.S. GOVERNMENT MONEY MARKET FUND
From To Expense Limitation
March 1, 1992 March 3 1, 1994 .45%
September 19, 1991 February 29, 1992 .42%
June 1, 1991 September 18, 1991 .37%
April 1, 1991 May 31, 1991 .35%
Management Fee Amount of
Fiscal Year Before Reimbursement Reimbursement
1994 $ 4,328,130 $ 736,316
1993 6,616,588 1,204,783
1992 9,709,770 2,630,972
To defray shareholder service costs, FMR or its affiliates also collect the
funds' $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and $2.00 checkwriting charge. Shareholder
transaction fees and charges collected for fiscal 1994, 1993, and
1992 are indicated in the following table.
SPARTAN MONEY MARKET FUND
Account
Fiscal Exchange Closeout Wire Checkwriting
Year Fees Fees Fees Charge
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1994 $ 211,175 $ 19,284 $ 10,860 $ 80,356
1993 388,002 28,449 33,420 167,762
1992 554,142 34,053 54,785 270,140
</TABLE>
SPARTAN U.S. GOVERNMENT MONEY MARKET FUND
Account
Fiscal Exchange Closeout Wire Checkwriting
Year Fees Fees Fees Charge
1994 $ 30,505 $ 4,127 $ 1,965 $ 12,909
1993 81,758 6,025 9,235 35,04 0
1992 136,700 7,474 15,340 60,296
SUB-ADVISER. With respect to each fund, FMR has entered into a sub-advisory
agreement with FTX pursuant to which FTX has primary responsibility for
providing portfolio investment management services to the fund. Under each
sub-advisory agreement, FMR pays FTX fees equal to 50% of the management
fee payable to FMR under its management contract with each fund. The fees
paid to FTX are not reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time. For fiscal 1994,
1993, and 1992, FMR paid FTX fees of $ 7,127,141 , $ 7,242,833 ,
and $ 10,177,465, respectively, for Spartan Money Market Fund and
$ 2,164,065 , $ 3,308,294 , and $ 4,854,885 , respectively,
for Spartan U.S. Government Money Market Fund.
DISTRIBUTION AND SERVICE PLANS
Each fund has adopted a distribution and service plan (the plan) under Rule
12b - 1 under the Investment Company Act of 1940 (the Rule). The Rule
provides in substance that a mutual fund may not engage directly or
indirectly in financing any activity that is primarily intended to result
in the sale of shares of the fund except pursuant to a plan adopted by the
fund under the Rule. The Board of Trustees has adopted the plan to allow
each fund and FMR to incur certain expenses that might be considered to
constitute indirect payment by the fund of distribution expenses. Under
the plan, if the payment by a fund to FMR of manag ement fees should be
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the plan.
Each plan specifically recognizes that FMR, either directly or through FDC,
may use its management fee revenue, past profits, or other resources,
without limitation, to pay promotional and administrative expenses in
connection with the offer and sale of shares of the funds. In addition,
the plan provides that FMR may use its resources, including its
management fee revenue, to make payments to third parties that provide
assistance in selling a fund's shares, or to third parties, including
banks, that render shareholder support services. The Trustees have not
authorized such payments to date.
Each fund's plan has been approved by the Trustees. As required by
the Rule, the Trustees carefully considered all pertinent factors relating
to the implementation of the plan prior to its approval, and have
determined that there is a reasonable likelihood that the plan will benefit
the fund and its shareholders. In particular, the Trustees noted
that the plan does not authorize payments by a fund other than those made
to FMR under its management contract with the fund. To the extent that the
Plans give FMR and FDC greater flexibility in connection with the
distribution of shares of the funds, additional sales of the funds' shares
may result. Additionally, certain shareholder support services may be
provided more effectively under the plan by local entities with whom
shareholders have other relationships. Each plan was approved by Fidelity
Summer Street Trust on June 17, 1994 as the then sole shareholder of
the funds, pursuant to an Agreement and Plan of Conversion approved by
public shareholders of the funds on March 23, 1994.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. The funds may execute portfolio
transactions with and purchase securities issued by depository institutions
that receive payments under the plan. No preference will be shown in the
selection of investments for the instruments of such depository
institutions. In addition, state securities laws on this issue may differ
from the interpretations of federal law expressed herein, and banks and
other financial institutions may be required to register as dealers
pursuant to state law.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC performs transfer agency, dividend disbursing, and shareholder
servicing functions for the funds. FSC also calculates each fund's
net asset value per share and dividends, and maintains each fund's general
accounting records. The costs of these services are borne by FMR
pursuant to its management contract with the funds.
Each fund has a distribution agreement with FDC, a Delaware corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. Each fund's distribution agreement calls for
FDC to use all reasonable efforts, consistent with its other business, to
secure purchasers for shares of the fund, which are continuously offered at
net asset value. Promotional and administrative expenses in connection with
the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Spartan Money Market Fund and Spartan U.S. Government
Money Market Fund are funds of Fidelity Hereford Street Trust, an open-end
management investment company organized as a Delaware business trust on
November 18, 1993. The funds acquired all of the assets of Spartan Money
Market Fund and Spartan U.S. Government Money Market Fund, respectively, of
Fidelity Summer Street Trust on June 17, 1994. Currently there are two
funds of Fidelity Hereford Street Trust: Spartan Money Market Fund and
Spartan U.S. Government Money Market Fund. The Trust Instrument permits the
Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the trust and requires
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instrument provides for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which Delaware law does not apply, no contractual
limitation of liability was in effect, and the fund is unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is extremely remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the trust or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value per share you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of redemption,
and the privilege of exchange are described in the Prospectus. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10% or
more of the trust or a fund may, as set forth in the Trust Instrument, call
meetings of the trust or fund for any purpose related to the trust or fund,
as the case may be, including, in the case of a meeting of the entire
trust, the purpose of voting on removal of one or more Trustees.
The trust or any fund may be terminated upon the sale of its assets to, or
merger with, another open-end management investment company or series
thereof, or upon liquidation and distribution of its assets. Generally such
terminations must be approved by vote of the holders of a majority of the
trust or the fund, as determined by the current value of each shareholder's
investment in the fund or trust; however, the Trustees may, without prior
shareholder approval, change the form of organization of the trust by
merger, consolidation, or incorporation. If not so terminated or
reorganized, the trust and its funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the trust registration
statement. Each fund may invest all of its assets in another investment
company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of Spartan Money Market Fund's assets. Morgan Guaranty Trust
Company of New York, 60 Wall Street, New York, New York, is custodian of
Spartan U.S. Government Money Market Fund's assets. The custodian is
responsible for the safekeeping of the funds' assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the funds or in deciding which
securities are purchased or sold by the funds. The funds may, however,
invest in obligations of the custodian and may purchase securities from or
sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand, 1999 Bryan Street, Dallas, Texas, serves as
the trust's independent accountant. The auditor examines financial
statements for the funds and provides other audit, tax, and related
services.
FINANCIAL STATEMENTS
The funds' financial statements and financial highlights for the
fiscal year ended April 30, 1994 are included in each fund's Annual
Report, which is a separate report supplied with this Statement of
Additional I nformation . The funds' financial statements and
financial highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics:
(bullet) Leading market positions in well established industries.
(bullet) High rates of return on funds employed.
(bullet) Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
(bullet) Broad margins in earning coverage of fixed financial
charges and with high internal cash generation.
(bullet) Well established access to a range of financial markets
and assured sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER
RATINGS:
A - Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2, and 3 to indicate the relative degree of
safety.
A-1 - This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues
determined to possess overwhelming safety characteristics will be denoted
with a plus (+) sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
Moody's applies numerical modifiers, 1, 2, and 3, to the rating
classification Aa in its corporate bond rating system. The modifier 1
indicates that the security ranks in the higher end of the Aa rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of the Aa rating
category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND
RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small
degree.
The AA rating may be modified by the addition of a plus or minus to show
relative standing within the major rating categories.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Effective June 17, 1994, Registrant will succeed to the business
of Fidelity Summer Street Trust: Spartan Money Market Fund. Audited
financial statements and financial highlights for the fiscal year ended
April 30, 1994, are hereby adopted by the Registrant as its own and are
filed herein as Exhibit 24(a)(1).
(a)(2) Effective June 17, 1994, Registrant will succeed to the business
of Fidelity Summer Street Trust: Spartan U.S. Government Money Market Fund.
Audited financial statements and financial highlights for the fiscal year
ended April 30, 1994, are hereby adopted by the Registrant as its own and
are filed herein as Exhibit 24(a)(2).
(b) Exhibits
(1) Trust Instrument dated November 18, 1993 is incorporated herein by
reference to Exhibit 1 of the initial registration statement on Form N-1A.
(2) Bylaws of the Trust are incorporated herein by reference to Exhibit 2
of the initial registration statement on Form N-1A.
(3) Not applicable.
(4) Not applicable.
(5) (a) Form of Management Contract between Spartan Money Market Fund and
Fidelity Management & Research Company is filed herein as Exhibit
5(a).
(b) Form of Management Contract between Spartan U.S. Government Money
Market Fund and Fidelity Management & Research Company is filed herein
as Exhibit 5(b).
(c) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company with respect to Spartan Money Market Fund
is filed herein as Exhibit 5(c).
(d) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company with respect to Spartan U.S. Government
Money Market Fund is filed herein
as Exhibit 5(d).
(6) (a) Form of General Distribution Agreement between Spartan Money
Market Fund and Fidelity Distributors Corporation was filed as Exhibit 6(a)
to the initial Registration Statement on Form N-1A.
(b) Form of General Distribution Agreement between Spartan U.S.
Government Money Market Fund and Fidelity Distributors Corporation was
filed as Exhibit 6(b) to the initial Registration Statement on Form N-1A.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, dated November 1, 1989 is incorporated herein by
reference to Exhibit 7 of the initial Registration Statement on Form N-1A.
(8) (a) Form of Custodian Agreement between Fidelity Hereford Street
Trust: Spartan Money Market Fund and Bank of New York was filed as Exhibit
8(a) to the initial Registration Statement on Form N-1A.
(b) Form of Custodian Agreement between Fidelity Hereford Street Trust:
Spartan U. S. Government Money Market Fund and Morgan Guaranty Trust
Company was filed as Exhibit 8(b) to the initial Registration Statement on
Form N-1A.
(c) Form of Appendix A, B and C under Custodian Contract between
Registrant and Bank of New York were filed as Exhibit 8(c) to the initial
Registration Statement on Form N-1A.
(d) Form of Appendix A and C under Custodian Contract between Registrant
and Morgan Guaranty Trust Company were filed as Exhibit 8(d) to the
initial Registration Statement on Form N-1A.
(9) (a) Form of Transfer Agent and Service Agreement between Fidelity
Hereford Street Trust and Fidelity Service Company was filed as Exhibit
9(a) to the initial Registration Statement on Form N-1A.
(b) Form of Schedules A (transfer, dividend disbursing and shareholders'
service); B (pricing and bookkeeping); and C (securities lending
transactions) (relating to Spartan Money Market Fund) were filed as Exhibit
9(b) to the initial Registration Statement on Form N-1A.
(10) Not applicable.
(11) Consent of Coopers & Lybrand is filed herein as Exhibit 11.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Money Market Fund is incorporated herein by reference to Exhibit 15(a) of
the initial Registration Statement on Form N-1A.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan U.S.
Government Money Market Fund is incorporated herein by reference to Exhibit
15(b) of the initial Registration Statement on Form N-1A.
(16) Schedule for the computation of performance quotations for Spartan
Money Market Fund is filed herein as Exhibit 16.
Item 25. Persons Controlled by or under Common Control with Registrant
The Registrant's Board of Trustees is the same as the boards of other
funds managed by Fidelity Management & Research Company. In addition,
the officers of these funds are substantially identical. Nonetheless,
Registrant takes the position that it is not under common control with
these other funds since the power residing in the respective boards and
officers arises as the result of an official position with the respective
funds.
Item 26. Number of Holders of Securities
April 30, 1994
Title of Class: Shares of Beneficial Interest
Title of Series Number of Record Holders
Spartan Money Market Fund 102,667
Spartan U.S. Government Money Market Fund 12,852
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Trust
Insturment states that the Registrant shall indemnify any present trustee
or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by virtue
of his or her service as a trustee, officer, or both, and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to be
liable to the Registrant or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties (collectively, "disabling conduct"), or not to have acted in
good faith in the reasonable belief that his or her action was in the best
interest of the Registrant. In the event of a settlement, no
indemnification may be provided unless there has been a determination, as
specified in the Trust Instrument, that the officer or trustee did not
engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company ("Service") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, which names the Transfer Agent and/or the Registrant as a party
and is not based on and does not result from the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its duties, and
arises out of or in connection with the Transfer Agent's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith, negligence or
reckless disregard of its duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc.
and Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc. Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danof Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management
& Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past two
fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity
Management & Research (Far East) Inc. and
Fidelity Management & Research (U.K.) Inc.;
President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far
East) Inc. and Fidelity Management & Research
(U.K.) Inc.; Senior Vice President and Trustee of funds
advised by FMR.
Frederic L. Henning Jr. Senior Vice President of FMR Texas; Money Market
Group Leader.
Leland Baron Vice President of FMR Texas and of funds advised by
FMR.
Thomas D. Maher Vice President of FMR Texas.
Burnell Stehman Vice President of FMR Texas and of funds advised by
FMR.
John Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds advised by
FMR.
Charles F. Dornbush Treasurer of FMR Texas; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
Fidelity Management & Research (Far East) Inc.;
Senior Vice President and Chief Financial Officer of the
Fidelity funds.
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity
Management & Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, for the funds'
respective custodian, The Bank of New York, 110 Washingotn Street, New
York, NY and Morgan Guaranty Trust Company of New York, 61 Wall Street,
37th Floor, New York, NY.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The trustees or shareholders of Fidelity Summer Street Trust have
approved a plan of reorganization ("Plan") between each Fidelity Summer
Street Trust: Spartan Money Market Fund and Spartan U.S. Government Money
Market Fund ("Predecessor funds"), and its successor series of this Trust
whereby all of the assets and liabilities of the Predecessor funds will be
transferred to this Trust. Registrant hereby undertakes that it will
submit by amendment to this registration statement financial statements
reflecting the reorganization described in the Plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 2 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 14th day of
June 1994.
FIDELITY HEREFORD STREET TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee June 14, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer June 14, 1994
Gary L. French
/s/J. Gary Burkhead Trustee June 14, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee June 14, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee June 14, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee June 14, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee June 14, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee June 14, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee June 14, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee June 14, 1994
Edward H. Malone
/s/Marvin L. Mann_____* Trustee June 14, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee June 14, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee June 14, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as President and Board Member (collectively,
the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my
true and lawful attorney-in-fact, with full power of substitution, and with
full power to sign for me and in my name in the appropriate capacity any
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management
& Research Company acts as investment adviser and for which the
undersigned individual serves as a Director, Trustee or General Partner
(collectively, the "Funds"), hereby severally constitute and appoint Arthur
J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana
L. Platt and Stephanie Xupolos, each of them singly, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and my name in the appropriate capacities any
Registration Statements of the Funds on Form N-1A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
EXHIBIT 24(A)(1)
SPARTAN(Registered trademark)
(registered trademark)
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 1994
INVESTMENTS APRIL 30, 1994
Showing Percentage of Total Value of Investments
BANKERS' ACCEPTANCES - 1.3%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
DOMESTIC BANKERS ACCEPTANCE - 0.1%
Chemical Bank
8/15/94 3.87% $ 5,000 $ 4,944
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 1.2%
Bank of Tokyo
5/13/94 3.70 25,000 24,969
Dai-Ichi Kangyo Bank, Ltd.
5/16/94 3.70 50,000 49,924
Sanwa Bank, Ltd.
8/9/94 3.93 4,000 3,957
78,850
TOTAL BANKERS' ACCEPTANCES 83,794
CERTIFICATES OF DEPOSIT - 18.7%
DOMESTIC CERTIFICATES OF DEPOSIT - 0.3%
NBD Bank, N.A.
5/2/94 3.75 20,000 20,000
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 15.5%
Banque Nationale de Paris
8/1/94 3.50 25,000 24,985
8/11/94 3.90 25,000 24,982
8/16/94 3.90 25,000 24,984
8/24/94 3.78 50,000 50,002
Fuji Bank, Ltd.
5/3/94 3.77 25,000 25,000
5/4/94 3.75 7,000 7,000
5/9/94 3.75 40,000 40,000
6/3/94 4.00 38,000 37,997
Industrial Bank of Japan, Ltd.
5/24/94 3.90 50,000 50,000
5/25/94 3.90 50,000 50,000
Mitsubishi Bank, Ltd.
10/18/94 4.60 12,000 11,938
National Bank of Canada
5/5/94 3.30 35,000 35,000
Rabobank Nederland, N.V.
12/22/94 4.00 6,000 5,986
Sakura Bank, Ltd.
5/11/94 3.70 140,000 140,000
5/17/94 3.70 8,000 8,000
5/23/94 3.90 62,000 62,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED
Sanwa Bank, Ltd.
7/19/94 4.23% $ 10,000 $ 10,000
7/20/94 4.23 110,000 110,000
10/19/94 4.60 10,000 9,999
Societe Generale
6/6/94 3.80 25,000 25,000
8/17/94 4.30 25,000 25,000
9/1/94 4.00 150,000 150,000
Sumitomo Bank, Ltd.
5/6/94 3.80 30,000 29,999
5/31/94 3.94 40,000 39,998
997,870
LONDON BRANCH, EURODOLLAR DOLLAR, FOREIGN BANKS - 2.9%
Sanwa Bank, Ltd.
5/9/94 3.79 75,000 75,000
5/26/94 3.85 40,000 40,000
Sumitomo Bank, Ltd.
5/24/94 3.50 25,000 25,000
6/15/94 4.05 45,000 44,988
184,988
TOTAL CERTIFICATES OF DEPOSIT 1,202,858
COMMERCIAL PAPER - 42.8%
American Express Credit Corporation
5/16/94 3.63 35,000 34,947
Associates Corporation of North America
5/4/94 3.76 18,000 17,994
5/16/94 3.64 50,000 49,924
5/24/94 3.77 35,000 34,916
B.B.V. Finance (Delaware), Inc.
5/9/94 3.71 45,000 44,963
5/17/94 3.62 50,000 49,920
5/19/94 3.62 50,000 49,910
Bankers Trust Corporation
5/3/94 3.77 50,000 49,990
Barclays U.S. Funding Corporation
5/3/94 3.74 100,000 99,979
5/9/94 3.83 3,000 2,997
Bear Stearns Companies Inc.
5/23/94 3.86 18,000 17,958
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
BellAtlantic Financial Services
5/2/94 3.66% $ 16,300 $ 16,298
5/2/94 3.76 5,000 4,999
5/16/94 3.72 14,000 13,978
CIESCO, L.P.
5/2/94 3.61 15,000 14,999
CIT Group Holdings, Inc.
5/4/94 3.76 80,000 79,975
5/11/94 3.76 45,000 44,953
Corporate Asset Funding Company, Inc.
5/10/94 3.71 20,000 19,981
Corporate Receivables Corp.
5/9/94 3.76 15,000 14,988
5/16/94 3.63 5,500 5,492
Dean Witter, Discover & Co.
5/5/94 3.80 23,500 23,490
5/10/94 3.78 14,000 13,987
5/12/94 3.81 26,530 26,499
5/18/94 3.86 25,000 24,955
5/23/94 3.84 19,000 18,956
5/24/94 3.76 17,000 16,959
Dresdner U.S. Finance Inc.
8/24/94 3.85 50,000 49,396
8/29/94 3.82 25,000 24,687
Eastman Kodak
5/17/94 3.91 20,000 19,965
Electronic Data Systems Corporation
6/13/94 3.87 7,000 6,968
6/14/94 3.90 16,000 15,924
Ford Motor Credit Corporation
5/6/94 3.73 75,000 74,961
5/19/94 3.84 7,000 6,987
6/8/94 3.95 45,000 44,813
6/13/94 3.95 5,000 4,977
9/6/94 4.08 25,000 24,644
Ford Motor Credit PLC
6/27/94 4.04 10,000 9,937
GTE Corporation
5/3/94 3.73 30,000 29,994
General Electric Capital Corporation
5/15/94 3.71 (a) 25,000 25,000
5/20/94 3.83 30,000 29,940
5/23/94 3.77 50,000 49,885
6/10/94 3.79 (a) 25,000 25,000
8/4/94 3.92 47,600 47,116
9/19/94 4.09 20,000 19,687
General Motors Acceptance Corporation
5/4/94 3.91 20,000 19,994
5/10/94 3.80 2,000 1,998
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
General Motors Acceptance Corporation - continued
5/16/94 3.81% $ 10,000 $ 9,984
5/31/94 3.75 50,000 49,845
6/1/94 3.75 54,000 53,827
6/27/94 4.00 97,000 96,392
Generale Bank
5/16/94 3.43 25,000 24,965
Goldman Sachs Group, L.P. (The)
7/6/94 4.00 115,000 114,167
Government of Canada
10/17/94 4.50 100,000 97,934
Grand Metropolitan Finance
5/31/94 3.45 25,000 24,929
Hanson Finance (UK) PLC
6/1/94 3.85 13,830 13,785
6/1/94 3.89 17,000 16,944
6/2/94 3.86 10,000 9,966
Household Finance Corporation
5/18/94 3.72 28,000 27,951
6/1/94 3.81 20,000 19,935
6/20/94 4.05 18,000 17,899
6/22/94 4.04 50,000 49,710
IBM Corporation
5/18/94 3.76 71,000 70,875
IBM Credit Corporation
5/16/94 3.74 34,000 33,947
5/18/94 3.76 18,000 17,968
5/23/94 3.82 13,000 12,970
ING Bank
6/21/94 4.00 25,000 24,859
ITT Corporation
6/20/94 3.88 22,000 21,882
ITT Financial
5/16/94 3.70 10,000 9,985
5/23/94 3.82 86,000 85,800
Matterhorn Capital Corporation
(LOC Union Bank of Switzerland)
5/9/94 3.61 30,000 29,976
Morgan Stanley Group, Inc.
5/17/94 3.77 75,000 74,875
New Center Asset Trust
5/9/94 3.77 27,000 26,977
5/10/94 3.77 60,000 59,944
New South Wales Treasury Corp.
8/30/94 3.90 45,000 44,421
Norwest Corporation
5/16/94 3.72 10,000 9,985
PHH Corporation
5/2/94 3.76 20,000 19,998
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Preferred Receivables Funding Corporation
5/5/94 3.76% $ 24,200 $ 24,190
Prudential Home Mortgage Company
5/26/94 3.86 8,000 7,979
Ridge Capital Trust II
(LOC Dai-Ichi Kangyo Bank Ltd.)
5/16/94 3.71 9,000 8,986
5/17/94 3.71 10,000 9,984
Sears Roebuck Acceptance Corp.
5/5/94 3.91 8,000 7,997
5/9/94 3.81 2,000 1,998
5/10/94 3.76 5,000 4,995
5/25/94 3.91 43,000 42,888
South Australian Government Financing Authority
5/20/94 3.82 7,000 6,986
Texaco Inc.
5/9/94 3.78 25,000 24,979
5/9/94 3.79 24,000 23,980
5/23/94 3.72 25,000 24,943
Transamerica Corporation
5/17/94 3.64 8,000 7,987
Weyerhaeuser Company
5/2/94 3.76 13,550 13,549
Whirlpool Corporation
5/9/94 3.84 14,006 13,994
Whirlpool Financial Corporation
5/9/94 3.71 7,000 6,994
Woolwich Equitable Building Society
7/5/94 3.65 25,000 24,838
TOTAL COMMERCIAL PAPER 2,755,842
FEDERAL AGENCIES - 11.6%
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 0.3%
7/28/94 3.53 18,970 18,809
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 11.3%
9/1/94 4.02 75,000 73,988
9/26/94 4.38 24,000 23,576
10/3/94 4.44 12,790 12,550
10/4/94 4.44 10,000 9,812
10/5/94 4.44 10,000 9,810
10/18/94 3.39 5,000 4,922
10/26/94 4.45 180,000 176,129
10/26/94 4.46 220,000 215,257
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - CONTINUED
10/27/94 4.50% $ 150,000 $ 146,718
11/21/94 3.60 59,000 57,830
730,592
TOTAL FEDERAL AGENCIES 749,401
BANK NOTES - 1.8%
First National Bank of Boston
5/11/94 3.72 18,000 18,000
5/19/94 3.80 35,000 35,000
Old Kent Bank & Trust Company
5/2/94 3.50 25,000 25,000
PNC Bank, N.A.
6/10/94 3.46 40,000 39,990
TOTAL BANK NOTES 117,990
MEDIUM-TERM NOTES (A) - 8.8%
Abbey National PLC, UK
6/24/94 3.98 23,000 23,000
Abbey National Treasury Service
9/30/94 3.86 190,000 190,000
Bank of New York
5/2/94 4.49 35,000 34,984
Comerica Bank-Detroit
5/2/94 4.49 40,000 39,993
Ford Motor Credit Corporation
6/23/94 3.92 12,000 12,011
6/23/94 3.93 20,000 20,019
General Motors Acceptance Corporation
5/7/94 3.47 43,000 43,000
6/8/94 4.07 8,000 8,041
Goldman Sachs Group, L.P. (The) (c)
6/16/94 3.45 42,500 42,500
9/1/94 3.45 40,000 40,000
Huntington National Bank
5/2/94 4.40 37,800 37,732
5/2/94 4.51 7,000 6,982
MEDIUM-TERM NOTES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Norwest Corporation
9/15/94 3.89% $ 48,000 $ 48,000
Society National Bank
5/2/94 4.49 20,000 19,990
TOTAL MEDIUM-TERM NOTES 566,252
SHORT-TERM NOTES (A) - 9.6%
J.P. Morgan Securities
5/2/94 3.94 154,000 154,000
Kingdom of Sweden - A
6/23/94 4.25 33,000 33,000
Kingdom of Sweden - B
6/23/94 3.81 33,000 33,000
Kingdom of Sweden - C
6/23/94 3.94 33,000 33,000
Morgan Stanley Group, Inc.
5/2/94 3.89 40,000 40,000
Norwest Corporation
5/2/94 3.88 35,000 35,000
SMM Trust Company (1993-D) (b)
7/28/94 4.30 19,000 19,000
SMM Trust Company (1994-A) (b)
6/18/94 3.91 180,000 180,000
SMM Trust Company (1994-E) (b)
7/13/94 4.04 46,000 46,000
Swedish National Housing Finance Corp.
5/23/94 3.63 42,000 42,000
TOTAL SHORT-TERM NOTES 615,000
TIME DEPOSITS - 1.2%
Hong Kong & Shanghai Banking Corp.
5/2/94 3.81 74,054 74,054
MUNICIPAL BONDS - 0.8%
New York Public Housing Authority
5/11/94 3.78 55,000 55,000
REPURCHASE AGREEMENTS - 3.4%
MATURITY AMOUNT VALUE (NOTE 1)
(000S) (000S)
WITH GOLDMAN, SACHS & CO.
At 3.80%, dated 4/28/94 due 5/12/94
U.S. Government Obligations
(principal amount $233,433,655)
3.518% to 9.50%, 2/1/98 to 6/1/29 $ 100,148 $ 100,000
At 3.80%, dated 4/28/94 due 5/16/94
U.S. Government Obligations
(principal amount $268,448,704)
3.518% to 9.50%, 2/1/98 to 6/1/29 115,219 115,000
In a joint trading account
(U.S. Treasury Obligations)
dated 4/29/94, due 5/2/94
(Note 2)
At 3.56% 965 965
TOTAL REPURCHASE AGREEMENTS 215,965
TOTAL INVESTMENTS - 100% $ 6,436,156
Total Cost for Income Tax Purposes $ 6,436,156
LEGEND
1. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
2. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
SMM Trust Company:
(1993-D) 4/26/94 $ 19,000,000
(1994-A) 3/17/94 $ 180,000,000
(1994-E) 4/13/94 $ 46,000,000
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $82,500,000 or 1.3% of net
assets.
TAX INFORMATION
At April 30, 1994, the fund had a capital loss carryforward of
approximately $2,193,000 of which $301,000 and $1,892,000 will expire on
April 30, 2001 and 2002, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) APRIL 30, 1994
4.ASSETS 5. 6.
7.Investment in securities, at value (including repurchas 8. $ 6,436,156
e
agreements of $215,965) (Notes 1 and 2) -
See accompanying schedule
9.Cash 10. 8,055
11.Interest receivable 12. 11,316
13. 14.TOTAL ASSETS 15. 6,455,527
16.LIABILITIES 17. 18.
19.Dividends payable $ 289 20.
21.Accrued management fee 1,840 22.
23. 24.TOTAL LIABILITIES 25. 2,129
26.27.NET ASSETS 28. $ 6,453,398
29.Net Assets consist of (Note 1): 30. 31.
32.Paid in capital 33. $ 6,455,591
34.Accumulated net realized gain (loss) on investments 35. (2,193)
36.37.NET ASSETS, for 6,455,080 shares outstanding 38. $ 6,453,398
39.40.NET ASSET VALUE, offering price and redemption p 41. $1.00
rice
per share ($6,453,398(divided by)6,455,080 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1994
42.43.INTEREST INCOME 44. $ 154,536
45.EXPENSES 46. 47.
48.Management fee (Note 3) $ 14,254 49.
50.Non-interested trustees' compensation 29 51.
52. Total expenses before reductions 14,283 53.
54. Expense reductions (Note 4) (398) 13,885
55.56.NET INTEREST INCOME 57. 140,651
58.59.NET REALIZED GAIN (LOSS) ON INVESTMENTS (NOT 60. (1,893)
E 1)
61.62.NET INCREASE IN NET ASSETS RESULTING FROM OPER 63. $ 138,758
ATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED APRIL 30,
1994 1993
64.INCREASE (DECREASE) IN NET ASSETS
65.Operations $ 140,651 $ 167,694
Net interest income
66. Net realized gain (loss) on investments (1,893) 1,579
67. 68.NET INCREASE (DECREASE) IN NET ASSETS RESULTI 138,758 169,273
NG
FROM OPERATIONS
69.Dividends to shareholders from net interest income (140,651) (167,694)
70.Share transactions at net asset value of $1.00 per sh 7,813,321 4,757,446
are
Proceeds from sales of shares
71. Reinvestment of dividends from net interest income 135,945 162,573
72. Cost of shares redeemed (6,035,840) (5,750,405)
73. Net increase (decrease) in net assets and shares 1,913,426 (830,386)
resulting from share transactions
74. 75.TOTAL INCREASE (DECREASE) IN NET ASSETS 1,911,533 (828,807)
76.NET ASSETS 77. 78.
79. Beginning of period 4,541,865 5,370,672
80. End of period $ 6,453,398 $ 4,541,865
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
81. YEARS ENDED APRIL 30,
82. 1994 1993 1992 1991 1990
83.SELECTED PER-SHARE DATA
84.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
85.Income from Investment .031 .035 .053 .076 .089
Operations
Net interest income
86.Less Distributions (.031) (.035) (.053) (.076) (.089)
From net interest income
87.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
88.TOTAL RETURN (dagger) 3.14% 3.51% 5.41% 7.87% 9.32%
89.RATIOS AND SUPPLEMENTAL DATA
90.Net assets, end of perio $ 6,453 $ 4,542 $ 5,371 $ 7,190 $ 8,342
d
(in millions)
91.Ratio of expenses to av .31% .30% .34% .28% .09%
erage
net assets (dagger)(dagger)
92.Ratio of expenses to av .32% .30% .34% .47% .53%
erage
net assets before expens
e
reductions (dagger)(dagger)
93.Ratio of net interest inco 3.12% 3.46% 5.32% 7.62% 8.77%
me
to average net assets
</TABLE>
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE. THE TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Money Market Fund (the fund) is a fund of Fidelity Summer Street
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective May 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,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of April 30, 1993 have been reclassified to reflect
an increase in paid in capital and a decrease in accumulated net realized
gain on investments of $511,000.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other registered
investment companies having management contracts with FMR, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by
U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities 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 $245,000,000 or 3.8% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.30% of the fund's average net assets, plus 6% of that portion of gross
income that represents a gross yield in excess of 5%. The maximum fee rate
cannot exceed .60% of the fund's average net assets for the month. In
addition, through December 31, 1995, FMR has agreed to limit the fund's
total operating expenses to an annual rate of .45% of average net assets.
On March 23, 1994, the shareholders of the fund voted to approve a proposal
to amend the management contract replacing the variable management fee
described above with a fixed flat fee of .45% of average net assets. The
new contract went into effect April 1, 1994 and will continue through May
31, 1994, subject to continuation by the fund's Board of Trustees. For the
period, the management fee was equivalent to an annual rate of .32% of
average net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $321,675.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
4. EXPENSE REDUCTIONS.
Effective April 1, 1994, FMR voluntarily agreed to reimburse the fund's
management fee above an annual rate of .37% of average net assets until
further notice. For the period, the reimbursement reduced the expenses by
$398,000. Effective May 1, 1994, this expense limitation was increased to
.39% of average net assets.
5. SHAREHOLDER MEETING.
At a special meeting of the shareholders of the fund held on March 23,
1994, shareholders approved amendments to certain fundamental investment
limitations of the fund.
In addition, shareholders approved an Agreement and Plan of Conversion and
Termination (the Plan of Conversion), providing for the conversion of the
fund (the current fund) from a separate series of Fidelity Summer Street
Trust, a Massachusetts business trust, to a separate series (the successor
fund) of Fidelity Hereford Street Trust, a Delaware business trust,
effective June 17, 1994. The individual investment objective, policies and
limitations of the successor fund will be identical to those of the current
fund. In connection with the Plan of Conversion, a new management contract,
new sub-advisory agreement and new distribution plan identical to those
currently in effect for the current fund will take effect on June 17, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Summer Street Trust and the Shareholders of
Spartan
Money Market Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Summer Street Trust: Spartan Money Market Fund, including the
schedule of portfolio investments, as of April 30, 1994, and the related
statement of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Summer Street Trust: Spartan Money Market Fund, the results of
its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND
COOPERS & LYBRAND
Dallas, Texas
May 20, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
John Todd, Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H . Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
SPARTAN
(registered trademark)
(registered trademark)
U.S. GOVERNMENT
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 1994
INVESTMENTS APRIL 30, 1994
Showing Percentage of Total Value of Investments
FEDERAL AGENCIES - 38.6%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
FEDERAL FARM CREDIT BANK - AGENCY COUPONS - 2.4%
10/3/94 3.36% $ 10,000,000 $ 10,000,989
10/3/94 3.38 9,000,000 9,000,000
19,000,989
FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 0.8%
6/16/94 3.37 6,000,000 5,999,393
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 3.7%
10/21/94 4.48 19,475,000 19,065,084
11/28/94 4.18 10,000,000 9,762,625
28,827,709
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 4.8%
5/2/94 3.85 (a) 30,000,000 30,000,000
6/30/94 3.40 7,000,000 7,000,285
37,000,285
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 20.3%
6/27/94 3.34 15,000,000 14,922,100
6/30/94 3.31 10,000,000 9,946,333
8/1/94 3.20 10,000,000 9,919,500
9/6/94 3.29 15,000,000 14,827,733
9/22/94 3.33 28,000,000 27,634,880
9/23/94 4.01 7,000,000 6,889,478
9/30/94 4.04 11,000,000 10,816,544
10/4/94 4.27 21,000,000 20,619,620
10/6/94 4.19 15,000,000 14,729,426
10/19/94 4.05 10,000,000 9,812,375
10/25/94 3.40 18,000,000 17,707,065
157,825,054
STUDENT LOAN MARKETING ASSOCIATION - AGENCY COUPONS (A) - 6.6%
5/3/94 4.26 26,000,000 26,000,000
7/1/94 3.74 12,400,000 12,400,000
10/11/94 4.15 13,250,000 13,249,308
51,649,308
TOTAL FEDERAL AGENCIES 300,302,738
U.S. TREASURY OBLIGATIONS - 1.4%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILLS
10/20/94 3.36% $ 11,000,000 $ 10,827,618
REPURCHASE AGREEMENTS - 60.0%
MATURITY AMOUNT VALUE (NOTE 1)
(000S) (000S)
WITH BEAR STEARNS & CO., INC.
At 3.55%, dated 4/29/94 due 5/2/94:
U.S. Treasury Obligations
(principal amount $195,560,000)
5.125% to 8.625%, 1/15/95 to 6/30/98 $ 190,056,208 190,000,000
WITH FIRST BOSTON CORPORATION
At 3.85%, dated 4/26/94 due 5/24/94:
U.S. Government Obligations
(principal amount $32,022,069)
4.911% to 12.50%, 5/1/7 to 8/1/22 18,053,900 18,000,000
WITH GOLDMAN, SACHS & CO.
At 3.82%, dated 3/22/94 due 6/20/94:
U.S. Treasury Obligations
(principal amount $36,374,000)
4.625% to 6.875%, 8/15/94 to 8/15/95 36,343,800 36,000,000
SWISS BANK CORPORATION GOVERNMENT SECURITIES, INC.
At 3.55%, dated 4/29/94 due 5/2/94:
U.S. Treasury Obligations
(principal amount $198,400,000)
9/29/94 to 3/9/95 190,056,208 190,000,000
WITH UNION BANK OF SWITZERLAND
At 3.55%, dated 4/29/94 due 5/2/94:
U.S. Treasury Obligations
(principal amount $30,780,000)
8.75%, 10/15/97 32,484,607 32,475,000
TOTAL REPURCHASE AGREEMENTS 466,475,000
TOTAL INVESTMENTS - 100% $ 777,605,356
Total Cost For Income Tax Purposes $ 777,605,356
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
INCOME TAX INFORMATION
At April 30, 1994, the fund had a capital loss carryforward of
approximately $81,000 of which $20,000, $10,000 and $51,000 will expire on
April 30, 1999, 2001 and 2002, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994
5.ASSETS 6. 7.
8.Investment in securities, at value (including 9. $ 777,605,356
repurchase agreements of $466,475,000) (Notes 1
and 2) -
See accompanying schedule
10.Cash 11. 1,942,919
12.Interest receivable 13. 1,040,649
14. 15.TOTAL ASSETS 16. 780,588,924
17.LIABILITIES 18. 19.
20.Dividends payable $ 10,081 21.
22.Accrued management fee 283,583 23.
24. 25.TOTAL LIABILITIES 26. 293,664
27.28.NET ASSETS 29. $ 780,295,260
30.Net Assets consist of: 31. 32.
33.Paid in capital 34. $ 780,376,646
35.Accumulated net realized gain (loss) on investments 36. (81,386)
37.38.NET ASSETS, for 780,376,646 shares outstanding 39. $ 780,295,260
40.41.NET ASSET VALUE, offering price and redemption 42. $1.00
price per share ($780,295,260 (divided by) 780,376,646 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1994
43.44.INTEREST INCOME 45. $ 26,349,906
46.EXPENSES 47. 48.
49.Management fee (Note 3) $ 4,328,130 50.
51.Non-interested trustees' compensation 5,194 52.
53. Total expenses before reductions 4,333,324 54.
55. Expense reductions (Note 4) (736,316) 3,597,008
56.57.NET INTEREST INCOME 58. 22,752,898
59.60.NET REALIZED GAIN (LOSS) ON INVESTMENTS 61. (51,505)
(NOTE 1)
62.63.NET INCREASE IN NET ASSETS RESULTING FROM 64. $ 22,701,393
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED APRIL 30,
1994 1993
65.INCREASE (DECREASE) IN NET ASSETS
66.Operations $ 22,752,898 $ 39,123,850
Net interest income
67. Net realized gain (loss) on investments (51,505) (9,606)
68. 69.NET INCREASE (DECREASE) IN NET ASSETS 22,701,393 39,114,244
RESULTING
FROM OPERATIONS
70.Dividends to shareholders from net interest income (22,752,898) (39,123,850)
71.Share transactions at net asset value of $1.00 per 665,902,289 903,689,093
share
Proceeds from sales of shares
72. Reinvestment of dividends from net interest income 21,953,462 37,662,906
73. Cost of shares redeemed (805,300,969) (1,454,898,207)
74. Net increase (decrease) in net assets and shares (117,445,218) (513,546,208)
resulting
from share transactions
75. 76.TOTAL INCREASE (DECREASE) IN NET ASSETS (117,496,723) (513,555,814)
77.NET ASSETS 78. 79.
80. Beginning of period 897,791,983 1,411,347,797
81. End of period $ 780,295,260 $ 897,791,983
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
82. YEARS ENDED APRIL 30, FEBRUARY 5, 1990
(COMMENCEMEN
T
OF OPERATIONS) TO
APRIL 30,
83. 1994 1993 1992 1991 1990
84.SELECTED PER-SHARE DATA
85.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of
period
86.Income from Invest .029 .032 .052 .076 .019
ment
Operations
Net interest income
87.Less Distributions (.029) (.032) (.052) (.076) (.019)
From net interest
income
88.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
89.TOTAL RETURN (dagger) 2.89% 3.24% 5.33% 7.84% 1.94%
90.RATIOS AND SUPPLEMENTAL DATA
91.Net assets, $ 780,295 $ 897,792 $ 1,411,348 $ 1,878,250 $ 49,339
end of period
(000 omitted)
92.Ratio of expenses .45% .45% .40% .17% -
to average net
assets (dagger)(dagger)
93.Ratio of expenses .54% .55% .55% .55% .55%*
to
average net assets
before expense
reductions (dagger)(dagger)
94.Ratio of net interes 2.85% 3.25% 5.29% 7.34% 8.49%*
t
income to average
net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE 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.
(dagger)(dagger) SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan U.S. Government Money Market Fund (the fund) is a fund of Fidelity
Summer Street Trust (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between
the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
REVERSE REPURCHASE AGREEMENTS. The fund is permitted to engage in reverse
repurchase agreements for temporary purposes when it is able to invest the
cash so acquired at a rate higher than the cost related to the agreement.
The fund engaged in reverse repurchase agreements during the period earning
net interest income of $47,666 which is included in Interest Income on the
Statement of Operations.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses
except the compensation of the non-interested Trustees and certain
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.55% of the fund's average net assets.
On March 23, 1994, the shareholders of the fund voted to approve a proposal
that would amend the management contract by reducing the fee rate to .45%
of the fund's average net assets. The new contract went into effect April
1, 1994 and will continue through May 31, 1994, subject to the continuation
by the fund's Board of Trustees.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $49,506.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the fee
for any payments by FMR pursuant to the fund's Distribution and Service
Plan.
4. EXPENSE REDUCTIONS.
For the period May 1, 1993 to March 31, 1994, FMR voluntarily agreed to
reimburse the fund's operating expenses (excluding interest, taxes,
brokerage commissions and extraordinary expenses) above an annual rate of
.45% of average net assets. For the period, the reimbursement reduced the
expenses by $736,316.
5. SHAREHOLDER MEETING.
At a special meeting of the shareholders of the fund held on March 23,
1994, shareholders approved amendments to certain fundamental investment
limitations of the fund.
In addition, shareholders approved an Agreement and Plan of Conversion and
Termination (the Plan of Conversion), providing for the conversion of the
fund (the current fund) from a separate series of Fidelity Summer Street
Trust, a Massachusetts business trust, to a separate series (the successor
fund) of Fidelity Hereford Street Trust, a Delaware business trust,
effective June 17, 1994. The individual investment objective, policies and
limitations of the successor fund will be identical to those of the current
fund. In connection with the Plan of Conversion, a new management contract,
new sub-advisory agreement and new distribution plan identical to those
currently in effect for the current fund will take effect on June 17, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Summer
Street Trust and the Shareholders of
Spartan U.S. Government Money
Market Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Summer Street Trust: Spartan U.S. Government Money Market Fund,
including the schedule of portfolio investments, as of April 30, 1994, and
the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the four years in the period then
ended and for the period February 5, 1990 (commencement of operations) to
April 30, 1990. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan U.S. Government Money Market Fund, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of
the four years in the period then ended and for the period February 5, 1990
(commencement of operations) to April 30, 1990, in conformity with
generally accepted accounting principles.
/s/ COOPERS & LYBRAND
COOPERS & LYBRAND
Dallas, Texas
May 20, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Leland Barron, Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Morgan Guaranty Trust Co. of New York
New York, NY
FIDELITY'S TAXABLE
MONEY MARKET FUNDS
Fidelity Cash Reserves
Fidelity Daily Income Trust
Fidelity U.S. Government Reserves
Spartan Money Market Fund
Spartan U.S. Government
Money Market Fund
Spartan U.S. Treasury
Money Market Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
Exhibit 5(a)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY HEREFORD STREET TRUST:
Spartan Money Market Fund
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ___ day of ______, 1994, by and between Fidelity
Hereford Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan Money Market Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser undertakes to pay all expenses involved in the operation
of the Portfolio, except the following, which shall be paid by the
Portfolio: (i) taxes; (ii) the fees and expenses of all Trustees of the
Fund who are not "interested persons" of the Fund or of the Adviser; (iii)
brokerage fees and commissions; (iv) interest expenses with respect to
borrowings by the Portfolio; and (v) such non-recurring and extraordinary
expenses as may arise, including actions, suits or proceedings to which the
Portfolio is or is threatened to be a party and the legal obligation that
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser, but
may be received by the Adviser or its affiliates.
(d) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to execute
portfolio transactions at prices which are advantageous to the Portfolio
and at commission rates which are reasonable in relation to the benefits
received. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Adviser or its affiliates exercise investment discretion.
The Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may
be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at an annual rate of .45% of
the average daily net assets of the Portfolio (computed in the manner set
forth in the Trust Instrument) throughout the month.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until May 31, 1995
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Declaration of Trust are separate and distinct from those of any and all
other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[Signature lines omitted]
Exhibit 5(b)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY HEREFORD STREET TRUST:
Spartan U.S. Government Money Market Fund
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ____ day of ______, 1994, by and between Fidelity
Hereford Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan U.S. Government Money Market Fund
(hereinafter called the "Portfolio"), and Fidelity Management &
Research Company, a Massachusetts corporation (hereinafter called the
"Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser undertakes to pay all expenses involved in the operation
of the Portfolio, except the following, which shall be paid by the
Portfolio: (i) taxes; (ii) the fees and expenses of all Trustees of the
Fund who are not "interested persons" of the Fund or of the Adviser; (iii)
brokerage fees and commissions; (iv) interest expenses with respect to
borrowings by the Portfolio; and (v) such non-recurring and extraordinary
expenses as may arise, including actions, suits or proceedings to which the
Portfolio is or is threatened to be a party and the legal obligation that
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser, but
may be received and retained by the Adviser or its affiliates.
(d) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of .45% of
the average daily net assets of the Portfolio (computed in the manner set
forth in the Trust Instrument) determined as of the close of business on
each day throughout the month; provided that the fee, so computed, shall be
reduced by the compensation, including reimbursement of expenses, paid by
the Portfolio to those Trustees who are not "interested persons" of the
Fund or the Adviser.
In the case of initiation or termination of this Contract during any
month, the fee shall be reduced proportionately on the basis of the number
of business days during which it is in effect and the fee computed upon the
average net assets for the business days it is so in effect for that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until May 31, 1995
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
7. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[Signature lines omitted]
Exhibit 5(c)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
Agreement made this day of ______, 1994, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Fidelity
Hereford Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan Money Market Fund (hereinafter called the
"Portfolio"), pursuant to which the Adviser is to act as investment manager
and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of the Portfolio in accordance with the investment
objective, policies and limitations as provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Fund policies, and shall carry
out such policies as are adopted by the Trustees. The Sub-Adviser shall,
subject to review by the Board of Trustees, furnish such other services as
the Sub-Adviser shall from time to time determine to be necessary or useful
to perform its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Adviser shall
use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or
dealers qualified to execute a particular transaction, brokers or dealers
may be selected who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of l934)
to the Portfolio and/or the other accounts over which the Sub-Adviser,
Adviser or their affiliates exercise investment discretion. The
Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which, the Sub-Adviser and its affiliates have with
respect to accounts over which they exercise investment discretion. The
Trustees of the Fund shall periodically review the commissions paid by the
Portfolio to determine if the commissions paid over representative periods
of time were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the Adviser on the following
basis for the services to be furnished hereunder: the Adviser agrees to
pay the Sub-Adviser a monthly fee equal to 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connections with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registrations and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the
Portfolio and other registered investment companies having Advisory and
Service or Management Contracts with the Adviser, of 50% of insurance
premiums for fidelity and other coverage; (x) its proportionate share of
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders, and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio is a party and the legal
obligation which the Portfolio may have to indemnify the Fund's Trustees
and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, the
Sub-Adviser shall not be subject to liability to the Adviser, the Fund or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
6 (a) Subject to prior termination as provided in sub-paragraph (d) of this
paragraph 6, this Agreement shall continue in force until May 30, 1995 and
indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust of the Fund
and agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Adviser shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
8. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, all as of the date written above.
[Signature lines omitted]
Exhibit 5(d)
FORM OF
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
Modification made this day of ________, 1994, by and between FMR
Texas Inc., a Texas corporation with principal offices at 400 East Las
Colinas Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation
with principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Fidelity
Hereford Street Trust, a Delaware business trust which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund"), on behalf of Spartan U.S. Government Money Market Fund
(hereinafter called the "Portfolio"), pursuant to which the Adviser is to
act as investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of the Portfolio in accordance with the investment
objective, policies and limitations as provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of l940 and rules thereunder, as amended from
time to time (the "l940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser
may deem to be desirable. The Sub-Adviser shall make recommendations to
the Fund's Board of Trustees with respect to Fund policies, and shall carry
out such policies as are adopted by the Trustees. The Sub-Adviser shall,
subject to review by the Board of Trustees, furnish such other services as
the Sub-Adviser shall from time to time determine to be necessary or useful
to perform its obligations under this Agreement and which are not otherwise
furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Adviser shall
use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or
dealers qualified to execute a particular transaction, brokers or dealers
may be selected who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of l934)
to the Portfolio and/or the other accounts over which the Sub-Adviser,
Adviser or their affiliates exercise investment discretion. The
Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the Adviser on the following
basis for the services to be furnished hereunder: the Adviser agrees to
pay the Sub-Adviser a monthly fee equal to 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the Fund
are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
stockholders of the Adviser or the Sub-Adviser are or may be or become
similarly interested in the Fund, and that the Adviser or the Sub-Adviser
may be or become interested in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connections with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, the Sub-Adviser or the
Adviser; (iv) legal and audit expenses; (v) custodian, registrar and
transfer agent fees and expenses; (vi) fees and expenses related to the
registrations and qualification of the Fund and the Portfolio's shares for
distribution under state and federal securities laws; (vii) expenses of
printing and mailing reports and notices and proxy material to shareholders
of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the
Portfolio and other registered investment companies having Advisory and
SErvice or Management Contracts with the Adviser, of 50% of insurance
premiums for fidelity and other coverage; (x) its proportionate share of
association membership dues; (xi) expenses of typesetting for printing
Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders, and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions,
suits or proceedings to which the Portfolio is a party and the legal
obligation which the Portfolio may have to indemnify the Fund's Trustees
and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, the
Sub-Adviser shall not be subject to liability to the Adviser, the Fund or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until May 30, 1995
and indefinitely thereafter, but only so long as the continuance after such
period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser and the Portfolio, such consent on the part of the Portfolio to
be authorized by vote of a majority of the outstanding voting securities of
the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of the Agreement
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to such Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60) days' prior written notice to the other parties, terminate
this Agreement, without payment of any penalty, by action of its Board of
Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically in the event of
its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Declaration of Trust of the Fund
and agrees that any obligations of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Adviser shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
8. This agreement shall be governed by, and construed in accordance with,
laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, all as of the date written above.
[Signature lines omitted]
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the Prospectus and
Statement of Additional Information in Post-Effective Amendment No. 2 to
the Registration Statement on Form N-1A of Fidelity Hereford Street Trust
of our reports dated May 20, 1994, on the financial statements and
financial highlights in the April 30, 1994 Annual Reports to Shareholders
of Fidelity Summer Street Trust: Spartan Money Market Fund and Spartan U.S.
Government Money Market Fund.
We further consent to the references to our Firm under the headings
"Auditor" in the Statement of Additional Information and "Financial
Highlights" in the Prospectus.
Dallas, Texas /s/COOPERS & LYBRAND
June 10, 1994 COOPERS & LYBRAND
Exhibit 16
SCHEDULE FOR COMPUTATION OF PERFFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the Fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
The 7-DAY YIELD AND EFFECTIVE YIELD are calculated according to the methods
prescribed in Form N-1A Item 22(a)(i) and (ii).
The 7-DAY YIELD is calcualted according to the following formula:
7-Day Yield = (Base Period Return) x (365/7)
The EFFECTIVE YIELD is calculated according to the following formula:
Effective Yield = [(Base Period Return + 1)365/7] - 1
The TAX EQUIVALENT YIELD is calcuated by formula as follows:
Tax Equivalent Yield =(yield)/(1-[tax rate])
[where the tax rate is expressed in decimal notation (i.e. 28% = 0.28)]
For any municipal portfolio that invests a portion of its assets in
obligations subject to state taxes, the tax equivalent yield is adjusted to
reflect these investments.
