SPARTAN
(registered trademark)
(registered trademark)
U.S. GOVERNMENT
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 12 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 16 Notes to the financial statements.
REPORT OF INDEPENDENT 19 The auditor's opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was almost ideal.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income) and the
effect of the fund's $5 account closeout fee on an average sized account.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses during the periods
shown, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan U.S. Government
Money Market Fund 5.52% 23.71% 36.00%
Government Money Market
Funds Average 5.11% 21.50% 31.74%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on February 5, 1990. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the government money market funds average,
which reflects the performance of 233 government money market funds with
similar objectives tracked by IBC Financial Data, Inc. over the past year.
(The periods covered by IBC Financial Data, Inc. numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan U.S. Government
Money Market Fund 5.52% 4.35% 5.05%
Government Money Market
Funds Average 5.11% 3.97% 4.57%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
4/25/95 8/1/95 10/31/95 1/30/96 4/30/96
Spartan U.S. Government 5.64% 5.54% 5.42% 5.23% 5.03%
Money Market Fund
Government Money Market 5.32% 5.13% 5.05% 4.82% 4.57%
Funds Average
4/26/95 8/1/95 11/1/95 1/31/96 5/1/96
2.88% 2.85% 2.85% 2.81% 2.67%
MMDA
Row: 1, Col: 1, Value: 5.64
Row: 1, Col: 2, Value: 5.319999999999999
Row: 1, Col: 3, Value: 2.88
Row: 2, Col: 1, Value: 5.54
Row: 2, Col: 2, Value: 5.13
Row: 2, Col: 3, Value: 2.85
Row: 3, Col: 1, Value: 5.42
Row: 3, Col: 2, Value: 5.05
Row: 3, Col: 3, Value: 2.85
Row: 4, Col: 1, Value: 5.23
Row: 4, Col: 2, Value: 4.819999999999999
Row: 4, Col: 3, Value: 2.81
Row: 5, Col: 1, Value: 5.03
Row: 5, Col: 2, Value: 4.37
Row: 5, Col: 3, Value: 2.87
Spartan U.S.
Government
Money Market
Government
Money
Market Funds
Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. If
Fidelity had not reimbursed certain fund expenses, the seven-day yield
would have been 4.99% for the period ended April 30, 1996. You can compare
these yields to the government money market funds average and the bank
money market deposit account average (MMDA). Figures for the government
money market funds average are from IBC Financial Data, Inc. The MMDA
average is supplied by BANK RATE MONITOR.(Trademark)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit
account (MMDA) and a money
market fund. First, the U.S.
Government neither insures
nor guarantees a money
market fund. In fact, there is no
assurance that a money
market fund will maintain a $1
share price. Second, a money
market fund returns to its
shareholders income earned
by the fund's investments after
expenses. This is in contrast to
banks, which set their MMDA
rates periodically based on
current interest rates,
competitors' rates, and
internal criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Leland Barron, Portfolio Manager of Spartan U.S.
Government Money Market Fund
Q. LELAND, HOW HAVE ECONOMIC DEVELOPMENTS INFLUENCED INTEREST RATES DURING
THE PAST YEAR?
A. As expectations about the strength of the economy have shifted, so has
the direction of short-term interest rates. A year ago last April, interest
rates were falling as most market participants prepared for the likelihood
of an eventual rate cut by the Federal Reserve. In July, following several
months of weak economic data, the Fed shaved one-quarter percentage point
off the rate banks charge each other for overnight loans, known as the
federal funds rate. That was the first rate cut after a string of seven
rate increases which had doubled the federal funds rate between February
1994 and February 1995. Then, during the third quarter of 1995, the economy
showed surprising strength, and the Fed retreated to the sidelines. But
last December, with inflation pressures in abeyance and Congress and the
White House seemingly on the verge of striking a balanced budget agreement,
the Fed again lowered the federal funds rate one-quarter percentage point,
to 5.50%.
Q. HOW HAS THE MOOD OF THE MARKET CHANGED IN RECENT MONTHS?
A. In January, the Fed lowered the federal funds rate for the third time,
to 5.25%. At the time, most market participants assumed the Fed would keep
lowering rates on into the spring. That optimism caused the interest rate
on the six-month Treasury bill to trade nearly half a percentage point
below the federal funds rate. Then came the release of the February
employment report, which was significantly stronger than expected, and the
mood changed dramatically. That report, combined with the surprising
strength of the housing market, higher consumer confidence and continued
consumer spending, led most market participants to abandon hopes of further
rate cuts and begin preparing instead for a rate increase. Given this
change in sentiment, the yield on the six-month Treasury bill was back to
the same level as the federal funds rate by the end of April.
Q. HOW DID YOU MANAGE THE FUND'S AVERAGE MATURITY AS CONDITIONS CHANGED?
A. The fund began the period with an average maturity of 42 days and has
stayed in a range between the high 30s and mid 40s throughout. Normally,
when interest rates are heading lower, as they were at the beginning of the
period, I would aim for a longer average maturity. In this case, however, I
felt that market expectations were running too far ahead of the Fed's
actions. Instead of buying longer-term securities whose yields took into
account the likelihood of further rate cuts, I stayed with higher-yielding
shorter-term securities. Later in the period, as expectations shifted and
rates began to rise, I kept the same average maturity but for a different
reason - to preserve flexibility and keep pace with rising rates. On April
30, 1996, the fund's average maturity was 36 days.
Q. HOW DID THE FUND PERFORM?
A. Better than most of its competitors. On April 30, 1996, the fund's
seven-day yield was 5.03%, compared to 5.69% a year ago. The fund's total
return for the year was 5.52%. That beat the average total return during
the same period of 5.11% for the government money market funds average,
according to IBC Financial Data, Inc.
Q. WHAT'S THE OUTLOOK FOR THE NEXT SEVERAL MONTHS?
A. In the most general terms, I would expect the economy to get stronger
rather than weaker over the next several months. However, I do not expect
growth to accelerate to the point where the Fed would be so concerned about
inflation that it would choose to raise the federal funds rate, at least
not right away. My goal going forward will be to preserve flexibility
without sacrificing yield, which would result in an average maturity of
between 40 and 45 days in the months ahead.
FUND FACTS
GOAL: high current income
while maintaining a stable $1
share price by investing in
U.S. government money
market securities
START DATE: February 5, 1990
SIZE: as of April 30, 1996,
more than $761 million
MANAGER: Leland Barron,
since 1991; manager,
Fidelity U.S. Government
Reserves, since 1991 and
Spartan U.S. Treasury Money
Market Fund, since 1991;
joined Fidelity in 1981
(checkmark)
WORDS TO KNOW
AGENCY ISSUE: Debt security
issued by a government
agency, such as the Federal
National Mortgage Association
(Fannie Mae). Although their
credit ratings are high, most
agency issues are not backed
by the full faith and credit of the
U.S. government.
AVERAGE MATURITY: The average
maturity of debt securities in a
fund, weighted by dollar
amount. When the average
maturity is short, the fund
manager believes interest
rates will rise. When the
average maturity is long, the
fund manager is expecting
rates to fall.
DISCOUNT RATE: The interest rate
the Federal Reserve charges
member banks for loans.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The amount of time
remaining before a debt
security is scheduled to be
redeemed.
REPURCHASE AGREEMENT:
Agreement between a seller
and a buyer in which the seller
promises to repurchase a block
of securities at a set price and
time. Also known as a "repo."
TREASURY OBLIGATION: Debt
security issued directly by the
U.S. government. Payment of
principal and interest are
guaranteed.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
4/30/96 10/31/95 4/30/95
0 - 30 34 74 45
31 - 90 15 8 9
91 - 180 16 7 29
181 - 397 35 11 17
WEIGHTED AVERAGE MATURITY
4/30/96 10/31/95 4/30/95
Spartan U.S. Government
Money Market Fund 36 days 43 days 42 days
Government Money
Market 51 days 50 days 41 days
Funds Average *
ASSET ALLOCATION
AS OF APRIL 30, 1996 AS OF OCTOBER 31, 1995
Row: 1, Col: 1, Value: 62.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 3, Value: 31.0
Row: 1, Col: 4, Value: 1.0
Row: 1, Col: 1, Value: 49.0
Row: 1, Col: 2, Value: 8.0
Row: 1, Col: 3, Value: 42.0
Row: 1, Col: 4, Value: 1.0
Federal agency
issues 62%
U.S. Treasury
obligations 6%
Repurchase
agreements 31%
Other 1%
Federal agency
issues 49%
U.S. Treasury
obligations 8%
Repurchase
agreements 42%
Other 1%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS APRIL 30, 1996
Showing Percentage of Total Value of Investments
FEDERAL AGENCIES - 61.8%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
FEDERAL FARM CREDIT BANK - AGENCY COUPONS - 3.7%
5/1/96 5.59%(a) $ 21,000,000 $ 20,984,692
10/21/96 5.40 8,500,000 8,595,736
29,580,428
FEDERAL HOME LOAN BANK - AGENCY COUPONS - 8.1%
5/1/96 5.40 (a) 18,000,000 17,996,799
5/1/96 5.78 (a) 9,000,000 8,995,335
5/15/96 5.08 5,000,000 5,001,657
5/24/96 5.34 (a) 33,000,000 32,987,235
64,981,026
FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 5.4%
5/7/96 5.06 31,793,000 31,766,506
5/30/96 5.13 2,000,000 1,991,832
6/7/96 5.12 2,000,000 1,989,619
7/12/96 5.27 7,100,000 7,026,160
42,774,117
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 29.0%
5/1/96 5.29 (a) 33,000,000 32,968,964
5/1/96 5.32 (a) 39,000,000 38,971,867
5/1/96 5.33 (a) 19,000,000 18,985,165
5/1/96 5.34 (a) 21,000,000 21,145,418
5/1/96 5.38 (a) 9,000,000 9,000,000
5/1/96 5.48 (a) 23,000,000 23,000,000
5/1/96 5.85 (a) 30,000,000 30,000,000
5/7/96 5.29 (a) 25,000,000 24,991,488
5/11/96 5.41 (a) 10,000,000 9,995,725
5/21/96 5.15 (a) 6,000,000 5,995,927
6/10/96 5.66 4,000,000 3,999,707
6/20/96 5.35 (a) 10,000,000 9,990,621
7/10/96 5.32 2,055,000 2,064,731
231,109,613
FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 12.3%
5/3/96 5.24 19,000,000 18,994,543
6/6/96 5.10 29,000,000 28,853,985
7/12/96 5.26 11,405,000 11,286,502
9/5/96 5.03 20,000,000 19,654,278
10/16/96 5.37 20,000,000 19,512,800
98,302,108
FEDERAL AGENCIES - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 3.3%
5/7/96 5.38% $ 26,000,000 $ 26,000,000
TOTAL FEDERAL AGENCIES 492,747,292
U.S. TREASURY OBLIGATIONS - 6.2%
U.S. TREASURY BILLS - 4.2%
4/3/97 5.54 19,000,000 18,065,340
4/3/97 5.55 16,000,000 15,212,169
33,277,509
U.S. TREASURY NOTES - 2.0%
8/15/96 5.00 16,000,000 15,968,639
TOTAL U.S. TREASURY OBLIGATIONS 49,246,148
MEDIUM-TERM NOTES (A) (B) - 0.5%
EXPORT-IMPORT BANK, U.S. (AS GUARANTOR FOR K.A. LEASING, LTD.)
5/15/96 5.50 3,927,207 3,927,207
REPURCHASE AGREEMENTS - 31.5%
MATURITY
AMOUNT
With J.P. Morgan Securities, Inc.:
At 5.30%, dated 3/15/96 due 6/19/96:
U.S. Government Obligations
(principal amount $25,930,819)
8.50% to 9.50%, 7/15/17 to 11/15/22 $ 25,353,333 25,000,000
At 5.32%, dated 4/19/96 due 7/18/96:
U.S. Government Obligations
(principal amount $12,391,526)
9.50%, 4/15/20 to 12/15/20 12,159,600 12,000,000
REPURCHASE AGREEMENTS - CONTINUED
MATURITY VALUE
AMOUNT (NOTE 1)
In a joint trading account (Notes 2 and 3):
(U.S. Treasury Obligations)
dated 4/30/96 due 5/1/96:
At 5.35% $ 8,614,279 $ 8,613,000
(U.S. Government Obligations)
dated 4/30/96 due 5/1/96:
At 5.39% 161,426,160 161,402,000
(U.S. Government Obligations)
dated 4/17/96 due 5/20/96:
At 5.30% 44,213,767 44,000,000
TOTAL REPURCHASE AGREEMENTS 251,015,000
TOTAL INVESTMENTS - 100% $ 796,935,647
Total Cost for Income Tax Purposes $ 796,935,647
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(b) 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
Export-Import Bank,
U.S. (as guarantor for
K.A. Leasing, Ltd.) 7/8/94 $3,927,207
INCOME TAX INFORMATION
At April 30, 1996, the fund had a capital loss carryforward of
approximately $171,000 of which $20,000, $10,000, $52,000, $53,000 and
$36,000 will expire on April 30, 1999, 2001, 2002, 2003 and 2004,
respectively.
A total of 26.2% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 796,935,647
agreements of $251,015,000) - See accompanying
schedule
Cash 3,243,328
Interest receivable 3,833,242
TOTAL ASSETS 804,012,217
LIABILITIES
Payable for investments purchased $ 8,613,183
Distributions payable 364,159
Accrued management fee 282,241
Reverse repurchase payable 33,277,385
TOTAL LIABILITIES 42,536,968
NET ASSETS $ 761,475,249
Net Assets consist of:
Paid in capital $ 761,646,607
Accumulated net realized gain (loss) on investments (171,358)
NET ASSETS, for 761,646,607 shares outstanding $ 761,475,249
NET ASSET VALUE, offering price and redemption price per $1.00
share ($761,475,249 (divided by) 761,646,607 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED APRIL 30, 1996
INTEREST INCOME $ 43,733,872
EXPENSES
Management fee $ 3,373,332
Non-interested trustees' compensation 3,049
Total expenses before reductions 3,376,381
Expense reductions (314,892) 3,061,489
NET INTEREST INCOME 40,672,383
NET REALIZED GAIN (LOSS) ON INVESTMENTS (36,511)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 40,635,872
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 40,672,383 $ 34,848,882
Net interest income
Net realized gain (loss) (36,511) (53,461)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 40,635,872 34,795,421
FROM OPERATIONS
Distributions to shareholders from net interest income (40,672,383) (34,848,882)
Share transactions at net asset value of $1.00 per share 809,405,827 710,652,493
Proceeds from sales of shares
Reinvestment of distributions from net interest income 38,628,312 33,477,624
Cost of shares redeemed (793,716,471) (817,177,824)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 54,317,668 (73,047,707)
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 54,281,157 (73,101,168)
NET ASSETS
Beginning of period 707,194,092 780,295,260
End of period $ 761,475,249 $ 707,194,092
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .054 .047 .029 .032 .052
Operations
Net interest income
Less Distributions (.054) (.047) (.029) (.032) (.052)
From net interest income
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN A 5.52% 4.79% 2.89% 3.24% 5.33%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 761,475 $ 707,194 $ 780,295 $ 897,792 $ 1,411,348
(000 omitted)
Ratio of expenses to average .45% .45% .45% .45% .40%
net assets B B B
Ratio of expenses to average .41% .45% .45% .45% .40%
net assets after expense C
reductions
Ratio of net interest income 5.42% 4.67% 2.85% 3.25% 5.29%
to average net assets
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan U.S. Government Money Market Fund (the fund) is a fund of Fidelity
Hereford 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 Delaware business trust. The financial statements
have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the 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 substantially 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 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.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $3,927,207 or
0.5% of net assets.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
REVERSE REPURCHASE AGREEMENTS. At all times that a reverse repurchase
agreement is outstanding, the fund identifies cash and liquid securities as
segregated in its custodian records with a value
at least equal to its obligation under the agreement. On April 30, 1996,
the fund had a reverse repurchase agreement amounting to $33,277,385 at
5.15% outstanding. The agreement, which matured May 1, 1996, was
collateralized by $35,000,000 of U.S. Treasury Bills due April 3, 1997.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were $44,213,767 at 5.30%, $8,614,279 at 5.35% and $161,426,160
at 5.39%. The investments in repurchase agreements through the joint
trading account are summarized as follows:
SUMMARY OF JOINT TRADING
DATED APRIL 17, 1996, DUE MAY 20, 1996 AT 5.30%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $250,000,000
Aggregate maturity amount of agreements $251,214,583
Aggregate market value of collateral $258,022,065
Coupon rates of collateral 5.50% to 11.00%
Maturity dates of collateral 4/1/12 to 3/1/26
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
DATED APRIL 30, 1996, DUE MAY 1, 1996 AT 5.39%
Number of dealers or banks 4
Maximum amount with one dealer or bank 44.2%
Aggregate principal amount of agreements $1,925,000,000
Aggregate maturity amount of agreements $1,925,288,153
Aggregate market value of collateral $1,987,832,018
Coupon rates of collateral 5.10% to 13.0%
Maturity dates of collateral 5/1/96 to 11/1/32
DATED APRIL 30, 1996, DUE MAY 1, 1996 AT 5.35%
Number of dealers or banks 6
Maximum amount with one dealer or bank 24.2%
Aggregate principal amount of agreements $446,703,000
Aggregate maturity amount of agreements $446,769,344
Aggregate market value of collateral $455,907,033
Coupon rates of collateral 0.0% to 15.75%
Maturity dates of collateral 5/2/96 to 2/15/25
4. 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
.45% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$22,281 for the period.
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.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $314,892 under these
arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Hereford 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 Hereford Street Trust: Spartan U.S. Government Money Market Fund,
including the schedule of portfolio investments, as of April 30, 1996, 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, 1996 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 Hereford Street Trust: Spartan U.S. Government Money Market
Fund as of April 30, 1996, 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.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 23, 1996
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
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
Fred L. Henning, Jr., Vice President
Leland C. Barron, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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
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)
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 25 Notes to the financial statements.
REPORT OF INDEPENDENT 27 The auditor's opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was almost ideal.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income) and the
effect of the fund's $5 account closeout fee on an average sized account.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses during the periods
shown, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Money Market Fund 5.57% 24.71% 50.82%
All Taxable Money Market Funds Averag 5.30% 22.20% 45.44%
e
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 23, 1989. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the all taxable money market funds average,
which reflects the performance of 791 taxable money market funds with
similar objectives tracked by IBC Financial Data, Inc. over the past year.
(The periods covered by IBC Financial Data, Inc. numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Money Market Fund 5.57% 4.52% 5.81%
All Taxable Money Market Funds Averag 5.30% 4.09% 5.30%
e
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
4/25/95 8/1/95 10/31/95 1/30/96 4/30/96
5.80% 5.63% 5.44% 5.30% 5.02%
Spartan Money Market
Fund
All Taxable Money Market 5.51% 5.31% 5.22% 5.01% 4.75%
Funds Average
4/26/95 8/1/95 11/1/95 1/31/96 5/1/96
2.88% 2.85% 2.85% 2.81% 2.67%
MMDA
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 5.51
Row: 1, Col: 3, Value: 2.88
Row: 2, Col: 1, Value: 5.63
Row: 2, Col: 2, Value: 5.31
Row: 2, Col: 3, Value: 2.85
Row: 3, Col: 1, Value: 5.44
Row: 3, Col: 2, Value: 5.22
Row: 3, Col: 3, Value: 2.85
Row: 4, Col: 1, Value: 5.3
Row: 4, Col: 2, Value: 5.01
Row: 4, Col: 3, Value: 2.81
Row: 5, Col: 1, Value: 5.02
Row: 5, Col: 2, Value: 4.75
Row: 5, Col: 3, Value: 2.67
6% -
5% -
4% -
3% -
2% -
1% -
0%
Spartan
Money Market Fund
All Taxable Money
Market Funds Average
MMDA
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. If
Fidelity had not reimbursed certain fund expenses, the seven-day yield
would have been 4.99% for the period ended April 30, 1996. You can compare
these yields to the all taxable money market funds average and the bank
money market deposit account average(MMDA). Figures for the all taxable
money market funds average are from IBC Financial Data, Inc. The MMDA
average is supplied by BANK RATE MONITOR.(Trademark)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit
account (MMDA) and a
money market fund. First, the
U.S. Government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money market fund will
maintain a $1 share price.
Second, a money market
fund returns to its
shareholders income earned
by the fund's investments
after expenses. This is in
contrast to banks, which set
their MMDA rates periodically
based on current interest
rates, competitors' rates, and
internal criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Todd, Portfolio Manager of Spartan Money Market Fund
Q. JOHN, HOW HAS THE INVESTMENT CLIMATE CHANGED DURING THE PAST YEAR?
A. The mood has shifted 180 degrees. Last year at this time, following a
torrid fourth quarter of 1994, the economy was slowing down and interest
rates were falling. By the time the period ended, however, many more market
participants seemed to agree that the economy was doing better than
expected; inflationary pressures were building and interest rates were
rising. At both times during the period, the Federal Reserve was on the
sidelines, awaiting clearer signals. Last year, the Fed waited until July
1995 before shaving one-quarter percentage point off the interest rate
banks charge each other for overnight loans, known as the federal funds
rate. Two more quarter-point rate cuts followed, the first in December and
the second in January 1996. At that time, many market participants believed
more rate cuts would follow. Then came the infamous February employment
report, in which jobs grew at a significantly stronger rate than many
analysts had predicted. Since then, increased signs of economic strength
together with rising commodity prices have postponed talk of further rate
changes.
Q. WHAT WAS YOUR STRATEGY DURING
THE PERIOD?
A. I made frequent adjustments to the funds average maturity in line with
changing market conditions. The fund started the period with an average
maturity of 52 days, and was at 60 days when the Fed lowered interest rates
in July. For much of that time I was more aggressive than similar funds,
and that helped the fund's performance. During the third quarter, as market
participants prepared for more Fed rate cuts, I took advantage of unusually
attractive rates on shorter-term securities and reduced the fund's average
maturity to around 50 days. Then during the fourth quarter, as the
likelihood of further rate cuts increased, I lengthened the fund's average
maturity to around 70 days. Since then, as market pressures have driven
rates higher, I've pulled back again. At the end of the period, the fund's
average maturity was 55 days.
Q. HOW DID THE FUND PERFORM?
A. Better than its peers. The fund's seven-day yield on April 30, 1996 was
5.02%, compared to 5.82% a year ago. The fund's total return for the year
was 5.57%. During the same period, the all-taxable money market funds
average had a total return of 5.30%, according to IBC Financial Data, Inc.
Q. WHAT'S YOUR OUTLOOK?
A. The key variable, as always, is inflation. So far, the most obvious
factors contributing to the build-up of inflationary pressures have been
food and energy prices. Some analysts tend to discount them because they're
so volatile from month to month. On the other hand, it would be hard to
argue that grain and gasoline prices don't have a significant impact on the
cost of living over the long run. Moreover, unemployment remains quite low
by historical standards at about 5.5%. That means there's not a lot of
slack in the system. Any significant increase in economic activity could
boost pressure on wages, and that in turn could have an immediate impact on
inflation. Despite those concerns, I believe the Fed is unlikely to begin
raising rates again until it has substantial evidence that the economy is
growing at a rate faster than 2%. For now, there's enough uncertainty in
the market that it probably makes sense to keep the fund's average maturity
about where it is, in the neutral range, and take advantage of buying
opportunities as they arise.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: seeks high current
income with share price
stability by investing in
high-quality, short-term
money market securities of all
types
START DATE: January 23, 1989
SIZE: as of April 30, 1996,
more than $8 billion
MANAGER: John Todd, since
1989; manager, Select Money
Market Portfolio, since 1991;
Daily Money Fund: Money
Market Portfolio and Fidelity
Institutional Cash Portfolios:
Money Market Portfolio, since
1992; joined Fidelity in 1981
(checkmark)
WORDS TO KNOW
BANKERS' ACCEPTANCE (BA): A
short-term note whose
payment is guaranteed by a
bank.
CERTIFICATE OF DEPOSIT (CD): An
interest-bearing deposit with a
specific maturity. Large
denomination CDs, like the
fund buys, have negotiable
interest rates and can be sold
in the secondary market.
COMMERCIAL PAPER: A
short-term note from a bank or
corporation.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity,
weighted by dollar amount, is
short, the fund manager is
expecting rates to rise. When
the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
TIME DEPOSIT (TD): An
interest-bearing deposit with a
specific maturity. Large
denomination TDs, like the
fund buys, differ from CDs in
that they can't be sold in the
secondary market.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
4/30/96 10/31/95 4/30/95
0 - 30 25 51 50
31 - 90 34 22 28
91 - 180 23 23 19
181 - 397 18 4 3
WEIGHTED AVERAGE MATURITY
4/30/96 10/31/95 4/30/95
Spartan Money Market
Fund 55 days 62 days 52 days
All Taxable 52 days
Money Market Funds 56 days 46 days
Average *
ASSET ALLOCATION
AS OF APRIL 30, 1996 AS OCTOBER 31, 1995
Row: 1, Col: 1, Value: 53.0
Row: 1, Col: 2, Value: 33.0
Row: 1, Col: 3, Value: 11.0
Row: 1, Col: 4, Value: 3.0
Row: 1, Col: 1, Value: 47.0
Row: 1, Col: 2, Value: 46.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 3.0
Bank CDs,
BAs, TDs,
and notes 53%
Commercial
paper 33%
Government
securities 11%
Other 3%
Bank CDs,
BAs, TDs,
and notes 47%
Commercial
paper 46%
Government
securities 4%
Other 3%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS APRIL 30, 1996
Showing Percentage of Total Value of Investments
BANKERS' ACCEPTANCES - 0.5%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Chase Manhattan Bank, NA
5/6/96 5.36% $ 11,261 $ 11,253
5/20/96 5.37 8,575 8,550
8/1/96 5.43 11,648 11,489
8/5/96 5.43 2,572 2,535
9/4/96 5.46 4,562 4,477
10/2/96 5.48 2,686 2,624
10/10/96 5.49 2,865 2,796
TOTAL BANKER'S ACCEPTANCES 43,724
CERTIFICATES OF DEPOSIT - 34.1%
DOMESTIC CERTIFICATES OF DEPOSIT - 1.8%
American Express Centurion Bank
5/8/96 5.38 18,000 18,000
Bank of New York, NY
4/29/97 5.80 (a) 27,000 27,000
Chase Manhattan Bank (USA)
7/24/96 5.20 32,000 32,000
Harris Trust & Savings Bank, Chicago
5/13/96 5.35 50,000 50,000
U.S. National Bank of Oregon
5/10/96 5.36 25,000 25,000
152,000
CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 2.3%
ABN-AMRO Bank
5/14/96 5.35 75,000 75,000
6/20/96 5.06 40,000 40,001
7/22/96 5.02 75,000 75,000
190,001
PORTLAND BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.2%
Bank of Nova Scotia
8/6/96 5.00 20,000 20,000
SAN FRANCISCO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.2%
Banque Nationale de Paris
9/3/96 5.12 20,000 19,994
NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 19.2%
Australia & New Zealand Banking
7/29/96 5.20 30,000 30,000
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
Banque Nationale de Paris
5/1/96 5.37% $ 7,000 $ 7,000
6/5/96 5.19 25,000 25,000
6/10/96 5.40 75,000 75,000
7/8/96 5.06 25,000 25,000
8/29/96 5.11 28,000 28,000
Bayerische Landesbank Girozentrale
7/24/96 5.22 25,000 25,000
7/25/96 5.22 20,000 20,000
7/30/96 5.60 (a) 65,000 65,000
4/22/97 5.85 (a) 57,000 57,000
Bayerische Vereinsbank A.G.
5/13/96 5.35 75,000 75,000
5/28/96 5.30 20,000 20,000
6/4/96 5.15 15,000 15,000
Caisse Nationale de Credit Agricole
5/13/96 5.35 75,000 75,000
8/7/96 5.03 50,000 50,000
Canadian Imperial Bank of Commerce
6/4/96 5.19 19,000 19,000
Commerzbank, Germany
6/3/96 5.17 25,000 25,000
6/4/96 5.17 10,000 10,000
Credit Suisse
7/5/96 5.06 50,000 50,000
7/30/96 5.19 13,000 13,000
Deutsche Bank, A.G.
5/13/96 5.35 50,000 50,000
5/14/96 5.35 50,000 50,000
7/29/96 5.18 65,000 65,000
8/1/96 5.19 60,000 60,000
Dresdner Bank, A.G.
10/15/96 5.43 25,000 25,000
Landesbank Hessen - Thuringen
8/19/96 5.00 30,000 29,999
National Westminster Bank, PLC
5/31/96 5.36 15,000 15,000
6/24/96 5.35 150,000 150,000
Societe Generale
6/11/96 5.36 60,000 60,000
9/3/96 5.13 95,000 95,000
9/30/96 5.44 25,000 25,001
Swiss Bank Corp.
5/6/96 5.47 50,000 50,000
6/3/96 5.40 71,000 71,000
7/29/96 5.20 50,000 50,000
8/8/96 5.16 30,000 29,987
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
Westdeutsche Landesbank
7/24/96 5.23% $ 20,000 $ 20,000
8/26/96 5.08 43,000 43,000
Westpac Banking Corp.
10/23/96 5.44 25,000 25,000
1,622,987
LONDON BRANCH, EURODOLLAR, DOMESTIC BANKS - 1.4%
Bank of America National Trust & Savings Assoc.
6/20/96 5.05 75,000 75,000
7/16/96 5.02 41,000 41,000
116,000
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 9.0%
ABN-AMRO Bank
7/16/96 5.01 31,000 31,004
8/14/96 5.19 40,000 40,001
Bank of Scotland
5/28/96 5.30 25,000 25,000
6/26/96 5.25 35,000 35,001
Banque Nationale de Paris
8/8/96 5.00 25,000 25,002
8/30/96 5.14 10,000 10,001
Bayerische Hypotheken-und Weschel
6/7/96 5.20 95,000 94,995
8/9/96 5.00 30,000 30,003
10/17/96 5.44 25,000 25,001
Bayerische Landesbank Girozentrale
6/28/96 5.18 45,000 45,004
6/28/96 5.37 25,000 25,002
7/5/96 5.01 25,000 25,003
7/29/96 5.18 25,000 25,001
8/30/96 5.12 10,000 10,000
Bayerische Vereinsbank A.G.
8/14/96 5.00 24,000 24,000
Commerzbank, Germany
6/4/96 5.16 25,000 25,000
6/27/96 5.25 25,000 25,000
Commonwealth Bank of Australia
8/27/96 5.11 40,000 39,994
Deutsche Bank, A.G.
7/29/96 5.20 40,000 40,000
Landesbank Hessen - Thuringen
6/4/96 5.25 25,000 25,000
CERTIFICATES OF DEPOSIT - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - CONTINUED
National Westminster Bank, PLC
5/22/96 5.30% $ 15,000 $ 15,000
Toronto-Dominion Bank
6/5/96 5.15 20,000 20,000
6/28/96 5.10 50,000 50,000
Union Bank of Switzerland
7/8/96 5.01 20,000 20,001
Westdeutche Landesbank Girozentrale
5/1/96 5.30 30,000 30,000
760,013
TOTAL CERTIFICATES OF DEPOSIT 2,880,995
COMMERCIAL PAPER - 33.2%
ABN-AMRO Bank
8/26/96 5.10 45,000 44,273
ABN-AMRO North America Finance, Inc.
7/8/96 5.09 50,000 49,528
8/28/96 5.13 25,000 24,587
A.H. Robins Company, Incorporated
5/2/96 5.39 30,975 30,970
5/17/96 5.23 25,000 24,942
5/24/96 5.40 15,000 14,949
6/14/96 5.40 14,000 13,908
6/20/96 5.43 7,000 6,948
Abbey National, North America
6/17/96 5.17 17,000 16,887
American Express Credit Corp.
7/22/96 5.23 12,000 11,861
8/12/96 5.00 10,000 9,860
8/23/96 5.10 15,000 14,764
American Home Food Products, Inc.
5/3/96 5.41 15,000 14,995
6/4/96 5.35 20,000 19,899
6/6/96 5.42 5,000 4,973
American Home Products
5/9/96 5.19 9,000 8,990
5/30/96 5.39 14,000 13,940
6/6/96 5.42 5,000 4,973
6/13/96 5.40 17,000 16,891
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Asset Securitization Cooperative Corporation
5/3/96 5.43% $ 12,000 $ 11,996
5/6/96 5.43 10,000 9,992
5/8/96 5.43 32,000 31,966
7/24/96 5.38 28,000 27,654
Associates Corp. of North America
6/24/96 5.37 35,000 34,722
6/25/96 5.37 17,000 16,862
7/1/96 5.17 15,000 14,871
BHF Finance (Delaware), Inc.
5/14/96 5.40 10,000 9,981
Bear Stearns Cos., Inc.
6/4/96 5.21 25,000 24,879
6/7/96 5.35 16,000 15,912
6/26/96 5.37 8,000 7,934
6/27/96 5.37 18,000 17,849
Beneficial Corp.
5/1/96 5.41 30,000 30,000
Bradford & Bingley Building Society
6/6/96 5.19 13,000 12,933
6/10/96 5.40 16,000 15,905
CIESCO, L.P.
7/12/96 5.37 28,000 27,703
CIT Group Holdings, Inc.
5/6/96 5.34 12,000 11,991
5/7/96 5.39 18,000 17,984
5/23/96 5.40 20,000 19,935
6/11/96 5.40 17,000 16,896
Caisse des Depots et Consignations
5/9/96 5.36 50,000 49,941
8/15/96 5.00 50,000 49,282
Chrysler Financial Corporation
5/3/96 5.31 15,000 14,996
5/14/96 5.44 50,000 49,902
5/28/96 5.49 20,000 19,918
5/29/96 5.49 20,000 19,915
6/10/96 5.50 20,000 19,879
6/26/96 5.45 14,000 13,882
6/27/96 5.45 19,000 18,837
CoreStates Capital Corp.
5/8/96 5.43 (a) 20,000 20,000
Corporate Asset Funding Co., Inc.
5/13/96 5.44 13,734 13,709
Den Danske Corp., Inc.
5/13/96 5.35 75,000 74,867
Eiger Capital Corp.
5/8/96 5.38 25,000 24,974
6/3/96 5.37 50,000 49,756
6/6/96 5.39 12,000 11,936
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Electronic Data Systems Corp.
6/7/96 5.20% $ 30,000 $ 29,842
Enterprise Funding Corp.
5/10/96 5.48 5,000 4,993
5/17/96 5.19 7,974 7,956
5/20/96 5.39 5,037 5,023
5/30/96 5.36 8,000 7,966
7/18/96 5.39 10,000 9,885
7/22/96 5.37 6,000 5,928
Ford Motor Credit Corp.
6/3/96 5.27 46,000 45,782
GTE Corp.
5/3/96 5.43 10,000 9,997
5/31/96 5.40 7,000 6,969
General Electric Capital Corp.
5/20/96 5.35 50,000 49,860
6/24/96 5.23 15,000 14,885
8/13/96 5.39 50,000 49,234
General Electric Corp.
5/15/96 5.41 50,000 49,897
General Motors Acceptance Corp.
5/20/96 5.24 37,000 36,899
5/21/96 5.24 18,000 17,948
5/22/96 5.24 18,000 17,946
6/4/96 5.25 58,000 57,716
6/6/96 5.25 50,000 49,741
6/12/96 5.15 32,000 31,811
6/18/96 5.40 15,000 14,893
6/19/96 5.40 15,000 14,891
Goldman Sachs Group, L.P. (The)
8/20/96 5.40 29,000 28,526
8/21/96 5.40 57,000 56,061
Halifax Building Society
7/15/96 5.00 50,000 49,490
Household Finance Corp.
6/6/96 5.40 10,000 9,946
IBM Corp.
5/3/96 5.39 50,000 49,985
Merrill Lynch & Co., Inc.
6/10/96 5.20 25,000 24,857
Morgan Stanley Group, Inc.
5/13/96 5.43 15,000 14,973
5/13/96 5.44 25,000 24,955
6/3/96 5.38 10,000 9,951
6/5/96 5.20 33,000 32,835
6/6/96 5.20 25,000 24,872
6/26/96 5.38 17,000 16,860
7/22/96 5.12 8,000 7,909
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Nationwide Building Society
6/5/96 5.18% $ 10,000 $ 9,950
6/6/96 5.19 10,000 9,949
6/12/96 5.39 10,000 9,938
7/12/96 5.42 20,000 19,786
New Center Asset Trust
5/6/96 5.39 20,000 19,985
6/7/96 5.40 45,000 44,753
6/21/96 5.38 13,000 12,902
9/27/96 5.43 39,000 38,146
9/30/96 5.43 5,000 4,888
Norfolk Southern Corp.
7/9/96 5.38 15,000 14,848
PHH Corp.
5/21/96 5.38 (a) 23,000 22,997
5/24/96 5.40 10,000 9,966
5/31/96 5.37 8,000 7,964
Penney (J.C) Funding Corp.
5/3/96 5.38 45,000 44,987
Preferred Receivables Funding Corp.
5/8/96 5.43 10,200 10,189
5/23/96 5.38 12,000 11,961
6/12/96 5.40 9,000 8,944
Prudential Funding Corp.
5/1/96 5.45 16,000 16,000
Sears Roebuck Acceptance Corp.
5/15/96 5.37 5,000 4,990
5/16/96 5.37 25,000 24,945
5/17/96 5.41 10,000 9,976
5/30/96 5.39 10,000 9,957
5/31/96 5.40 11,000 10,951
6/3/96 5.40 9,000 8,956
6/7/96 5.36 11,000 10,940
6/25/96 5.43 10,000 9,918
6/26/96 5.43 10,000 9,916
Sherwood Medical Company
5/2/96 5.39 55,000 54,992
Societe Generale North America, Inc.
7/24/96 5.22 10,000 9,881
Standard Credit Card Master Trust I
5/15/96 5.18 12,000 11,976
5/16/96 5.22 20,000 19,957
6/7/96 5.42 10,000 9,945
Textron, Inc.
5/1/96 5.56 5,000 5,000
5/2/96 5.56 4,000 3,999
5/8/96 5.58 5,000 4,995
COMMERCIAL PAPER - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Textron, Inc. - continued
5/20/96 5.53% $ 12,000 $ 11,965
5/29/96 5.51 2,000 1,991
U.S.L. Capital, Inc.
5/3/96 5.38 20,000 19,994
6/14/96 5.34 12,000 11,922
WCP Funding, Inc.
5/6/96 5.40 10,000 9,993
5/17/96 5.40 9,000 8,979
Westdeutsche Landesbank
5/16/96 5.37 50,000 49,889
Westpac Capital Corp.
7/30/96 5.24 25,000 24,681
10/23/96 5.45 25,000 24,356
Woolwich Equitable Building Society
6/7/96 5.20 22,000 21,884
7/12/96 5.42 10,000 9,893
TOTAL COMMERCIAL PAPER 2,804,173
FEDERAL AGENCIES (A)- 9.9%
FEDERAL HOME LOAN BANK - AGENCY COUPONS - 1.4%
5/20/96 5.37 22,000 21,991
6/13/96 5.26 29,000 28,989
6/20/96 5.32 29,000 28,988
7/2/96 5.35 36,000 35,987
115,955
FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS - 6.7%
5/1/96 5.48 50,000 50,000
5/2/96 5.38 200,000 199,832
5/15/96 5.44 75,000 74,923
5/29/96 5.37 58,000 57,936
6/20/96 5.32 87,000 86,957
6/20/96 5.35 30,000 29,972
7/17/96 5.46 68,000 67,962
567,582
STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS - 1.8%
7/16/96 5.50 150,000 150,000
TOTAL FEDERAL AGENCIES 833,537
U.S. TREASURY OBLIGATIONS - 1.5%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILL - 0.3%
5/1/97 5.54% $ 25,000 $ 23,660
U.S. TREASURY NOTE - 1.2%
5/15/97 5.44 100,000 100,811
TOTAL U.S. TREASURY OBLIGATIONS 124,471
BANK NOTES - 5.5%
Bank of America National Trust & Savings Assoc.
5/1/96 5.40 (a) 41,000 40,992
Bank of New York
9/3/96 5.16 17,000 17,000
Bank of New York - Delaware
7/30/96 5.64 (a) 40,000 40,000
Boatmen's First National Bank of Kansas City
5/13/96 5.50 (a) 18,000 18,000
Boatmen's National Bank of St. Louis
5/13/96 5.50 (a) 22,000 22,000
Comerica Bank-Detroit
6/1/96 5.22 (a) 65,000 64,984
7/27/96 5.54 (a) 25,000 24,994
Comerica Bank-Illinois
7/2/96 5.47 (a) 20,000 19,992
First Union National Bank of North Carolina, N.A.
6/27/96 5.39 (a) 45,000 44,986
Household Bank, N.A.
7/16/96 5.40 12,000 12,000
Huntington National Bank
5/10/96 5.17 (a) 10,000 10,001
NBD Bank, N.A.
6/24/96 5.25 31,000 31,000
NationsBank of Texas
6/3/96 5.18 30,000 30,000
PNC Bank, N.A.
5/20/96 5.45 (a) 50,000 49,985
Wachovia Bank of North Carolina, N.A.
5/28/96 5.40 (a) 40,000 39,989
TOTAL BANK NOTES 465,923
MASTER NOTES (A) - 2.4%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Goldman Sachs Group, L.P. (The)
5/14/96 5.26% $ 47,000 $ 47,000
J.P. Morgan Securities
5/17/96 5.49 29,000 29,000
5/20/96 5.45 57,000 57,000
Norwest Corp.
5/1/96 5.41 65,000 65,000
TOTAL MASTER NOTES 198,000
MEDIUM-TERM NOTES (A) - 5.1%
Abbey National Treasury Services (b)
6/9/96 5.44 107,000 107,000
Beneficial Corp.
5/3/96 5.35 8,000 7,997
5/28/96 5.42 25,000 24,995
6/5/96 5.29 35,000 34,986
CIT Group Holdings, Inc.
5/1/96 5.40 20,000 19,993
Commonwealth Life Insurance Co.
5/1/96 5.73 35,000 35,000
General Electric Capital Corp.
5/22/96 5.19 20,000 20,003
General Motors Acceptance Corp.
5/1/96 5.43 47,000 47,000
7/5/96 5.34 18,000 18,009
7/28/96 5.55 20,000 20,047
Norwest Corp.
6/10/96 5.40 48,000 48,000
PHH Corp.
5/1/96 5.39 19,000 18,998
Transamerica Life Insurance and Annuity Co.
6/15/96 5.45 30,000 30,000
TOTAL MEDIUM-TERM NOTES 432,028
SHORT-TERM NOTES (A) - 5.4%
Capital One Funding Corp. (1995-D)
5/7/96 5.38 10,367 10,367
Capital One Funding Corp. (1994-E)
5/7/96 5.40 7,847 7,847
Capital One Funding Corp. (1995-E)
5/7/96 5.38 6,000 6,000
SHORT-TERM NOTES (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
Capital One Funding Corp. (1996-B)
5/7/96 5.38% $ 10,000 $ 10,000
SMM Trust Company (1995-B) (b)
5/2/96 5.49 20,000 20,000
SMM Trust Company (1995-D) (b)
7/27/96 5.54 32,000 32,000
SMM Trust Company (1995-I) (b)
5/29/96 5.49 51,000 50,999
SMM Trust Company (1995-J) (b)
5/15/96 5.52 87,000 87,000
SMM Trust Company (1995-N) (b)
5/8/96 5.30 19,000 19,000
SMM Trust Company (1995-P) (b)
6/15/96 5.43 37,000 37,000
SMM Trust Company (1996-V) (b)
6/26/96 5.49 175,000 175,000
TOTAL SHORT-TERM NOTES 455,213
REPURCHASE AGREEMENTS - 2.4%
MATURITY AMOUNT
(000S)
With Goldman Sachs & Co.:
At 5.38%, dated 2/1/96 due 5/1/96:
U.S. Government Obligations
(principal amount $208,740,000)
6.369% to 7.262%, 3/1/33 to 1/1/35 $ 202,690 200,000
In a joint trading account
(U.S. Government Obligations)
dated 4/30/96 due 5/1/96:
At 5.39% 708 708
TOTAL REPURCHASE AGREEMENTS 200,708
TOTAL INVESTMENTS - 100% $ 8,438,772
Total Cost for Income Tax Purposes $ 8,438,772
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due date on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(a) 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 $527,999,000 or 6.2% of net
assets.
INCOME TAX INFORMATION
At April 30, 1996, the fund had a capital loss carryforward of
approximately $2,831,000 of which $301,000, $1,893,000, $476,000 and
$161,000 will expire on April 30, 2001, 2002, 2003 and 2004, respectively.
A total of 1.9% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
(EXCEPT PER SHARE AMOUNTS) APRIL 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 8,438,772
agreements of $200,708) - See accompanying
schedule
Cash 939
Receivable for investments sold 23,674
Interest receivable 46,202
TOTAL ASSETS 8,509,587
LIABILITIES
Payable for investments purchased $ 47,320
Share transactions in process 6,729
Distributions payable 1,816
Accrued management fee 3,177
TOTAL LIABILITIES 59,042
NET ASSETS $ 8,450,545
Net Assets consist of:
Paid in capital $ 8,453,376
Accumulated net realized gain (loss) on investments (2,831)
NET ASSETS, for 8,452,865 shares outstanding $ 8,450,545
NET ASSET VALUE, offering price and redemption price per $1.00
share ($8,450,545 (divided by) 8,452,865 shares)
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1996
INTEREST INCOME $ 487,070
EXPENSES
Management fee $ 37,282
Non-interested trustees' compensation 33
Total expenses before reductions 37,315
Expense reductions (2,102) 35,213
NET INTEREST INCOME 451,857
NET REALIZED GAIN (LOSS) ON INVESTMENTS (161)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 451,696
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 451,857 $ 358,979
Net interest income
Net realized gain (loss) (161) (477)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 451,696 358,502
FROM OPERATIONS
Distributions to shareholders from net interest income (451,857) (358,979)
Share transactions at net asset value of $1.00 per share 12,078,072 11,531,847
Proceeds from sales of shares
Reinvestment of distributions from net interest income 435,783 343,973
Cost of shares redeemed (11,698,500) (10,693,390)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 815,355 1,182,430
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 815,194 1,181,953
NET ASSETS
Beginning of period 7,635,351 6,453,398
End of period $ 8,450,545 $ 7,635,351
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,
1996 1995 1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .054 .049 .031 .035 .053
Operations
Net interest income
Less Distributions (.054) (.049) (.031) (.035) (.053)
From net interest income
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A 5.57% 4.97% 3.14% 3.51% 5.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 8,451 $ 7,635 $ 6,453 $ 4,542 $ 5,371
(in millions)
Ratio of expenses to average .45% .44% .31% .30% .34%
net assets B B
Ratio of expenses to average .42% .44% .31% .30% .34%
net assets after expense C
reductions
Ratio of net interest income to 5.45% 4.89% 3.12% 3.46% 5.32%
average net assets
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Money Market Fund (the fund) is a fund of Fidelity Hereford 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 Delaware business trust. The financial statements have been
prepared in conformity with generally accepted accounting principles which
permit management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the 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 substantially 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 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.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase, and are collateralized
by U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
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
.45% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$303,000 for the period.
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.
4. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $2,102,000 under these
arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Hereford Street Trust and the Shareholders of
Spartan Money Market Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Hereford Street Trust: Spartan Money Market Fund, including the
schedule of portfolio investments, as of April 30, 1996, 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, 1996 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 Hereford Street Trust: Spartan Money Market Fund as of April
30, 1996, 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.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 21, 1996
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
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
Fred L. Henning, Jr., Vice President
John Todd, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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. TREASURY
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 11 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 15 Notes to the financial statements.
REPORT OF INDEPENDENT 17 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was almost ideal.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income) and the
effect of the fund's $5 account closeout fee on an average sized account.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses during the periods
shown, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan U.S. Treasury Money Market 5.24% 22.83% 56.79%
100% U.S. Treasury Money Market 5.03% 21.57% n/a
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 5, 1988. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the 100% U.S. Treasury money market funds
average, which reflects the performance of 39 100% U.S. Treasury money
market funds with similar objectives tracked by IBC Financial Data, Inc.
over the past 12 months. (The periods covered by IBC Financial Data, Inc.
numbers are the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan U.S. Treasury Money Market 5.24% 4.20% 5.55%
100% U.S. Treasury Money Market 5.03% 3.98% n/a
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
4/25/95 8/1/95 10/31/95 1/30/96 4/30/96
Spartan U.S. Treasury 5.55% 5.27% 5.08% 4.98% 4.77%
Money Market
If Fidelity had not reimburs 5.45% - - - 4.75%
ed
certain fund expenses
100% U.S. Treasury Money 5.25% 5.06% 4.88% 4.72% 4.51%
Market Funds Average
4/26/95 8/1/95 11/1/95 1/31/96 5/1/96
2.88% 2.85% 2.85% 2.81% 2.67%
MMDA
Row: 1, Col: 1, Value: 5.55
Row: 1, Col: 2, Value: 5.25
Row: 1, Col: 3, Value: 2.88
Row: 2, Col: 1, Value: 5.27
Row: 2, Col: 2, Value: 5.06
Row: 2, Col: 3, Value: 2.85
Row: 3, Col: 1, Value: 5.08
Row: 3, Col: 2, Value: 4.88
Row: 3, Col: 3, Value: 2.85
Row: 4, Col: 1, Value: 4.98
Row: 4, Col: 2, Value: 4.72
Row: 4, Col: 3, Value: 2.81
Row: 5, Col: 1, Value: 4.77
Row: 5, Col: 2, Value: 4.51
Row: 5, Col: 3, Value: 2.67
Spartan
U.S. Treasury
Money Market
100% U.S.
Treasury Money
Market Funds
Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. If the
adviser had not reimbursed certain fund expenses during the periods shown,
the yields would have been lower. You can compare these yields to the100%
U.S. Treasury money market funds average and the average bank money market
deposit account (MMDA). Figures for the 100% U.S. Treasury money market
funds average are from IBC Financial Data, Inc. The MMDA average is
supplied by BANK RATE MONITOR(Trademark).
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
There are some important
differences between a bank
money market deposit
account (MMDA) and a
money market fund. First, the
U.S. Government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money market fund will
maintain a $1 share price.
Second, a money market
fund returns to its
shareholders income earned
by the fund's investments
after expenses. This is in
contrast to banks, which set
their MMDA rates periodically
based on current interest
rates, competitors' rates, and
internal criteria.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Leland Barron, Portfolio Manager of Spartan U.S. Treasury
Money Market Fund
Q. LELAND, HOW HAVE ECONOMIC DEVELOPMENTS INFLUENCED INTEREST RATES DURING
THE PAST YEAR?
A. As expectations about the strength of the economy have shifted, so has
the direction of short-term interest rates. A year ago last April, interest
rates were falling as most market participants prepared for the likelihood
of an eventual rate cut by the Federal Reserve. Following several months of
weak economic data, in July the Fed shaved one-quarter percentage point off
the rate banks charge each other for overnight loans, known as the federal
funds rate. That was the first rate cut after a string of seven rate
increases which had doubled the federal funds rate between February 1994
and February 1995. Then during the third quarter of 1995 the economy showed
surprising strength, and the Fed retreated to the sidelines. But last
December, with inflation pressures in abeyance and Congress and the White
House seemingly on the verge of striking a balanced budget agreement, the
Fed again lowered the federal funds rate one-quarter percentage point, to
5.50%.
Q. HOW HAS THE MOOD OF THE MARKET CHANGED IN RECENT MONTHS?
A. In January the Fed lowered the federal funds rate for the third time, to
5.25%. At the time, most market participants assumed the Fed would keep
lowering rates on into the spring. That optimism caused the interest rate
on the six-month Treasury bill to trade nearly half a percentage point
below the federal funds rate. Then came the release of the February
employment report, which was significantly stronger than expected, and the
mood changed dramatically. That report, combined with the surprising
strength of the housing market, higher consumer confidence and continued
consumer spending, led most market participants to abandon hopes of further
rate cuts and begin preparing instead for a rate increase. Given this
change in sentiment, by the the end of April, the yield on the six-month
Treasury bill was back to the same level as the federal funds rate.
Q. HOW DID YOU MANAGE THE FUND'S AVERAGE MATURITY AS CONDITIONS CHANGED?
A. The fund began the period with an average maturity of 64 days, which I'd
characterize as neutral to aggressive. That was appropriate in light of
expectations that interest rates were coming down. In the months that
followed, I gradually extended the fund's average maturity even further,
out beyond 70 days. As expectations of another rate cut diminished, I let
the fund's average maturity roll back down into the mid 50s. More recently,
it was at 79 days when the period ended because I felt that the market was
oversold on a short-term basis.
Q. HOW DID THE FUND PERFORM?
A. Better than most of its competitors. On April 30, 1996, the fund's
seven-day yield was 4.77%, compared to 5.46% a year ago. The fund's total
return for the year was 5.24%. That beat the average total return of 5.03%
during the same period for all 100% U.S. Treasury money market funds,
according to IBC Financial Data, Inc.
Q. WHAT'S THE OUTLOOK FOR THE NEXT SEVERAL MONTHS?
A. In the most general terms, I would expect the economy to get stronger
rather than weaker over the next several months. However, I do not expect
growth to accelerate to the point where the Fed would be so concerned about
inflation that it would choose to raise the federal funds rate, at least
not right away. My goal going forward will be to preserve flexibility
without sacrificing yield, which would result in an average maturity of
between 50 and 60 days in the months ahead.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: income while
maintaining a stable $1
share price by investing in
U.S. Treasury money market
securities whose interest is
free from state and local
income taxes
START DATE: January 5, 1988
SIZE: as of April 30, 1996
more than $1.7 billion
MANAGER: Leland Barron,
since 1991; manager,
Fidelity U.S. Government
Reserves and Spartan U.S.
Government Money Market
Fund, since 1991; joined
Fidelity in 1981
(checkmark)
WORDS TO KNOW
AVERAGE MATURITY: The average
maturity of debt securities in a
fund, weighted by dollar
amount. When the average
maturity is short, the fund
manager believes interest
rates will rise. When the
average maturity is long, the
fund manager is expecting
rates to fall.
DISCOUNT RATE: The interest rate
the Federal Reserve charges
member banks for loans.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
FEDERAL RESERVE: The
system designed to regulate
the U.S. monetary and
banking system. If the Fed
tightens the money supply, it
decreases the amount of
money available to the
banking system, which
generally causes interest
rates to rise.
MATURITY: The amount of time
remaining before a debt
security is scheduled to be
redeemed.
TREASURY OBLIGATION: Debt
security issued directly by the
U.S. government. Payment of
principal and interest are
guaranteed.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
4/30/96 10/31/95 4/30/95
0 - 30 21 27 24
31 - 90 37 27 51
91 - 180 34 42 25
181 - 397 8 4 0
WEIGHTED AVERAGE MATURITY
4/30/96 10/31/95 4/30/95
Spartan U.S. Treasury
Money Market Fund 79 days 74 days 64 days
100% U.S. Treasury
Money Market Funds
Average* 62 days 64 days 50 days
ASSET ALLOCATION
AS OF APRIL 30, 1996 AS OF OCTOBER 31, 1995
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 1, Value: 45.0
Row: 1, Col: 2, Value: 55.0
U.S. Treasury
bills 25%
U.S. Treasury
notes 75%
U.S. Treasury
bills 45%
U.S. Treasury
notes 55%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS APRIL 30, 1996
Showing Percentage of Total Value of Investments
U.S. TREASURY OBLIGATIONS - 100.0%
DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1)
DATE TIME OF PURCHASE (000S) (000S)
U.S. TREASURY BILLS - 25.0%
5/2/96 5.08% $ 34,120 $ 34,115
5/9/96 5.07 82,477 82,385
6/6/96 4.93 35,027 34,850
7/25/96 5.05 3,020 2,984
7/25/96 5.06 191,430 189,164
8/15/96 4.86 1,593 1,571
10/3/96 5.25 3,875 3,790
10/10/96 5.20 63,043 61,605
10/17/96 5.24 28,000 27,330
4/3/97 5.67 7,041 6,687
444,481
U.S. TREASURY NOTES - 75.0%
5/15/96 5.07 23,114 23,133
5/15/96 5.10 25,000 25,020
5/15/96 5.15 4,289 4,287
5/15/96 5.18 150,000 149,943
5/15/96 5.20 30,000 30,023
5/15/96 5.21 19,250 19,264
5/31/96 4.93 108,000 108,068
5/31/96 5.05 42,000 42,021
5/31/96 5.12 109,430 109,527
6/30/96 4.94 134,595 135,003
6/30/96 5.00 40,812 40,873
7/31/96 4.87 45,000 45,131
7/31/96 4.88 3,347 3,357
7/31/96 4.90 15,699 15,811
7/31/96 4.93 30,000 30,083
7/31/96 5.06 28,000 28,187
7/31/96 5.07 142,545 142,871
8/15/96 5.00 47,000 46,907
8/15/96 5.02 61,000 60,877
8/31/96 5.32 25,000 25,143
9/30/96 4.91 8,405 8,452
9/30/96 4.94 13,561 13,634
9/30/96 5.11 10,810 10,861
9/30/96 5.19 28,000 28,137
9/30/96 5.21 30,000 30,145
10/15/96 5.10 28,000 28,325
10/31/96 5.10 70,000 70,508
10/31/96 5.13 56,000 56,398
1,331,989
TOTAL INVESTMENTS - 100% $ 1,776,470
Total Cost for Income Tax Purposes $ 1,776,470
INCOME TAX INFORMATION
At April 30, 1996 the fund had a capital loss carryforward of approximately
$266,000 of which $219,000 and $47,000 will expire on April 30, 2002 and
2004, respectively.
A total of 100% of the dividends distributed during the fiscal year was
derived from income on U.S. Government securities.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
(EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1996
ASSETS
Investment in securities, at value - $ 1,776,470
See accompanying schedule
Interest receivable 23,004
TOTAL ASSETS 1,799,474
LIABILITIES
Share transactions in process $ 3,693
Distributions payable 348
Accrued management fee 670
TOTAL LIABILITIES 4,711
NET ASSETS $ 1,794,763
Net Assets consist of:
Paid in capital $ 1,794,898
Accumulated net realized gain (loss) on investments (135)
NET ASSETS, for 1,794,898 shares outstanding $ 1,794,763
NET ASSET VALUE, offering price and redemption price per $1.00
share ($1,794,763 (divided by) 1,794,898 shares)
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1996
INTEREST INCOME $ 99,148
EXPENSES
Management fee $ 8,016
Non-interested trustees' compensation 7
Total expenses before reductions 8,023
Expense reductions (430) 7,593
NET INTEREST INCOME 91,555
NET REALIZED GAIN (LOSS) ON INVESTMENTS (47)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 91,508
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NINE MONTH
APRIL 30, PERIOD ENDED
1996 APRIL 30,
1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 91,555 $ 58,910
Net interest income
Net realized gain (loss) (47) 94
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 91,508 59,004
FROM OPERATIONS
Distributions to shareholders from net interest income (91,555) (58,910)
Share transactions at net asset value of $1.00 per share 1,906,021 1,417,465
Proceeds from sales of shares
Reinvestment of distributions from net interest income 87,350 56,002
Cost of shares redeemed (1,876,256) (1,352,267)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 117,115 121,200
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 117,068 121,294
NET ASSETS
Beginning of period 1,677,695 1,556,401
End of period $ 1,794,763 $ 1,677,695
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED NINE MONTH YEARS ENDED JULY 31,
APRIL 30, PERIOD ENDED
APRIL 30,
1996 1995 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .051 .036 .030 .028 .046
Investment
Operations
Net interest income
Less Distributions (.051) (.036) (.030) (.028) (.046)
From net interest
income
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
end of period
TOTAL RETURN B 5.25% 3.66% 2.99% 2.87% 4.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, $ 1,795 $ 1,678 $ 1,556 $ 1,749 $ 2,475
end of period
(in millions)
Ratio of expenses to .45% .45% A, .45% D .42% D .25% D
average net assets D
Ratio of expenses .43% C .45% A .45% .42% .25%
to average net
assets
after expense
reductions
Ratio of net interest 5.14% 4.85% A 2.94% 2.85% 4.61%
income to average
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 3 OF
NOTES TO FINANCIAL STATEMENTS).
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan U.S. Treasury Money Market Fund (the fund) is a fund of Fidelity
Hereford 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 Delaware business trust. The financial statements
have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the 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 substantially 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 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. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .45% of the fund's average net
assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$45,000 for the period.
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.
3. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $430,000 under these
arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders
of Spartan U.S. Treasury Money
Market Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of Spartan
U.S. Treasury Money Market Fund, at April 30, 1996, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for the periods indicated in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Spartan U.S. Treasury Money Market Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities owned at April 30, 1996 by
correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Dallas, Texas
May 28, 1996
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
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
Fred L. Henning, Jr., Vice President
Leland C. Barron, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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
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
