SPARTAN(REGISTERED TRADEMARK)
MONEY MARKET
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1999
(2_FIDELITY_LOGOS)(registered trademark)
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.
FINANCIAL STATEMENTS 22 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 26 Notes to the financial
statements.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE 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 1-800-544-6666
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
All major U.S. equity market indexes posted positive returns for the
month of October, led by the technology-heavy NASDAQ Index, which
climbed to a record high close during the month. Domestic bonds,
however, turned in relatively flat performance, due in large part to
lingering fears of a potential interest rate hike by the Federal
Reserve Board, and its adoption of a tightening bias during the first
week of the month.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the past five year and past 10 year total
returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1999
SPARTAN MONEY MARKET 2.45% 4.91% 29.61% 67.60%
All Taxable Money Market 2.30% 4.58% 27.98% 61.37%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. 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 taxable money market
funds with similar objectives tracked by IBC Financial Data, Inc. The
past six months average represents a peer group of 955 money market
funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1999
SPARTAN MONEY MARKET 4.91% 5.32% 5.30%
All Taxable Money Market 4.58% 5.05% 4.90%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
11/2/99 8/3/99 4/27/99 2/2/99 11/3/98
Spartan Money Market Fund 5.19% 4.73% 4.59% 4.84% 5.02%
All Taxable Money Market 4.83% 4.50% 4.28% 4.41% 4.72%
Funds Average
11/3/99 7/28/99 4/28/99 2/3/99 10/28/98
MMDA 2.07% 2.04% 2.10% 2.21% 2.45%
Spartan Money
Market Fund
All Taxable Money
Market Funds
Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 5.19
Row: 1, Col: 2, Value: 4.85
Row: 1, Col: 3, Value: 2.07
Row: 2, Col: 1, Value: 4.73
Row: 2, Col: 2, Value: 4.5
Row: 2, Col: 3, Value: 2.04
Row: 3, Col: 1, Value: 4.59
Row: 3, Col: 2, Value: 4.28
Row: 3, Col: 3, Value: 2.1
Row: 4, Col: 1, Value: 4.84
Row: 4, Col: 2, Value: 4.41
Row: 4, Col: 3, Value: 2.21
Row: 5, Col: 1, Value: 5.02
Row: 5, Col: 2, Value: 4.72
Row: 5, Col: 3, Value: 2.45
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the all
taxable money market funds average and the bank money market deposit
account (MMDA) average. 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).
(checkmark)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.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of John Todd)
An interview with John Todd, Portfolio Manager of Spartan Money Market
Fund
Q. JOHN, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE OVER THE SIX MONTHS
THAT ENDED OCTOBER 31, 1999?
A. At the beginning of the period, the markets had recovered from the
global financial meltdown that had occurred in late 1998. To help
alleviate that crisis, the Federal Reserve Board had reduced the rate
that banks charge each other for overnight loans - known as the fed
funds target rate - by 0.25 percentage points three times, bringing
the fed funds rate down to 4.75%. At the same time, economies in Asia,
including Japan, seemed to be reviving. That rebirth helped spark a
recovery in oil and other commodity prices. The Asian recovery,
coupled with Latin America's ability to head off the threat of an
additional financial crisis, helped convince U.S. markets that the
international economic situation had stabilized. As investors turned
their eyes back to the domestic scene, they saw an economy that
continued to grow at a fairly robust rate. Final demand - meaning
retail sales - remained strong, but standard inflation measures such
as the consumer price index (CPI) and the producer price index (PPI)
stayed fairly under control. In May, however, a report was released
showing an unexpected outsized gain in the CPI in April, which later
proved to be short-lived, but put the markets on alert and also
captured the attention of the Fed. In addition, many stock market
indexes reached new highs during this period.
Q. HOW DID THE FED RESPOND TO THESE CONDITIONS?
A. At its May meeting, the Fed shifted from a neutral interest-rate
stance to a bias toward hiking rates to head off inflation. The Fed
followed through with a 0.25 percentage-point increase in the fed
funds rate at the end of June, although it went back to a neutral
stance at that time. Nevertheless, market observers expected the Fed
to take back the three rate cuts it implemented in late 1998. The Fed
raised the fed funds rate by 0.25 percentage points once again in
August - it stood at 5.25% at the end of the period - then announced
at its October Open Market Committee meeting its shift from a neutral
stance back to a bias toward raising rates again in the future.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. The fund's average maturity stood at 65 days at the beginning of
the period. With the CPI scare at the beginning of May, yields in the
market rose in anticipation of Fed action. By the end of July, I had
increased the fund's average maturity to 73 days. I did so primarily
by investing in one-year securities, which were attractive because
they factored in the rising rates we felt were imminent. At the same
time, I preserved liquidity to position the fund to take advantage of
rising yields built into the short-term market brought on by market
pressures. I also increased the fund's holdings in variable-rate
securities - whose yields are reset periodically - to about 23% of the
fund at the end of the period. These instruments should ratchet up in
yield in response to actual and potential Fed rate hikes and the
higher yields the market historically experiences at the end of the
calendar year.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on October 31, 1999, was 5.18%, compared
to 4.59% six months ago. For the six months that ended October 31,
1999, the fund had a total return of 2.45%, compared to 2.30% for the
all taxable money market funds average, according to IBC Financial
Data, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. The big question is whether or not the Fed will take back the last
of the three rate hikes it implemented in late 1998, bringing the fed
funds rate back to 5.50%. My sense at this point is that the Fed will
do so before the end of the year. The Fed appeared relatively
comfortable with its monetary policy before last year's global
economic crisis, when it felt compelled to lower rates to benefit the
financial markets. At that point, the fed funds rate was at 5.50% and
the economy was healthy without exhibiting excesses that might lead to
inflation.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks high current
income with share price
stability by investing in
high-quality, short-term
money market securities of
domestic and foreign issuers
and repurchase agreements
FUND NUMBER: 454
TRADING SYMBOL: SPRXX
START DATE: January 23,
1989
SIZE: as of October 31,
1999, more than $9.7
billion
MANAGER: John Todd, since
1989; manager, various
Fidelity and Spartan money
market funds; joined Fidelity
in 1981
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99 % OF FUND'S INVESTMENTS
10/31/99 10/31/98
0 - 30 44.8 39.5 28.2
31 - 90 15.1 34.4 32.6
91 - 180 34.2 19.5 33.5
181 - 397 5.9 6.6 5.7
WEIGHTED AVERAGE MATURITY
10/31/99 4/30/99 10/31/98
Spartan Money Market Fund 69 DAYS 65 Days 73 Days
All Taxable Money Market 57 DAYS 61 Days 58 Days
Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF OCTOBER 31, 1999 AS OF APRIL 30, 1999
Commercial Paper 53.7% Commercial Paper 41.5%
Bank CDs, BAs, TDs, and Bank CDs, BAs, TDs, and
Notes 45.9% Notes 58.4%
Other Investments and Net Other Investments and Net
Other Assets 0.4% Other Assets 0.1%
Row: 1, Col: 1, Value: 53.7 Row: 1, Col: 1, Value: 41.4
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: nil Row: 1, Col: 3, Value: nil
Row: 1, Col: 4, Value: 45.9 Row: 1, Col: 4, Value: 58.1
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: nil
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.4 Row: 1, Col: 8, Value: 0.1
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS OCTOBER 31, 1999 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 27.9%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
DOMESTIC CERTIFICATES OF
DEPOSIT - 2.0%
First Union National Bank,
North Carolina
11/20/99 5.55% (b) $ 60,000 $ 60,000
Fleet National Bank
11/3/99 5.34 (b) 38,000 37,981
Morgan Guaranty Trust Co., NY
2/22/00 6.10 60,000 60,000
US Bank NA Minnesota
3/20/00 5.95 38,000 38,000
195,981
LONDON BRANCH, EURODOLLAR,
FOREIGN BANKS - 5.2%
Abbey National PLC
11/10/99 5.39 59,000 59,000
Abbey National Treasury
Services PLC
12/17/99 5.30 70,000 70,000
Bank of Scotland Treasury
Services PLC
2/16/00 5.14 35,000 34,996
Bayerische Hypo-und
Vereinsbank AG
3/8/00 6.00 50,000 50,000
Commerzbank AG
11/18/99 5.00 25,000 25,000
Halifax PLC
11/8/99 4.95 55,000 55,000
11/9/99 5.39 55,000 55,000
12/13/99 5.00 50,000 50,000
2/1/00 6.13 75,000 75,000
Svenska Handelsbanken AB
11/18/99 5.00 35,000 35,000
508,996
NEW YORK BRANCH, YANKEE
DOLLAR, FOREIGN BANKS - 20.7%
Bank of Montreal
3/3/00 5.35 40,000 39,990
Banque Nationale de Paris
8/2/00 5.85 50,000 49,984
Barclays Bank PLC
11/1/99 5.38 (b) 95,000 94,975
11/1/99 5.39 (b) 50,000 49,984
11/1/99 5.39 (b) 25,000 24,992
3/1/00 5.30 60,000 59,989
CERTIFICATES OF DEPOSIT -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
NEW YORK BRANCH, YANKEE
DOLLAR, FOREIGN BANKS -
CONTINUED
Barclays Bank PLC - continued
6/14/00 5.66% $ 70,000 $ 69,979
Bayerische Hypo-und
Vereinsbank AG
2/10/00 5.12 50,000 49,995
Canadian Imperial Bank of
Commerce
11/1/99 5.38 (b) 100,000 99,969
2/23/00 5.17 35,000 34,995
2/29/00 5.24 27,000 26,997
5/18/00 5.30 50,000 49,982
Credit Communale de Belgique
3/7/00 6.00 50,000 50,000
Den Danske Bank Group AS
11/10/99 5.33 (b) 25,000 24,994
Deutsche Bank AG
11/3/99 5.38 25,000 25,000
1/14/00 6.00 50,000 50,000
1/28/00 6.00 50,000 49,996
2/10/00 5.11 30,000 29,997
2/16/00 5.12 50,000 49,993
Dresdner Bank AG
11/23/99 5.38 (b) 30,000 29,992
Landesbank Hessen-Thuringen
3/1/00 5.22 50,000 49,992
Lloyds Bank PLC
7/17/00 5.70 20,000 19,993
National Westminster Bank PLC
3/15/00 5.15 45,000 44,981
Norddeutsche Landesbank
Girozentrale
2/10/00 5.10 20,000 19,998
5/18/00 5.33 25,000 24,991
7/12/00 5.76 25,000 24,992
RaboBank Nederland Coop.
Central
7/12/00 5.75 50,000 49,983
Royal Bank of Canada
11/1/99 5.39 (b) 45,000 44,988
11/18/99 5.34 (b) 30,000 29,988
2/18/00 5.15 40,000 39,996
2/28/00 5.26 20,000 19,997
CERTIFICATES OF DEPOSIT -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
NEW YORK BRANCH, YANKEE
DOLLAR, FOREIGN BANKS -
CONTINUED
Royal Bank of Scotland PLC
1/31/00 6.04% $ 85,000 $ 85,000
Societe Generale, France
11/19/99 5.36 (b) 36,000 35,988
11/29/99 5.40 (b) 31,000 30,965
12/6/99 5.21 81,000 81,000
Svenska Handelsbanken AB
11/16/99 5.52 (b) 34,000 34,001
Toronto Dominion Bank
12/8/99 5.22 25,000 25,000
2/18/00 5.15 50,000 49,995
6/12/00 5.60 75,000 74,974
UBS AG
2/28/00 5.20 50,000 49,995
5/18/00 5.35 65,000 64,980
7/5/00 5.80 50,000 49,987
Westdeutsche Landesbank
Girozentrale
11/8/99 5.35 50,000 50,000
11/22/99 5.34 50,000 50,000
2,013,587
TOTAL CERTIFICATES OF DEPOSIT 2,718,564
COMMERCIAL PAPER - 53.7%
ABN-AMRO North America, Inc.
12/6/99 5.20 24,000 23,882
American Express Credit Corp.
3/1/00 6.00 25,000 24,508
American Home Products Corp.
2/15/00 5.92 25,000 24,577
Aspen Funding Corp.
11/15/99 5.46 (b) 60,000 60,000
1/26/00 6.16 56,000 55,191
Asset Securitization Coop.
Corp.
11/3/99 5.51 (b) 3,000 3,000
11/3/99 5.51 (b) 50,000 50,000
11/9/99 5.47 (b) 35,000 34,998
11/10/99 5.46 (b) 60,000 60,000
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Asset Securitization Coop.
Corp. - continued
12/20/99 5.54% (b) $ 55,000 $ 55,000
2/24/00 6.00 65,000 63,783
Associates First Capital BV
2/10/00 5.95 50,000 49,189
Associates First Capital Corp.
12/14/99 5.39 25,000 24,843
BankAmerica Corp.
2/24/00 5.90 50,000 49,086
Centric Capital Corp.
11/26/99 5.37 35,000 34,870
2/4/00 6.16 17,000 16,728
Chase Manhattan Corp.
4/26/00 6.03 85,000 82,555
CIESCO LP
11/1/99 5.35 1,000 1,000
11/10/99 5.37 12,000 11,984
11/17/99 5.35 10,000 9,976
CIT Group, Inc.
11/15/99 5.33 15,000 14,969
Citibank Credit Card Master
Trust I (Dakota Certificate
Program)
11/9/99 5.42 30,000 29,964
11/9/99 5.44 16,000 15,981
11/10/99 5.40 12,000 11,984
11/18/99 5.40 34,000 33,914
11/23/99 5.43 40,000 39,868
Commonwealth Bank of Australia
11/18/99 5.02 25,000 24,942
ConAgra, Inc.
11/1/99 5.43 22,000 22,000
11/1/99 5.45 23,000 23,000
11/16/99 5.50 36,000 35,918
11/17/99 5.48 4,000 3,990
Conoco, Inc.
11/22/99 5.48 20,000 19,936
11/22/99 5.51 14,000 13,955
Corporate Receivables Corp.
1/25/00 6.11 30,000 29,575
2/9/00 6.15 25,000 24,581
2/11/00 6.15 15,000 14,744
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Cregem North America, Inc.
11/4/99 4.97% $ 25,000 $ 24,990
CXC, Inc.
11/17/99 5.42 10,000 9,976
11/22/99 5.49 (b) 55,000 54,996
Daimler-Chrysler North
America Holding Corp.
11/3/99 5.44 15,000 14,996
2/16/00 5.86 15,000 14,747
2/23/00 6.10 18,000 17,660
2/23/00 6.13 10,000 9,810
3/6/00 6.05 22,000 21,546
3/7/00 5.95 18,000 17,633
3/8/00 5.93 25,000 24,489
Delaware Funding Corp.
11/8/99 5.42 30,259 30,227
11/18/99 5.47 22,214 22,157
Deutsche Bank Financial, Inc.
12/8/99 5.21 100,000 99,479
Edison Asset Securitization LLC
11/8/99 5.44 34,000 33,964
11/15/99 5.46 14,000 13,970
11/17/99 5.42 30,000 29,928
2/8/00 5.92 13,000 12,794
2/9/00 6.00 30,179 29,688
3/1/00 5.93 22,000 21,574
3/6/00 5.96 12,000 11,756
3/6/00 6.01 28,000 27,428
3/10/00 5.96 18,000 17,623
3/13/00 5.96 30,000 29,358
Enterprise Funding Corp.
11/2/99 5.41 35,767 35,762
11/15/99 5.35 78,869 78,706
11/15/99 5.41 20,000 19,958
11/16/99 5.35 12,034 12,007
11/17/99 5.40 10,000 9,976
11/18/99 5.38 15,193 15,155
11/22/99 5.47 29,879 29,785
1/28/00 6.21 19,155 18,869
2/14/00 6.15 13,000 12,771
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Falcon Asset Securitization
Corp.
11/1/99 5.46% $ 15,000 $ 15,000
11/10/99 5.45 12,000 11,984
11/12/99 5.47 10,000 9,984
11/15/99 5.38 17,000 16,965
11/15/99 5.40 10,455 10,433
11/18/99 5.44 59,670 59,518
11/19/99 5.38 30,000 29,920
1/31/00 6.03 24,000 23,642
2/3/00 6.01 22,450 22,105
2/4/00 6.02 16,000 15,752
2/7/00 6.02 22,000 21,648
2/7/00 6.16 34,438 33,871
Finova Capital Corp.
11/9/99 5.62 (b) 25,000 25,000
Fleet Funding Corp.
2/3/00 6.16 10,000 9,842
2/16/00 6.18 20,000 19,640
Fortis Funding LLC
3/7/00 5.90 62,000 60,747
GE Capital International
Funding, Inc.
2/22/00 6.09 30,000 29,439
3/13/00 5.91 60,000 58,730
3/15/00 6.06 25,000 24,447
General Electric Capital Corp.
2/16/00 5.60 25,000 24,597
2/24/00 5.60 50,000 49,136
3/3/00 5.90 50,000 49,018
3/3/00 6.04 100,000 97,988
3/10/00 5.91 40,000 39,169
3/10/00 6.10 50,000 48,924
General Electric Capital
Services, Inc.
2/14/00 5.60 50,000 49,210
General Electric Co.
11/15/99 5.33 40,000 39,918
General Motors Acceptance Corp.
11/15/99 5.33 50,000 49,897
2/16/00 5.60 75,000 73,792
2/22/00 5.90 75,000 73,653
2/23/00 5.60 75,000 73,713
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
General Motors Acceptance
Corp. - continued
2/23/00 5.90% $ 50,000 $ 49,094
3/6/00 5.90 80,000 78,398
3/7/00 5.91 30,000 29,395
Goldman Sachs Group, Inc.
2/9/00 5.80 60,000 59,063
GTE Corp.
11/9/99 5.41 54,000 53,935
11/15/99 5.43 24,000 23,950
Heller Financial, Inc.
11/1/99 5.31 50,000 50,000
11/15/99 5.47 8,000 7,983
11/16/99 5.47 6,000 5,986
11/18/99 5.47 6,000 5,985
11/22/99 5.47 6,000 5,981
12/14/99 5.57 12,000 11,921
Household Finance Corp.
2/14/00 5.85 25,000 24,586
J.P. Morgan & Co., Inc.
12/6/99 5.20 50,000 49,754
2/9/00 5.62 50,000 49,243
Kitty Hawk Funding Corp.
11/19/99 5.37 48,165 48,036
11/19/99 5.41 20,000 19,946
11/22/99 5.47 8,801 8,773
1/26/00 6.22 30,723 30,273
Lehman Brothers Holdings, Inc.
1/18/00 6.36 37,000 36,500
2/9/00 6.30 23,000 22,607
Lloyds Bank PLC
11/17/99 5.00 25,000 24,946
Marsh USA, Inc.
2/15/00 5.71 28,000 27,544
3/22/00 5.92 34,000 33,229
MCI WorldCom, Inc.
11/15/99 5.48 (b) 40,000 40,000
Morgan Stanley Dean Witter &
Co.
2/2/00 5.62 70,000 69,014
New Center Asset Trust
11/3/99 5.40 46,000 45,986
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Newport Funding Corp.
2/1/00 6.17% $ 32,000 $ 31,505
Norfolk Southern Corp.
11/3/99 5.60 11,116 11,113
11/10/99 5.56 12,000 11,983
11/15/99 5.56 6,000 5,987
Park Avenue Receivables Corp.
11/3/99 5.43 20,680 20,674
11/8/99 5.43 8,000 7,992
11/18/99 5.39 12,000 11,970
1/26/00 6.22 30,000 29,561
2/15/00 6.13 17,676 17,364
PHH Corp.
11/15/99 5.50 15,000 14,968
Preferred Receivables Funding
Corp.
11/2/99 5.46 15,000 14,998
11/9/99 5.40 50,000 49,940
11/15/99 5.47 35,000 34,927
11/16/99 5.45 16,000 15,964
11/17/99 5.38 42,330 42,229
11/18/99 5.46 10,000 9,975
1/27/00 6.14 25,000 24,636
1/31/00 6.01 14,000 13,792
2/4/00 6.00 20,000 19,690
2/9/00 6.00 26,000 25,577
2/17/00 6.15 16,790 16,486
Rohm & Haas Co.
11/2/99 5.42 20,000 19,997
3/8/00 6.35 15,000 14,672
Salomon Smith Barney
Holdings, Inc.
2/8/00 5.63 50,000 49,249
2/9/00 5.90 40,000 39,363
2/14/00 5.85 20,000 19,669
The Bear Stearns Companies,
Inc.
2/23/00 5.72 35,000 34,387
Three Rivers Funding Corp.
11/10/99 5.40 25,000 24,966
11/15/99 5.38 25,000 24,948
11/16/99 5.40 14,396 14,364
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Triple-A One Funding Corp.
11/3/99 5.42% $ 44,000 $ 43,987
11/12/99 5.41 24,641 24,600
11/17/99 5.40 10,000 9,976
1/27/00 6.17 9,198 9,064
Tyco International Group SA
11/3/99 5.58 7,000 6,998
11/10/99 5.60 4,000 3,994
11/15/99 5.58 5,000 4,989
UBS Finance, Inc.
11/5/99 5.37 75,000 74,955
11/17/99 5.00 40,000 39,913
12/7/99 5.27 75,000 74,615
12/13/99 5.00 105,000 104,406
Wells Fargo & Co.
3/2/00 6.09 25,000 24,496
Windmill Funding Corp.
11/1/99 5.34 10,044 10,044
11/1/99 5.38 16,000 16,000
11/4/99 5.34 25,000 24,989
11/9/99 5.39 3,000 2,996
11/10/99 5.39 35,000 34,953
11/10/99 5.43 10,000 9,987
11/18/99 5.40 15,000 14,962
2/9/00 6.00 3,548 3,490
2/22/00 5.98 6,000 5,890
2/28/00 6.13 10,000 9,802
3/3/00 6.13 10,000 9,795
TOTAL COMMERCIAL PAPER 5,235,926
BANK NOTES - 6.5%
Bank of America NA
2/22/00 6.03 65,000 65,000
Bank One NA, Chicago
1/24/00 6.16 (b) 55,000 54,952
Comerica Bank, Detroit
11/9/99 5.38 (b) 13,000 13,000
11/10/99 5.46 (b) 46,000 45,979
BANK NOTES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
First National Bank, Chicago
7/12/00 5.75% $ 40,000 $ 39,987
First Union National Bank,
North Carolina
11/1/99 5.45 (b) 32,000 32,000
1/4/00 6.17 (b) 50,000 50,000
1/26/00 6.22 (b) 38,000 38,000
Fleet National Bank
11/1/99 5.46 (b) 25,000 24,992
Fleet National Bank, Providence
11/4/99 5.36 (b) 38,000 38,000
Harris Trust & Savings Bank,
Chicago
11/1/99 5.60 (b) 55,000 54,983
Key Bank NA
11/16/99 5.53 (b) 54,000 54,000
Mellon Bank NA, Pittsburgh
11/1/99 5.38 (b) 24,000 23,993
NationsBank NA
11/1/99 5.40 65,000 64,987
PNC Bank NA, Pittsburgh
11/3/99 5.36 (b) 38,000 38,000
TOTAL BANK NOTES 637,873
MASTER NOTES - 0.4%
J.P. Morgan Securities, Inc.
11/5/99 5.39 (b) 35,000 35,000
MEDIUM-TERM NOTES - 5.9%
Abbey National Treasury
Services PLC
8/3/00 5.85 50,000 49,982
American Telephone & Telegraph
11/8/99 5.47 (b) 120,000 120,000
Bishops Gate Resources
Mortgage Trust
11/1/99 5.60 (b) 27,000 27,000
CIESCO LP
11/15/99 5.39 (b) 50,000 49,993
MEDIUM-TERM NOTES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
CIT Group, Inc.
11/1/99 5.45% (b) $ 40,000 $ 39,986
Ford Motor Credit Co.
11/1/99 5.45 (b) 66,000 66,000
11/23/99 5.46 (b) 80,000 79,956
General Electric Capital Corp.
11/12/99 5.39 (b) 27,000 27,000
1/12/00 6.13 (b) 24,000 24,000
Goldman Sachs Group L.P.
11/10/99 5.42 (a)(b) 29,000 29,000
1/7/00 6.33 (b)(c) 44,000 44,000
1/27/00 6.30 (b)(c) 24,000 24,000
TOTAL MEDIUM-TERM NOTES 580,917
SHORT-TERM NOTES - 3.7%
Jackson National Life
Insurance Co.
1/1/00 6.23 (b)(c) 34,000 34,000
Monumental Life Insurance Co.
11/1/99 5.54 (c) 29,000 29,000
11/1/99 5.57 (b)(c) 35,000 35,000
New York Life Insurance Co.
12/1/99 5.62 (b)(c) 25,000 25,000
12/22/99 6.20 (b)(c) 26,000 26,000
Pacific Life Insurance Co.
12/9/99 5.60 (b)(c) 35,000 35,000
RACERS Series 99 -16MM,
11/2/99 5.42 (a)(b) 46,000 46,000
SMM Trust Series 1999 E,
1/5/00 6.11 (a)(b) 18,000 18,000
SMM Trust Series 1999-I,
11/26/99 5.49 (a)(b) 20,000 20,000
Strategic Money Market Trust
Series 1999 A6,
1/13/00 6.30 (a)(b) 91,000 91,000
TOTAL SHORT-TERM NOTES 359,000
TIME DEPOSITS - 1.5%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Bank One, NA
11/1/99 5.38% $ 150,000 $ 149,993
REPURCHASE AGREEMENTS - 0.0%
MATURITY AMOUNT (000S)
In a joint trading account $ 317 317
(U.S. Government
Obligations) dated 10/29/99
due 11/1/99 At 5.33%
TOTAL INVESTMENT PORTFOLIO - 9,717,590
99.6%
NET OTHER ASSETS - 0.4% 41,088
NET ASSETS - 100% $ 9,758,678
Total Cost for Income Tax Purposes $ 9,717,590
</TABLE>
LEGEND
(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 $204,000,000 or 2.1% of net assets.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when
applicable, the final maturity date.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE COST
Goldman Sachs Group L.P.: 12/7/98 $ 44,000
6.33%, 1/7/00
6.30%, 1/27/00 1/22/99 $ 24,000
Jackson National Life 7/6/99 $ 34,000
Insurance Co. 6.23%, 1/1/00
Monumental Life Insurance 7/1/98 $ 35,000
Co.: 5.54%, 11/1/99
5.57%, 11/1/99 7/31/98 - 9/17/98 $ 29,000
New York Life Insurance Co.: 8/13/99 $ 25,000
5.62%, 12/1/99
6.20%, 12/22/99 12/21/98 $ 26,000
Pacific Life Insurance Co. 8/31/99 $ 35,000
5.60%, 12/9/99
INCOME TAX INFORMATION
At April 30, 1999, the fund had a capital loss carryforward of
approximately $2,519,000 of which $1,881,000, $476,000 and $162,000
will expire on April 30, 2002, 2003 and 2004, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) OCTOBER 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 9,717,590
value (including repurchase
agreements of $317) - See
accompanying schedule
Receivable for fund shares 31,990
sold
Interest receivable 58,374
Other receivables 8
TOTAL ASSETS 9,807,962
LIABILITIES
Payable to custodian bank $ 139
Payable for fund shares 42,873
redeemed
Distributions payable 2,440
Accrued management fee 3,686
Other payables and accrued 146
expenses
TOTAL LIABILITIES 49,284
NET ASSETS $ 9,758,678
Net Assets consist of:
Paid in capital $ 9,761,219
Accumulated undistributed net (2,541)
realized gain (loss) on
investments
NET ASSETS, for 9,760,708 $ 9,758,678
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($9,758,678
(divided by) 9,760,708
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED
OCTOBER 31, 1999
(UNAUDITED)
INTEREST INCOME $ 250,646
EXPENSES
Management fee $ 21,386
Non-interested trustees' 16
compensation
Total expenses before 21,402
reductions
Expense reductions (110) 21,292
NET INTEREST INCOME 229,354
NET REALIZED GAIN (LOSS) ON (13)
INVESTMENT SECURITIES
NET INCREASE IN NET ASSETS $ 229,341
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED OCTOBER 31, YEAR ENDED APRIL 30, 1999
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 229,354 $ 472,366
Net realized gain (loss) (13) 98
NET INCREASE (DECREASE) IN 229,341 472,464
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (229,354) (472,366)
from net interest income
Share transactions at net 3,921,935 10,977,091
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 214,993 446,239
distributions from net
interest income
Cost of shares redeemed (3,886,185) (10,778,535)
NET INCREASE (DECREASE) IN 250,743 644,795
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) 250,730 644,893
IN NET ASSETS
NET ASSETS
Beginning of period 9,507,948 8,863,055
End of period $ 9,758,678 $ 9,507,948
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED OCTOBER 31, YEARS ENDED APRIL 30,
1999
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .024 .050 .053 .051 .054 .049
Operations Net interest
income
Less Distributions
From net interest income (.024) (.050) (.053) (.051) (.054) (.049)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 2.45% 5.12% 5.43% 5.21% 5.57% 4.97%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,759 $ 9,508 $ 8,863 $ 9,300 $ 8,451 $ 7,635
(in millions)
Ratio of expenses to average .45% A .45% .45% .45% .45% .44% D
net assets
Ratio of expenses to average .45% A .45% .45% .45% .42% E .44%
net assets after expense
reductions
Ratio of net interest income 4.82% A 5.00% 5.31% 5.09% 5.45% 4.89%
to average net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999 (Unaudited)
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 require 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
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in a cross-section of other Fidelity money
market funds. Deferred amounts remain in the fund until distributed in
accordance with the Plan.
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 for U.S. Treasury or Federal Agency obligations.
2. OPERATING POLICIES -
CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). 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.
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 $252,000,000 or 2.6% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee
that is computed daily at an annualized rate of .45% of the fund's
average net assets. FMR pays all other expenses, except the
compensation of the non-interested Trustees
and certain exceptions such as interest, taxes, brokerage commissions
and extraordinary expenses. The management fee paid to FMR by the fund
is reduced by an amount equal to the fees and expenses paid by the
fund to the non-interested Trustees.
FMR also bears the cost of providing shareholder services to each
fund. To offset the cost of providing these services, FMR or its
affiliates collected certain transaction fees from shareholders which
amounted to $67,000.
SUB-ADVISER FEE. As the fund's investment sub-adviser, Fidelity
Investments Money Management, 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.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other money market funds advised by FMR or
its affiliates, has entered into insurance agreements with FIDFUNDS
Mutual Limited (FIDFUNDS), an affiliated mutual insurance company,
effective January 1, 1999. FIDFUNDS provides limited coverage for
certain loss events including issuer default as to payment of
principal or interest and bankruptcy or insolvency of a credit
enhancement provider. The insurance does not cover losses resulting
from changes in interest rates, ratings downgrades or other market
conditions. The fund may be subject to a special assessment of up to
approximately 2.5 times
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MONEY MARKET INSURANCE -
CONTINUED
the fund's annual gross premium if covered losses exceed certain
levels. During the period, FMR has borne the cost of the fund's
premium payable to FIDFUNDS.
4. EXPENSE REDUCTIONS.
Through an arrangement with the fund's custodian and transfer agent,
credits realized as a result of uninvested cash balances were used to
reduce a portion of the fund's expenses. During the period, the fund's
expenses were reduced by $110,000 under these arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FASTSM)
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
John J. Todd, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
Ned C. Lautenbach
* INDEPENDENT TRUSTEES
SPM-SANN-1299 88262
1.538241.102
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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(registered trademark) 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
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FASTSM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
U.S. GOVERNMENT
MONEY MARKET
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1999
(2_FIDELITY_LOGOS)(registered trademark)
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.
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.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE 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 1-800-544-6666
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
All major U.S. equity market indexes posted positive returns for the
month of October, led by the technology-heavy NASDAQ Index, which
climbed to a record high close during the month. Domestic bonds,
however, turned in relatively flat performance, due in large part to
lingering fears of a potential interest rate hike by the Federal
Reserve Board, and its adoption of a tightening bias during the first
week of the month.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the life of fund total return would have been
lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN US GOVERNMENT MONEY 2.40% 4.80% 29.14% 62.06%
MARKET
Government Retail Money 2.20% 4.36% 26.83% n/a
Market Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on February 5, 1990. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. To measure how the
fund's performance stacked up against its peers, you can compare it to
the government retail money market funds average, which reflects the
performance of government retail money market funds with similar
objectives tracked by IBC Financial Data, Inc. The past six months
average represents a peer group of 216 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, 1999 PAST 1 YEAR PAST 5 YEARS LIFE OF FUND
SPARTAN US GOVERNMENT MONEY 4.80% 5.25% 5.08%
MARKET
Government Retail Money 4.36% 4.86% n/a
Market Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
11/2/99 8/3/99 4/27/99 2/2/99 11/3/98
Spartan U.S. Government Money 5.04% 4.67% 4.51% 4.67% 4.91%
Market Fund
Government Retail Money 4.57% 4.31% 4.09% 4.20% 4.49%
Market Funds Average
11/3/99 7/28/99 4/28/99 2/3/99 10/28/98
MMDA 2.07% 2.04% 2.10% 2.21% 2.45%
Spartan U.S.
Government Money
Market Fund
Government Retail
Money Market
Funds Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 5.04
Row: 1, Col: 2, Value: 4.57
Row: 1, Col: 3, Value: 2.07
Row: 2, Col: 1, Value: 4.67
Row: 2, Col: 2, Value: 4.31
Row: 2, Col: 3, Value: 2.04
Row: 3, Col: 1, Value: 4.51
Row: 3, Col: 2, Value: 4.09
Row: 3, Col: 3, Value: 2.1
Row: 4, Col: 1, Value: 4.67
Row: 4, Col: 2, Value: 4.2
Row: 4, Col: 3, Value: 2.21
Row: 5, Col: 1, Value: 4.91
Row: 5, Col: 2, Value: 4.49
Row: 5, Col: 3, Value: 2.45
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the
government retail money market funds average and the bank money market
deposit account (MMDA) average. Figures for the government retail
money market funds average are from IBC Financial Data, Inc. The MMDA
average is supplied by BANK RATE MONITOR(trademark).
(checkmark)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.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Robert Litterst)
An interview with Robert Litterst, Portfolio Manager of Spartan U.S.
Government Money Market Fund
Q. BOB, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE SIX MONTHS
THAT ENDED OCTOBER 31, 1999?
A. It was dominated by concerns that the strong U.S. economy, coupled
with reviving economies abroad, would lead the Federal Reserve Board
to take back all three of the short-term interest-rate cuts it had
implemented in late 1998 to maintain global financial stability.
Growth in real GDP - gross domestic product adjusted for inflation -
continued above the rate that is considered inflationary, driven
primarily by consumer spending and business investment. However, broad
inflation measures remained relatively tame. An exception arose in
May, when data from April showed an unexpected leap in the consumer
price index (CPI), its largest one-month gain in nine years. That
report sparked concerns in the market, and led to a switch by the Fed
in May from a neutral stance concerning interest rates to a bias
toward "tightening," or raising rates, to head off inflation. Those
fears were confirmed in June, when the Fed raised the rate banks
charge each other for overnight loans - known as the fed funds target
rate - from 4.75% to 5.00%. At that time, the Fed switched back to a
neutral stance, but raised the fed funds rate again to 5.25% in
August. In October, the Fed once again assumed a tightening bias,
leading market observers to believe it would soon take back the last
of 1998's interest-rate cuts.
Q. WHAT WAS YOUR STRATEGY WITH
THE FUND?
A. Overall, I kept the fund's average maturity longer than the average
of its peers, ranging from about 60 days up to a high in the
low-80-day range. Admittedly, it's unusual to carry a consistently
longer maturity in a rising interest-rate environment, when one would
normally maintain a shorter maturity to enable the fund to invest in
higher yields quickly. However, shorter-term securities traded at a
premium and, periodically, I purchased securities with six- to
12-month maturities when the market priced in very aggressive Fed
rate-hike expectations. The fund was able to find opportunities in
agency securities. One such opportunity was in variable- and
floating-rate securities, whose interest rates reset based on indexes
such as the prime rate or the three-month LIBOR (London Interbank
Offered Rate). There were two reasons for emphasizing these
instruments. First, dealers were offering them at attractive prices.
More importantly, though, they enabled the fund to capture terrific
values available in certain sectors of the money market more fully
than if I solely utilized fixed-rate government securities. Further,
with year 2000 approaching, I started to focus on strategies to earn
the highest yield possible over year-end, while ensuring that the fund
maintains ample liquidity to deal with a variety of potential
outcomes.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on October 31, 1999, was 5.04%, compared
to 4.51% six months ago. For the six months that ended October 31,
1999, the fund had a total return of 2.40%, compared to 2.20% for the
government retail money market funds average, according to IBC
Financial Data, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. There are clear signs that the downward trend in inflation we've
experienced for some time is reversing. The dollar has weakened
relative to the yen, and we've seen an up-tick in commodity prices. If
factors such as these no longer help subdue inflation amid an economy
that continues to grow at a robust pace, then there is a greater risk
of rising price pressures, which could elicit further action by the
Fed. Many investors thought the Fed would hold off on raising rates in
November and December because of the proximity to the year 2000.
However, that sentiment has diminished because moves the Fed has made
to maintain liquidity should enable it to make policy decisions
independent of Y2K considerations. Looking ahead to next year, the
fund will seek to take advantage of increased issuance and additional
liquidity of U.S. government agency securities. At the same time, the
supply of short-term Treasuries will likely decline. In addition, I
expect to continue buying longer-term securities when the risk/return
trade-off is favorable to the fund.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks high current
income with share price
stability by investing in
high-quality short-term
money market securities issued
by the U.S. government for
government agencies and
repurchase agreements
FUND NUMBER: 458
TRADING SYMBOL: SPAXX
START DATE: February 5, 1990
SIZE: as of October 31, 1999,
more than $831 million
MANAGER: Robert Litterst,
since 1997; manager, several
Fidelity and Spartan taxable
money market funds; joined
Fidelity in 1991
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99 % OF FUND'S INVESTMENTS
10/31/99 10/31/98
0 - 30 49.3 37.8 56.1
31 - 90 17.9 34.0 15.5
91 - 180 18.4 20.0 19.1
181 - 397 14.4 8.2 9.3
WEIGHTED AVERAGE MATURITY
10/31/99 4/30/99 10/31/98
Spartan U.S. Government Money 72 DAYS 68 Days 62 Days
Market
Government Retail Money 54 DAYS 58 Days 54 Days
Market Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF OCTOBER 31, 1999 AS OF APRIL 30, 1999
Federal Agency Issues 77.2% Federal Agency Issues 92.1%
Repurchase Agreements and Repurchase Agreements and
Net Other Assets 22.8% Net Other Assets 7.9%
Row: 1, Col: 1, Value: 77.2 Row: 1, Col: 1, Value: 92.09999999999999
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 24.3 Row: 1, Col: 4, Value: 10.1
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.0 Row: 1, Col: 8, Value: 0.0
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS OCTOBER 31, 1999 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FEDERAL AGENCIES - 77.2%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
FANNIE MAE - 24.2%
Agency Coupons - 18.7%
11/1/99 5.37% (b) $ 13,000,000 $ 12,994,992
11/2/99 5.22 (b) 10,000,000 9,994,928
11/4/99 5.18 (b) 18,000,000 17,991,826
11/10/99 5.23 (b) 15,000,000 14,995,303
11/24/99 5.22 (b) 17,000,000 16,995,351
1/14/00 5.97 (b) 32,000,000 31,985,451
2/4/00 4.85 7,000,000 6,997,905
2/22/00 4.93 7,000,000 6,999,783
5/5/00 5.04 7,000,000 6,995,696
6/7/00 5.25 12,000,000 11,992,532
6/9/00 5.38 7,000,000 6,994,336
9/25/00 5.82 5,000,000 4,964,879
10/2/00 5.83 6,000,000 5,990,755
155,893,737
Discount Notes - 5.5%
12/6/99 5.29 4,900,000 4,874,990
2/2/00 5.69 12,650,000 12,467,323
2/11/00 5.63 8,000,000 7,876,013
3/16/00 5.68 12,920,000 12,650,331
7/28/00 5.73 8,000,000 7,674,800
45,543,457
201,437,194
FEDERAL HOME LOAN BANK - 38.4%
Agency Coupons - 31.5%
11/1/99 5.31 (b) 8,000,000 7,999,880
11/1/99 5.23 (b) 16,000,000 15,999,978
11/1/99 5.38 (b) 19,000,000 18,987,789
11/3/99 5.68 (b) 8,000,000 7,994,689
11/4/99 5.26 (b) 15,000,000 14,989,063
11/12/99 5.22 (b) 7,000,000 6,996,862
12/1/99 5.30 (b) 40,000,000 39,997,582
1/4/00 5.92 (b) 32,000,000 31,979,677
1/11/00 5.98 (b) 15,000,000 14,997,987
1/17/00 5.99 (b) 15,000,000 14,988,707
2/11/00 4.92 7,000,000 6,998,298
FEDERAL AGENCIES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
FEDERAL HOME LOAN BANK -
CONTINUED
Agency Coupons - continued
2/16/00 4.90% $ 7,000,000 $ 7,000,000
3/1/00 5.00 14,000,000 13,998,912
3/3/00 5.06 7,000,000 6,998,071
3/8/00 5.17 10,000,000 9,996,713
4/5/00 5.03 5,000,000 4,997,741
5/19/00 5.13 15,000,000 14,994,631
6/14/00 5.47 4,000,000 3,996,690
8/17/00 5.86 7,000,000 6,976,989
11/3/00 6.00 (a) 8,000,000 7,996,000
11/3/00 6.12 3,000,000 2,998,050
261,884,309
Discount Notes - 6.9%
11/3/99 5.31 16,000,000 15,995,324
2/23/00 5.66 16,000,000 15,720,573
3/2/00 5.71 9,000,000 8,829,505
3/8/00 5.68 5,000,000 4,901,849
3/29/00 5.70 12,000,000 11,724,350
57,171,601
319,055,910
FREDDIE MAC - 12.5%
Discount Notes - 12.5%
11/10/99 5.28 26,369,000 26,334,457
11/18/99 4.88 8,175,000 8,156,624
12/1/99 5.30 12,490,000 12,435,252
3/3/00 5.72 18,000,000 17,658,060
6/2/00 5.40 10,000,000 9,695,644
6/2/00 5.46 7,000,000 6,784,454
6/13/00 5.51 6,000,000 5,804,250
6/15/00 5.45 6,000,000 5,804,591
6/23/00 5.50 7,000,000 6,761,018
7/5/00 5.61 5,000,000 4,817,494
104,251,844
STUDENT LOAN MARKETING
ASSOCIATION - 2.1%
Agency Coupons - 2.1%
11/2/99 5.80 (b) 4,000,000 3,998,492
FEDERAL AGENCIES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
STUDENT LOAN MARKETING
ASSOCIATION - CONTINUED
Agency Coupons - continued
11/2/99 5.85% (b) $ 8,000,000 $ 7,997,298
11/2/99 5.49 (b) 5,000,000 4,999,239
16,995,029
TOTAL FEDERAL AGENCIES 641,739,977
</TABLE>
REPURCHASE AGREEMENTS - 24.3%
MATURITY AMOUNT
In a joint trading account
(U.S. Government
Obligations) dated:
10/1/99 due 11/1/99 At 5.31% $ 28,128,030 28,000,000
10/7/99 due 11/3/99 At 5.3% 42,167,085 42,000,000
10/14/99 due 11/15/99 At 5.32% 25,118,222 25,000,000
10/21/99 due 11/18/99 At 5.31% 13,053,690 13,000,000
10/26/99 due 11/2/99 At 5.25% 28,028,583 28,000,000
10/27/99 due 11/10/99 At 5.25% 18,036,750 18,000,000
10/28/99 due 11/2/99 At 5.33% 12,008,883 12,000,000
10/29/99 due 11/1/99 At 5.33% 36,665,280 36,649,000
TOTAL REPURCHASE AGREEMENTS 202,649,000
TOTAL INVESTMENT PORTFOLIO - 844,388,977
101.5%
NET OTHER ASSETS - (1.5)% (12,881,641)
NET ASSETS - 100% $ 831,507,336
Total Cost for Income Tax Purposes $ 844,388,977
LEGEND
(a) Security purchased on a delayed delivery or when-issued basis.
(b) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when
applicable, the final maturity date.
INCOME TAX INFORMATION
At April 30, 1999, the fund had a capital loss carryforward of
approximately $134,000 of which $44,000, $53,000 and $37,000 will
expire on April 30, 2002, 2003 and 2004, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 844,388,977
value (including repurchase
agreements of $202,649,000)
- - See accompanying schedule
Cash 525
Receivable for fund shares 2,804,923
sold
Interest receivable 4,055,574
TOTAL ASSETS 851,249,999
LIABILITIES
Payable for investments $ 2,998,050
purchased Regular delivery
Delayed delivery 7,996,000
Payable for fund shares 8,244,261
redeemed
Distributions payable 172,097
Accrued management fee 320,692
Other payables and accrued 11,563
expenses
TOTAL LIABILITIES 19,742,663
NET ASSETS $ 831,507,336
Net Assets consist of:
Paid in capital $ 831,649,326
Accumulated net realized gain (141,990)
(loss) on investments
NET ASSETS, for 831,649,326 $ 831,507,336
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($831,507,336
(divided by) 831,649,326
shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31,
1999 (UNAUDITED)
INTEREST INCOME $ 21,879,526
EXPENSES
Management fee $ 1,906,306
Non-interested trustees' 1,402
compensation
Total expenses before 1,907,708
reductions
Expense reductions (2,353) 1,905,355
NET INTEREST INCOME 19,974,171
NET REALIZED GAIN (LOSS) ON (4,801)
INVESTMENTS
NET INCREASE IN NET ASSETS $ 19,969,370
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED OCTOBER 31, YEAR ENDED APRIL 30, 1999
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 19,974,171 $ 40,713,930
Net realized gain (loss) (4,801) 14,978
NET INCREASE (DECREASE) IN 19,969,370 40,728,908
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (19,974,171) (40,713,930)
from net interest income
Share transactions at net 281,073,522 839,208,314
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 19,029,912 38,482,527
distributions from net
interest income
Cost of shares redeemed (315,924,560) (803,544,196)
NET INCREASE (DECREASE) IN (15,821,126) 74,146,645
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (15,825,927) 74,161,623
IN NET ASSETS
NET ASSETS
Beginning of period 847,333,263 773,171,640
End of period $ 831,507,336 $ 847,333,263
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED OCTOBER 31, YEARS ENDED APRIL 30,
1999
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .024 .049 .052 .050 .054 .047
Operations Net interest
income
Less Distributions
From net interest income (.024) (.049) (.052) (.050) (.054) (.047)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B, C 2.40% 5.02% 5.37% 5.16% 5.52% 4.79%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 831,507 $ 847,333 $ 773,172 $ 815,751 $ 761,475 $ 707,194
(000 omitted)
Ratio of expenses to average .45% A .45% .45% .45% .45% .45%
net assets
Ratio of expenses to average .45% A .44% D .45% .45% .41% D .45%
net assets after expense
reductions
Ratio of net interest income 4.71% A 4.90% 5.24% 5.02% 5.42% 4.67%
to average net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999 (Unaudited)
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 require
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
among 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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). 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.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place after the
customary settlement period for that security. The price of the
underlying
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED TRANSACTIONS -
CONTINUED
securities is fixed at the time the transaction is negotiated. The
values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
records with a value at least equal to the amount of the commitment.
Losses may arise due to changes in the market value of the underlying
securities, if the counterparty does not perform under the contract,
or if the issuer does not issue the securities due to political,
economic, or other factors.
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 investments in
repurchase agreements through the joint trading account are summarized
as follows:
<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF JOINT TRADING
DATED OCTOBER 1, 1999, DUE NOVEMBER 1, 1999 AT 5.31%
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 $ 251,143,125
Aggregate market value of transferred assets $ 256,532,869
Coupon rates of transferred assets 5.50% to 10.50%
Maturity dates of transferred assets 2/1/00 to 11/1/29
DATED OCTOBER 7, 1999, DUE NOVEMBER 3, 1999 AT 5.30%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 350,000,000
Aggregate maturity amount of agreements $ 351,392,375
Aggregate market value of transferred assets $ 359,043,541
Coupon rates of transferred assets 5.00% to 15.00%
Maturity dates of transferred assets 11/1/99 to 11/1/29
</TABLE>
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
<TABLE>
<CAPTION>
<S> <C>
DATED OCTOBER 14, 1999, DUE NOVEMBER 15, 1999 AT 5.32%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 200,000,000
Aggregate maturity amount of agreements $ 200,945,778
Aggregate market value of transferred assets $ 205,021,253
Coupon rates of transferred assets 0.00% to 13.25%
Maturity dates of transferred assets 11/1/99 to 2/1/35
DATED OCTOBER 21,1999, DUE NOVEMBER 18, 1999 AT 5.31%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 100,000,000
Aggregate maturity amount of agreements $ 100,413,000
Aggregate market value of transferred assets $ 103,022,866
Coupon rates of transferred assets 5.50% to 10.50%
Maturity dates of transferred assets 7/1/02 to 11/1/29
DATED OCTOBER 26, 1999, DUE NOVEMBER 2, 1999 AT 5.25%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 500,000,000
Aggregate maturity amount of agreements $ 500,510,417
Aggregate market value of transferred assets $ 517,114,417
Coupon rates of transferred assets 0.00% to 14.25%
Maturity dates of transferred assets 11/15/99 to 8/15/29
DATED OCTOBER 27, 1999, DUE NOVEMBER 10, 1999 AT 5.25%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 300,000,000
Aggregate maturity amount of agreements $ 300,612,500
Aggregate market value of transferred assets $ 306,000,000
Coupon rates of transferred assets 5.73% to 7.34%
Maturity dates of transferred assets 12/1/02 to 11/1/37
</TABLE>
3. JOINT TRADING ACCOUNT - CONTINUED
SUMMARY OF JOINT TRADING - CONTINUED
<TABLE>
<CAPTION>
<S> <C>
DATED OCTOBER 28, 1999, DUE NOVEMBER 2, 1999 AT 5.33%
Number of dealers or banks 1
Maximum amount with one dealer or bank 100%
Aggregate principal amount of agreements $ 200,000,000
Aggregate maturity amount of agreements $ 200,148,056
Aggregate market value of transferred assets $ 204,220,863
Coupon rates of transferred assets 5.75% to 7.41%
Maturity dates of transferred assets 10/1/18 to 12/1/37
DATED OCTOBER 29, 1999, DUE NOVEMBER 1, 1999 AT 5.33%
Number of dealers or banks 5
Maximum amount with one dealer or bank 21.9%
Aggregate principal amount of agreements $ 1,143,624,000
Aggregate maturity amount of agreements $ 1,144,132,004
Aggregate market value of transferred assets $ 1,168,001,858
Coupon rates of transferred assets 0.00% to 13.00%
Maturity dates of transferred assets 10/15/00 to 10/1/38
</TABLE>
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee
that is computed daily at an annualized rate of .45% of the fund's
average net assets. FMR pays all other expenses, except the
compensation of the non-interested Trustees and certain exceptions
such as interest, taxes, brokerage commissions and extraordinary
expenses. The management fee paid to FMR by the fund is reduced by an
amount equal to the fees and expenses paid by the fund to the
non-interested Trustees.
FMR also bears the cost of providing shareholder services to each
fund. To offset the cost of providing these services, FMR or its
affiliates collected certain transaction fees from shareholders which
amounted to $5,175.
SUB-ADVISER FEE. As the fund's investment sub-adviser, Fidelity
Investments Money Management, 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.
MONEY MARKET INSURANCE. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other money market funds advised by FMR or
its affiliates, has entered into insurance agreements with FIDFUNDS
Mutual Limited (FIDFUNDS),
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MONEY MARKET INSURANCE - CONTINUED
an affiliated mutual insurance company, effective January 1, 1999.
FIDFUNDS provides limited coverage for certain loss events including
issuer default as to payment of principal or interest and bankruptcy
or insolvency of a credit enhancement provider. The insurance does not
cover losses resulting from changes in interest rates, ratings
downgrades or other market conditions. The fund may be subject to a
special assessment of up to approximately 2.5 times the fund's annual
gross premium if covered losses exceed certain levels. During the
period, FMR has borne the cost of the fund's premium payable to
FIDFUNDS.
5. EXPENSE REDUCTIONS.
Through an arrangement with the fund's transfer agent, credits
realized as a result of uninvested cash balances were used to reduce a
portion of the fund's expenses. During the period, the fund's transfer
agent fees were reduced by $2,353 under this arrangement.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FASTSM)
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
Robert A. Litterst, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
Ned C. Lautenbach
* INDEPENDENT TRUSTEES
SPU-SANN-1299 88264
1.538283.102
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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(registered trademark) 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
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FASTSM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
SPARTAN(REGISTERED TRADEMARK)
U.S. TREASURY
MONEY MARKET
FUND
SEMIANNUAL REPORT
OCTOBER 31, 1999
(2_FIDELITY_LOGOS)(registered trademark)
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.
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.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE 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 1-800-544-6666
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND
MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
All major U.S. equity market indexes posted positive returns for the
month of October, led by the technology-heavy NASDAQ Index, which
climbed to a record high close during the month. Domestic bonds,
however, turned in relatively flat performance, due in large part to
lingering fears of a potential interest rate hike by the Federal
Reserve Board, and its adoption of a tightening bias during the first
week of the month.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. You should also keep money you'll need in the near future in a
more stable investment.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our
web site at www.fidelity.com. We are available 24 hours a day, seven
days a week to provide you the information you need to make the
investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income. Yield measures the income paid by a fund. Since a
money market fund tries to maintain a $1 share price, yield is an
important measure of performance. If Fidelity had not reimbursed
certain fund expenses, the past five year and past 10 year total
returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED OCTOBER 31, PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1999
SPARTAN US TREASURY MONEY 2.21% 4.42% 27.37% 61.89%
MARKET
Treasury Retail Money Market 2.09% 4.14% 26.07% 58.74%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. To measure how the fund's performance stacked up
against its peers, you can compare it to the treasury retail money
market funds average, which reflects the performance of treasury
retail money market funds with similar objectives tracked by IBC
Financial Data, Inc. The past six months average represents a peer
group of 37 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED OCTOBER 31, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1999
SPARTAN US TREASURY MONEY 4.42% 4.96% 4.94%
MARKET
Treasury Retail Money Market 4.14% 4.74% 4.73%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
11/2/99 8/3/99 4/27/99 2/2/99 11/3/98
Spartan U.S. Treasury Money 4.56% 4.40% 4.25% 4.32% 4.60%
Market Fund
Treasury Retail Money Market 4.29% 4.08% 3.94% 3.97% 4.16%
Funds Average
11/3/99 7/28/99 4/28/99 2/3/99 10/28/98
MMDA 2.07% 2.04% 2.10% 2.21% 2.45%
Spartan U.S. Treasury
Money Market Fund
Treasury Retail
Money Market
Funds Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 4.56
Row: 1, Col: 2, Value: 4.29
Row: 1, Col: 3, Value: 2.07
Row: 2, Col: 1, Value: 4.4
Row: 2, Col: 2, Value: 4.08
Row: 2, Col: 3, Value: 2.04
Row: 3, Col: 1, Value: 4.25
Row: 3, Col: 2, Value: 3.94
Row: 3, Col: 3, Value: 2.1
Row: 4, Col: 1, Value: 4.319999999999999
Row: 4, Col: 2, Value: 3.97
Row: 4, Col: 3, Value: 2.21
Row: 5, Col: 1, Value: 4.6
Row: 5, Col: 2, Value: 4.159999999999999
Row: 5, Col: 3, Value: 2.45
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
table above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the
treasury retail money market funds average and the bank money market
deposit account (MMDA) average. Figures for the treasury retail money
market funds average are from IBC Financial Data, Inc. The MMDA
average is supplied by BANK RATE MONITOR(trademark).
(checkmark)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.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT
PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Robert Litterst)
An interview with Robert Litterst, Portfolio Manager of Spartan U.S.
Treasury Money Market Fund
Q. BOB, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE SIX MONTHS
THAT ENDED OCTOBER 31, 1999?
A. It was dominated by concerns that the strong U.S. economy would
lead the Federal Reserve Board to take back all three of the
short-term interest-rate cuts it had implemented in late 1998 to
maintain global financial stability. Growth in real GDP - gross
domestic product adjusted for inflation - continued above the rate
that is considered inflationary, driven primarily by consumer spending
and business investment. However, broad inflation measures remained
relatively tame. An exception arose in May, when data from April
showed an unexpected leap in the consumer price index (CPI), its
largest one-month gain in nine years. That report sparked concerns in
the market, and led to a switch by the Fed in May from a neutral
stance concerning interest rates to a bias toward "tightening," or
raising rates, to head off inflation. Those fears were realized in
June, when the Fed raised the rate banks charge each other for
overnight loans - known as the fed funds target rate - from 4.75% to
5.00%. At that time, the Fed switched back to a neutral stance, but
raised the fed funds rate again to 5.25% in August. In October, the
Fed left the fed funds rate unchanged, but once again adopted a
tightening bias, leading market observers to believe it would soon
take back the last of 1998's interest-rate cuts. The market also was
impacted during the period by changing expectations regarding the Year
2000 and the supply of Treasury securities, as the federal government
continued to post large budget surpluses.
Q. WHAT EFFECT DID THIS BACKDROP HAVE ON THE TREASURY MONEY MARKET?
A. It increased the volatility that has persisted since late 1998,
despite the reconciliation of the issues that erupted at that time
concerning a global financial meltdown. In addition, concerns related
to the availability of Treasury securities at the turn of the year
2000 added to volatility. However, the Fed and the U.S. Treasury have
announced programs to maintain liquidity and supply, helping to calm
the markets.
Q. WHAT WAS YOUR STRATEGY?
A. I kept the fund's average maturity consistently longer than that of
its peers. While that may appear to be unusual in a period of rising
rates - when one would normally maintain a shorter maturity to enable
the fund to invest in higher yields quickly - this strategy was partly
in response to a supply/demand imbalance that routinely causes
very-short-maturity Treasuries to trade at very high prices. In
addition, I purchased securities with six- to 12-month maturities at
times when the market priced in a very aggressive Fed rate-hike
policy. Further, with year-end approaching, I started to focus on
locking in investments into the new year in order to ensure that the
fund is fully invested at reasonable levels. We also are preparing for
the possibility of strong inflows as we near 2000, because investors
could seek the safe haven offered by short-term Treasury securities.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on October 31, 1999, was 4.56%, compared
to 4.25% six months ago. For the six months that ended October 31,
1999, the fund had a total return of 2.21%, compared to 2.09% for the
treasury retail money market funds average, according to IBC Financial
Data, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. There are clear signs that the downward trend in inflation we've
experienced for some time is reversing. The dollar has weakened
relative to the yen, and we've seen an up-tick in commodity prices. If
factors such as these no longer help subdue inflation amid an economy
that continues to grow at a robust pace, then there is greater risk of
rising price pressures, which could elicit further action by the Fed.
Many investors thought the Fed would hold off on raising rates in
November and December because of the proximity to the Year 2000.
However, that sentiment has diminished because of moves the Fed has
made to maintain liquidity. Looking ahead to next year, the fund's
challenge will be to provide value to shareholders in an environment
characterized by an uncertain interest-rate outlook and a declining
supply of Treasury securities, as the Federal government will continue
to enjoy a budget surplus.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks high current
income with share price
stability by investing in
U.S. Treasury money market
securities whose interest is free
from state and local taxes
FUND NUMBER: 415
TRADING SYMBOL: FDLXX
START DATE: January 5, 1988
SIZE: as of October 31, 1999,
more than $2.0 billion
MANAGER: Robert Litterst,
since 1997; manager,
several Fidelity and Spartan
taxable money market funds;
joined Fidelity in 1991
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99 % OF FUND'S INVESTMENTS
10/31/99 10/31/98
0 - 30 33.5 10.4 24.4
31 - 90 11.7 47.0 23.2
91 - 180 50.8 39.5 47.6
181 - 397 4.0 3.1 4.8
WEIGHTED AVERAGE MATURITY
10/31/99 4/30/99 10/31/98
Spartan U.S. Treasury Money 72 DAYS 78 Days 74 Days
Market Fund
Treasury Retail Money Market 66 DAYS 71 Days 74 Days
Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF OCTOBER 31, 1999 AS OF APRIL 30, 1999
U.S. Treasury Bills 12.5% U.S. Treasury Bills 1.4%
U.S. Treasury Notes 85.1% U.S. Treasury Notes 97.1%
Net Other Assets 2.4% Net Other Assets 1.5%
Row: 1, Col: 1, Value: 12.5 Row: 1, Col: 1, Value: 1.4
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 85.09999999999999 Row: 1, Col: 4, Value: 97.09999999999999
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 2.4 Row: 1, Col: 8, Value: 1.5
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS OCTOBER 31, 1999 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -
97.6%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
U.S. TREASURY BILLS - 12.5%
11/12/99 4.87% $ 23,435 $ 23,401
1/6/00 4.98 76,689 75,996
2/3/00 5.02 160,000 157,925
257,322
U.S. TREASURY NOTES - 75.6%
11/15/99 4.70 126,315 126,361
11/15/99 4.73 90,000 90,032
11/15/99 4.76 39,044 39,058
11/15/99 4.80 60,000 60,020
11/30/99 4.92 50,000 50,105
11/30/99 4.93 75,000 75,157
11/30/99 4.95 16,000 16,033
11/30/99 4.98 30,000 30,061
11/30/99 5.00 20,000 20,041
12/31/99 4.96 55,000 55,228
12/31/99 5.10 70,000 70,282
12/31/99 5.11 34,000 34,134
1/31/00 5.00 25,000 25,159
1/31/00 5.04 4,504 4,532
1/31/00 5.07 25,000 25,152
1/31/00 5.14 30,000 30,178
2/15/00 5.11 34,000 34,308
2/15/00 5.13 30,000 30,049
2/29/00 4.86 743 748
2/29/00 4.90 20,000 20,129
2/29/00 5.07 15,000 15,089
2/29/00 5.11 100,000 100,617
2/29/00 5.12 75,000 75,450
2/29/00 5.13 80,000 80,372
2/29/00 5.15 30,000 30,181
2/29/00 5.16 60,000 60,047
2/29/00 5.17 50,000 50,169
2/29/00 5.19 130,000 130,406
2/29/00 5.22 50,000 50,038
3/31/00 5.09 10,000 10,064
3/31/00 5.13 10,000 10,062
3/31/00 5.19 31,167 31,255
3/31/00 5.28 20,000 20,126
U.S. TREASURY OBLIGATIONS -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
U.S. TREASURY NOTES - CONTINUED
4/30/00 5.33% (a) $ 25,000 $ 25,025
5/31/00 5.12 30,000 30,157
1,555,825
U.S. TREASURY NOTES - COUPON
STRIPS - 2.6%
11/15/99 4.80 30,000 29,940
5/15/00 5.24 25,000 24,316
54,256
U.S. TREASURY NOTES -
PRINCIPAL ONLY STRIPS - 6.9%
11/15/99 4.70 40,000 39,926
11/15/99 4.72 47,000 46,912
11/15/99 4.91 25,000 24,952
2/15/00 4.77 15,000 14,796
2/15/00 4.80 15,000 14,795
141,381
TOTAL INVESTMENT PORTFOLIO - 2,008,784
97.6%
NET OTHER ASSETS - 2.4% 49,917
NET ASSETS - 100% $ 2,058,701
Total Cost for Income Tax Purposes $ 2,008,784
</TABLE>
LEGEND
(a) Security purchased on a delayed delivery or when-issued basis.
INCOME TAX INFORMATION
At April 30, 1999, the fund had a capital loss carryforward of
approximately $32,000, all of which will expire on April 30, 2004.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) OCTOBER 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,008,784
value - See accompanying
schedule
Receivable for investments 451,396
sold
Receivable for fund shares 13,313
sold
Interest receivable 39,686
TOTAL ASSETS 2,513,179
LIABILITIES
Payable for investments $ 421,217
purchased Regular delivery
Delayed delivery 25,029
Payable for fund shares 6,998
redeemed
Distributions payable 432
Accrued management fee 780
Other payables and accrued 22
expenses
TOTAL LIABILITIES 454,478
NET ASSETS $ 2,058,701
Net Assets consist of:
Paid in capital $ 2,058,796
Accumulated net realized gain (95)
(loss) on investments
NET ASSETS, for 2,058,665 $ 2,058,701
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($2,058,701
(divided by) 2,058,665
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED OCTOBER 31,
1999 (UNAUDITED)
INTEREST INCOME $ 49,632
EXPENSES
Management fee $ 4,648
Non-interested trustees' 3
compensation
Interest 16
Total expenses before 4,667
reductions
Expense reductions (23) 4,644
NET INTEREST INCOME 44,988
NET INCREASE IN NET ASSETS $ 44,988
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED OCTOBER 31, YEAR ENDED APRIL 30, 1999
1999 (UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 44,988 $ 93,866
Net realized gain (loss) - (23)
NET INCREASE (DECREASE) IN 44,988 93,843
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (44,988) (93,866)
from net interest income
Share transactions at net 693,149 2,111,263
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 42,168 88,470
distributions from net
interest income
Cost of shares redeemed (766,350) (2,022,494)
NET INCREASE (DECREASE) IN (31,033) 177,239
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (31,033) 177,216
IN NET ASSETS
NET ASSETS
Beginning of period 2,089,734 1,912,518
End of period $ 2,058,701 $ 2,089,734
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS SIX MONTHS ENDED OCTOBER 31, YEARS ENDED APRIL 30,
1999
(UNAUDITED) 1999 1998 1997 1996 1995 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Income from Investment .022 .046 .050 .048 .051 .036
Operations Net interest
income
Less Distributions
From net interest income (.022) (.046) (.050) (.048) (.051) (.036)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B, C 2.21% 4.67% 5.08% 4.92% 5.25% 3.66%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,059 $ 2,090 $ 1,913 $ 1,911 $ 1,795 $ 1,678
millions)
Ratio of expenses to average .45% A .47% .46% .45% .45% .45% A, D
net assets
Ratio of expenses to average .45% A, E .46% E .46% .45% .43% E .45% A
net assets after expense
reductions
Ratio of net interest income 4.35% A 4.57% 4.96% 4.82% 5.14% 4.85% A
to average net assets
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS YEARS ENDED APRIL 30,
1994 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 1.000
period
Income from Investment .030
Operations Net interest
income
Less Distributions
From net interest income (.030)
Net asset value, end of period $ 1.000
TOTAL RETURN B, C 2.99%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,556
millions)
Ratio of expenses to average .45% D
net assets
Ratio of expenses to average .45%
net assets after expense
reductions
Ratio of net interest income 2.94%
to average net assets
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
F NINE MONTHS ENDED APRIL 30
G YEAR ENDED JULY 31
NOTES TO FINANCIAL STATEMENTS
For the period ended October 31, 1999 (Unaudited)
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 require
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
among 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.
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. The average daily
balance during the period for which the reverse repurchase agreements
were outstanding amounted to $99,848,000. The weighted average
interest rate was 2.88%.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place after the customary settlement period for that security. The
price of the underlying securities and the date when the securities
will be delivered and paid for are fixed at the time the transaction
is negotiated. The value of the securities purchased on a delayed
delivery basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a delayed delivery security. With respect to purchase
commitments, the fund identifies securities as segregated
2. OPERATING POLICIES -
CONTINUED
DELAYED DELIVERY TRANSACTIONS -
CONTINUED
in its records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management
& Research Company (FMR) receives a fee that is computed daily at an
annualized rate of .45% of the fund's average net assets. FMR pays all
other expenses, except the compensation of the non-interested Trustees
and certain exceptions such as interest, taxes, brokerage commissions
and extraordinary expenses. The management fee paid to FMR by the fund
is reduced by an amount equal to the fees and expenses paid by the
fund to the non-interested Trustees.
FMR also bears the cost of providing shareholder services to each
fund. To offset the cost of providing these services, FMR or its
affiliates collected certain transaction fees from shareholders which
amounted to $11,000.
SUB-ADVISER FEE. As the fund's investment sub-adviser, Fidelity
Investments Money Management, 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.
Through an arrangement with the fund's custodian and transfer agent,
credits realized as a result of uninvested cash balances were used to
reduce a portion of the fund's expenses. During the period, the fund's
expenses were reduced by $23,000 under these arrangements.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity Automated Service Telephone provides a single toll-free
number to access account balances, positions, quotes and trading. It's
easy to navigate the service, and on your first call, the system will
help you create a personal identification number (PIN) for security.
(PHONE_GRAPHIC)FIDELITY AUTOMATED
SERVICE TELEPHONE (FASTSM)
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
1-800-288-2967, and be sure to ask for registration number SMD004 to
receive a special Fidelity package that includes 30 days of free
Internet access. EarthLink is North America's #1 independent Internet
access provider.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+(registered trademark)
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-0240 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
48 West Putnam Avenue
Greenwich, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
GEORGIA
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
ILLINOIS
One North Franklin Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Investments
Money Management, Inc.
Merrimack, NH
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Boyce I. Greer, Vice President
Fred L. Henning, Jr., Vice President
Robert A. Litterst, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Stanley N. Griffith, Assistant Vice President
John H. Costello, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
Ned C. Lautenbach
* INDEPENDENT TRUSTEES
TMM-SANN-1299 88265
1.538317.102
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
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(registered trademark) 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
Exchanges/Redemptions 1-800-544-6666
Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FASTSM) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
