SPARTAN(REGISTERED TRADEMARK)
MONEY MARKET
FUND
ANNUAL REPORT
APRIL 30, 2000
(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 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 23 Notes to the financial
statements.
REPORT OF INDEPENDENT 26 The auditors' opinion.
ACCOUNTANTS
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:
New indicators of accelerating inflation led to a sharp downturn in
equity markets, as the Dow Jones Industrial Average, NASDAQ and S&P
500(Registered trademark) each suffered its worst single-session point
decline in history on April 14. Volatility ruled the remainder of the
month, with equity markets experiencing both strong rallies and broad
sell-offs. Inflation-sensitive Treasuries experienced similar
volatility, as prices for the bellwether 10-year note edged lower
throughout 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 10 year total return would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MONEY MARKET 5.30% 29.64% 65.20%
All Taxable Money Market 4.98% 27.97% 59.43%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 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 iMoneyNet, Inc., formerly IBC
Financial Data, Inc. The past one year average represents a peer group
of 969 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN MONEY MARKET 5.30% 5.33% 5.15%
All Taxable Money Market 4.98% 5.04% 4.79%
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
5/2/00 2/1/00 11/2/99 8/3/99 4/27/99
Spartan Money Market Fund 5.74% 5.46% 5.19% 4.73% 4.59%
All Taxable Money Market 5.45% 5.14% 4.83% 4.50% 4.28%
Funds Average
5/3/00 2/2/00 11/3/99 7/28/99 4/28/99
MMDA 2.03% 2.07% 2.07% 2.04% 2.10%
Spartan Money
Market Fund
All Taxable Money
Market Funds
Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 5.74
Row: 1, Col: 2, Value: 5.45
Row: 1, Col: 3, Value: 2.03
Row: 2, Col: 1, Value: 5.46
Row: 2, Col: 2, Value: 5.14
Row: 2, Col: 3, Value: 2.07
Row: 3, Col: 1, Value: 5.19
Row: 3, Col: 2, Value: 4.83
Row: 3, Col: 3, Value: 2.07
Row: 4, Col: 1, Value: 4.73
Row: 4, Col: 2, Value: 4.5
Row: 4, Col: 3, Value: 2.04
Row: 5, Col: 1, Value: 4.59
Row: 5, Col: 2, Value: 4.28
Row: 5, Col: 3, Value: 2.1
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 iMoneyNet, 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 12 MONTHS
THAT ENDED APRIL 30, 2000?
A. The U.S. economy grew rapidly and unemployment fell to 30-year
lows. Historically, these conditions would have caused inflation to
accelerate, and the Federal Reserve Board moved carefully in an
attempt to contain the inflationary pressures that usually accompany
this backdrop. To do so, it gradually implemented five increases in
the rate banks charge each other for overnight loans - known as the
fed funds rate. These hikes of 0.25 percentage points started in June
1999, and brought the fed funds rate from 4.75% to 6.00% at the end of
April 2000. The Fed was concerned about developing imbalances related
to U.S. economic growth in the form of excess spending and tight labor
markets. Until recently, there were very few signs of inflation
problems. New technologies were credited with increasing productivity,
keeping prices down. However, data released in March and April
indicated that inflationary pressures were starting to build. There
was an uptick in the consumer price index (CPI), and gross domestic
product (GDP) in the first quarter came in at a robust annualized rate
of over 5% for the third quarter in a row. Most importantly, at the
end of April there was an unexpected increase in the employment cost
index (ECI), a comprehensive measure of labor costs. Year over year,
the ECI accelerated to 4.3% in the first quarter of 2000 - a high for
the current economic expansion - up from a 3.4% rate in the fourth
quarter of 1999. Before the release of this data, market participants
anticipated that the Fed would continue to raise rates cautiously.
Afterward, market prices started to reflect the expectation that the
Fed would become even more aggressive, possibly bumping up the fed
funds rate by an additional 0.50 percentage points at its meeting in
May.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. Given the Fed's inclination to gradually attack the imbalances that
could result in inflationary pressures later, we became convinced that
the Fed was beginning a protracted period of rate hikes when it began
raising rates in mid-1999. As a result, we structured the portfolio
with a relatively short maturity and aimed to invest in as many
securities as possible that matured right around the dates when the
Fed held its Open Market Committee meetings. By doing so, we were able
to re-invest the maturing assets in securities offering increasing
yields. Part of our strategy involved using floating-rate securities,
whose yields are re-set at regular intervals or in response to changes
in benchmark money market rates. In order to keep the fund's average
maturity fairly short, we also dedicated a significant part of the
portfolio to asset-backed commercial paper with one- and two-month
maturities. These high-quality, highly liquid securities helped us
achieve our goal of keeping the fund's maturity fairly short,
investing from one Fed meeting to the next.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on April 30, 2000, was 5.73%, compared
to 4.59% 12 months ago. For the 12 months that ended April 30, 2000,
the fund had a total return of 5.30%, compared to 4.98% for the all
taxable money market funds average, according to iMoneyNet, Inc.
Q. WHAT IS YOUR OUTLOOK, JOHN?
A. There is a very good chance that the Fed will step up its
anti-inflation efforts by implementing additional, and perhaps more
aggressive, short-term rate increases. That's because the Fed doesn't
want to fall behind the curve, and the upcoming presidential election
encourages the Fed to become more aggressive sooner rather than later.
The effects of monetary policy lag its implementation, and the middle
of 2000 will mark the one-year anniversary of the beginning of the
Fed's program of interest-rate hikes. Assuming the Fed takes a more
assertive approach over the next few months, the summer would be a
good time for the Fed to pause to assess the cumulative effects of the
rate increases it has made to that point. Unless there is a major
flare-up in inflation, the general feeling in the marketplace is that
the Fed will step back for a while at that time and stay in the
background at least until the elections are over. The Fed does not
want to become an issue in the campaign season, however it will
maintain a presence if conditions warrant it.
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 all
types, repurchase
agreements and reverse
repurchase agreements
FUND NUMBER: 454
TRADING SYMBOL: SPRXX
START DATE: January 23, 1989
SIZE: as of April 30, 2000,
more than $9.4 billion
MANAGER: John Todd, since
1989; manager, various Fidelity
and Spartan money market
funds; joined Fidelity in 1981
INVESTMENT CHANGES
<TABLE>
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MATURITY DIVERSIFICATION
DAYS % OF FUND'S INVESTMENTS 4/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99
10/31/99
0 - 30 63.4 44.8 39.5
31 - 90 19.0 15.1 34.4
91 - 180 5.4 34.2 19.5
181 - 397 12.2 5.9 6.6
WEIGHTED AVERAGE MATURITY
4/30/00 10/31/99 4/30/99
Spartan Money Market Fund 59 DAYS 69 Days 65 Days
All Taxable Money Market 47 DAYS 57 Days 61 Days
Funds Average *
</TABLE>
<TABLE>
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ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF APRIL 30, 2000 AS OF OCTOBER 31, 1999
Commercial Paper 37.2% Commercial Paper 53.7%
Bank CDs, BAs, TDs, and Bank CDs, BAs, TDs, and
Notes 62.2% Notes 45.9%
Government Securities 1.1% Government Securities 0.0%
** Other Investments 2.0% Other Investments and Net
Other Assets 0.4%
Row: 1, Col: 1, Value: 37.2 Row: 1, Col: 1, Value: 53.7
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 62.2 Row: 1, Col: 3, Value: 45.9
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.1 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: 2.0 Row: 1, Col: 8, Value: 0.4
</TABLE>
** NET OTHER ASSETS ARE NOT INCLUDED IN THE PIE CHART
*Source: iMoneyNet, Inc. (registered trademark)
INVESTMENTS APRIL 30, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
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CERTIFICATES OF DEPOSIT - 40.8%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
DOMESTIC CERTIFICATES OF
DEPOSIT - 2.7%
Citibank NA, New York
5/25/00 6.07% $ 55,000 $ 55,000
First Union National Bank,
North Carolina
5/18/00 6.00 45,000 45,000
5/20/00 6.18 (b) 60,000 60,000
11/21/00 6.48 70,000 70,000
World Savings Bank FSB
5/1/00 6.02 25,000 25,000
255,000
LONDON BRANCH, EURODOLLAR,
FOREIGN BANKS - 15.4%
Abbey National Treasury
Services PLC
8/15/00 6.27 50,000 50,000
11/9/00 6.50 75,000 75,000
ABN-AMRO Bank NV
5/4/00 6.02 50,000 50,000
8/3/00 6.25 50,000 50,000
Bank of Scotland Treasury
Services PLC
5/15/00 6.00 25,000 25,000
Barclays Bank PLC
5/4/00 6.09 85,000 85,000
5/8/00 6.01 55,000 55,000
5/8/00 6.09 100,000 100,000
Bayerische Hypo-und
Vereinsbank AG
5/17/00 6.06 50,000 50,000
6/13/00 6.10 80,000 80,000
6/27/00 6.22 65,000 65,000
11/1/00 6.70 65,000 65,000
12/11/00 6.50 75,000 75,000
Commerzbank AG
5/18/00 6.03 46,000 46,001
Halifax PLC
6/19/00 6.06 100,000 100,000
6/30/00 6.10 70,000 70,000
12/7/00 6.43 75,000 75,000
ING Bank NV
6/28/00 6.11 40,000 40,000
8/3/00 6.25 100,000 100,001
9/25/00 6.39 70,000 70,001
11/8/00 6.51 50,000 50,003
CERTIFICATES OF DEPOSIT -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
LONDON BRANCH, EURODOLLAR,
FOREIGN BANKS - CONTINUED
RaboBank Nederland Coop.
Central
12/18/00 6.52% $ 35,000 $ 35,000
Societe Generale
12/18/00 6.54 50,000 50,000
1,461,006
NEW YORK BRANCH, YANKEE
DOLLAR, FOREIGN BANKS - 22.7%
Banque Nationale de Paris (BNP)
6/26/00 6.10 50,000 50,000
8/2/00 5.85 50,000 49,995
Barclays Bank PLC
5/1/00 6.14 (b) 75,000 74,999
5/24/00 6.08 60,000 60,000
6/14/00 5.66 70,000 69,996
Canadian Imperial Bank of
Commerce
5/16/00 6.04 70,000 70,000
5/16/00 6.09 50,000 50,000
5/18/00 5.30 50,000 49,998
5/19/00 6.06 55,000 55,000
6/20/00 6.19 80,000 80,000
Commerzbank AG
7/28/00 6.25 50,000 49,988
Den Danske Bank Group AS
5/10/00 6.05 (b) 25,000 25,000
Deutsche Bank AG
5/10/00 6.06 (b) 50,000 49,978
5/16/00 6.02 75,000 75,000
5/30/00 6.02 50,000 50,000
2/5/01 6.75 100,000 99,960
2/22/01 6.82 50,000 49,981
Dresdner Bank AG
5/23/00 6.12 (b) 30,000 29,997
Lloyds Bank PLC
7/17/00 5.70 20,000 19,998
Norddeutsche Landesbank
Girozentrale
5/18/00 5.33 25,000 24,999
7/12/00 5.76 25,000 24,998
2/8/01 6.75 25,000 24,991
RaboBank Nederland Coop.
Central
7/12/00 5.75 50,000 49,995
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 Canada
5/15/00 6.06% (b) $ 70,000 $ 69,961
5/18/00 5.97 (b) 30,000 29,999
5/2/01 7.00 25,000 24,995
5/3/01 7.10 75,000 74,979
Royal Bank of Scotland PLC
5/4/00 6.02 50,000 50,000
5/8/00 6.08 80,000 80,000
5/22/00 6.00 50,000 50,000
Societe Generale
5/9/00 6.11 (b) 70,000 69,970
5/19/00 6.08 (b) 36,000 35,996
5/29/00 6.18 (b) 31,000 30,984
Svenska Handelsbanken AB
5/5/00 6.01 25,000 25,000
5/2/01 7.00 35,000 34,993
Toronto Dominion Bank
6/12/00 5.60 75,000 74,995
UBS AG
5/18/00 5.35 65,000 64,998
7/5/00 5.80 50,000 49,997
12/7/00 6.45 25,000 24,949
5/1/01 7.00 105,000 104,980
Westdeutsche Landesbank
Girozentrale
5/23/00 6.03 80,000 80,000
2,161,669
TOTAL CERTIFICATES OF DEPOSIT 3,877,675
COMMERCIAL PAPER - 37.2%
Aspen Funding Corp.
6/26/00 6.12 40,000 39,627
9/18/00 6.35 66,000 64,421
Bank of America Corp.
6/23/00 6.20 50,000 49,551
Bank of Nova Scotia
5/15/00 6.09 50,000 49,882
CBA Finance, Inc.
5/1/00 6.01 42,000 42,000
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Centric Capital Corp.
5/10/00 6.06% $ 22,577 $ 22,543
Citibank Credit Card Master
Trust I (Dakota Certificate
Program)
5/9/00 6.06 20,000 19,973
5/9/00 6.08 50,000 49,933
5/10/00 6.11 25,000 24,962
5/11/00 6.11 50,000 49,916
5/12/00 6.06 10,000 9,982
5/12/00 6.11 25,000 24,954
ConAgra, Inc.
5/11/00 6.19 12,000 11,979
5/12/00 6.16 40,000 39,925
5/17/00 6.23 20,000 19,945
Conoco, Inc.
5/17/00 6.22 25,000 24,931
Cregem North America, Inc.
11/22/00 6.44 40,000 38,599
CXC, Inc.
5/9/00 6.11 65,000 64,912
5/11/00 5.98 20,000 19,967
5/19/00 6.10 75,000 74,774
Daimler-Chrysler North
America Holding Corp.
5/4/00 6.01 50,000 49,975
5/23/00 6.04 25,000 24,909
Delaware Funding Corp.
5/18/00 6.06 70,038 69,839
Deutsche Bank Financial, Inc.
5/16/00 6.06 65,000 64,837
5/31/00 6.03 50,000 49,753
Dexia CLF Finance Co.
5/1/00 6.00 33,000 33,000
5/2/00 6.01 25,000 24,996
8/11/00 6.24 30,000 29,486
Edison Asset Securitization LLC
5/12/00 6.06 75,000 74,862
5/23/00 6.08 34,000 33,874
Enterprise Funding Corp.
5/22/00 6.18 37,154 37,021
Falcon Asset Securitization
Corp.
5/15/00 6.12 30,000 29,929
5/19/00 6.08 21,395 21,330
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
GE Capital International
Funding, Inc.
6/20/00 6.20% $ 35,000 $ 34,703
General Electric Capital Corp.
5/10/00 6.09 200,000 199,695
General Motors Acceptance Corp.
5/10/00 6.09 200,000 199,697
5/16/00 6.09 100,000 99,748
Goldman Sachs Group, Inc.
5/15/00 6.00 45,000 44,897
6/14/00 6.11 100,000 99,265
GTE Corp.
5/31/00 6.29 12,000 11,938
Heller Financial, Inc.
5/15/00 6.15 10,000 9,976
5/17/00 6.16 5,000 4,986
5/17/00 6.17 5,000 4,986
Kitty Hawk Funding Corp.
5/24/00 6.17 38,320 38,171
6/12/00 6.16 40,000 39,717
8/15/00 6.27 30,000 29,463
9/20/00 6.41 15,000 14,633
Lehman Brothers Holdings, Inc.
5/9/00 6.25 (b) 23,000 23,000
7/20/00 6.44 (b) 48,000 48,000
Lower Colorado River Auth.
Tax Rev.
6/5/00 6.08 40,000 40,000
MCI WorldCom, Inc.
5/4/00 6.14 10,000 9,995
5/15/00 6.14 15,000 14,964
5/17/00 6.14 20,000 19,946
5/17/00 6.16 10,000 9,973
Morgan Stanley Dean Witter &
Co.
5/26/00 6.04 30,000 29,876
Nationwide Building Society
5/3/00 6.01 50,000 49,984
5/4/00 5.96 20,000 19,990
New Center Asset Trust
5/8/00 6.13 75,000 74,911
5/17/00 6.09 50,000 49,866
Norfolk Southern Corp.
5/19/00 6.29 28,500 28,411
COMMERCIAL PAPER - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
Park Avenue Receivables Corp.
5/12/00 6.06% $ 60,370 $ 60,259
5/19/00 6.07 30,000 29,909
PHH Corp.
5/19/00 6.27 25,000 24,922
Preferred Receivables Funding
Corp.
5/15/00 6.10 53,000 52,875
5/18/00 6.07 30,000 29,914
5/19/00 6.08 25,000 24,924
RaboBank Nederland Coop.
Central
6/22/00 6.10 30,000 29,741
Rohm & Haas Co.
5/11/00 6.22 10,000 9,983
Societe Generale NA
5/22/00 6.00 70,000 69,760
12/26/00 6.69 25,000 23,943
Southern Co.
5/22/00 6.15 48,600 48,426
Toronto Dominion Holdings (USA)
10/30/00 6.42 50,000 48,450
Tyco International Group SA
5/15/00 6.24 10,000 9,976
5/17/00 6.26 40,000 39,889
5/17/00 6.27 20,000 19,945
UBS Finance, Inc.
5/9/00 6.08 165,000 164,778
Variable Funding Capital Corp.
5/11/00 6.07 75,000 74,874
5/12/00 6.07 25,000 24,954
Westdeutsche Landesbank
Girozentrale
5/24/00 6.04 80,000 79,696
Windmill Funding Corp.
5/9/00 6.05 47,000 46,937
5/16/00 6.07 20,000 19,950
5/19/00 6.07 35,742 35,634
5/23/00 6.08 20,000 19,926
TOTAL COMMERCIAL PAPER 3,527,043
FEDERAL AGENCIES - 1.1%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
FEDERAL HOME LOAN BANK - 0.6%
Discount Notes - 0.6%
2/1/01 6.50% $ 60,000 $ 57,194
FREDDIE MAC - 0.5%
Discount Notes - 0.5%
2/7/01 6.50 50,000 47,611
TOTAL FEDERAL AGENCIES 104,805
BANK NOTES - 7.4%
Bank of America NA
5/18/00 6.00 100,000 100,000
5/30/00 6.00 75,000 75,000
6/21/00 6.10 95,000 95,000
8/15/00 6.27 15,000 14,996
Bank One NA, Chicago
5/30/00 6.00 25,000 25,000
7/19/00 6.15 30,000 30,000
7/24/00 6.27 (b) 55,000 54,976
Comerica Bank, Detroit
5/12/00 6.17 (b) 46,000 45,991
First National Bank, Chicago
7/12/00 5.75 40,000 39,996
First Union National Bank,
North Carolina
5/1/00 6.20 (b) 32,000 32,000
7/5/00 6.38 (b) 50,000 50,000
7/26/00 6.32 (b) 38,000 38,000
Fleet National Bank
5/1/00 6.21 (b) 25,000 24,998
Harris Trust & Savings Bank,
Chicago
5/1/00 6.35 (b) 55,000 54,994
Mellon Bank NA, Pittsburgh
5/1/00 6.13 (b) 24,000 24,000
TOTAL BANK NOTES 704,951
MASTER NOTES - 0.7%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
J.P. Morgan Securities, Inc.
5/5/00 6.15% (b) $ 70,000 $ 70,000
MEDIUM-TERM NOTES - 6.2%
Abbey National Treasury
Services PLC
8/3/00 5.85 50,000 49,994
AT&T Corp.
5/8/00 6.18 (b) 120,000 120,000
Bank of Scotland Treasury
Services PLC
7/19/00 6.28 (b) 30,000 30,001
CIESCO LP
5/17/00 6.11 (b) 50,000 49,998
CIT Group, Inc.
5/1/00 6.11 (b) 45,000 44,970
5/1/00 6.20 (b) 40,000 39,997
Ford Motor Credit Co.
5/1/00 6.20 (b) 66,000 66,000
5/23/00 6.09 (b) 80,000 79,983
General Electric Capital Corp.
5/12/00 6.05 (b) 27,000 27,000
General Motors Acceptance Corp.
6/14/00 6.05 (b) 35,000 34,981
Merrill Lynch & Co., Inc.
5/3/00 6.10 (b) 45,000 44,996
TOTAL MEDIUM-TERM NOTES 587,920
SHORT-TERM NOTES - 5.2%
Centex Home Mortgage LLC
Series 1999 2,
5/22/00 6.27 (a)(b) 50,000 50,000
General Motors Acceptance
Corp. Mortgage Credit
5/2/00 6.18 25,000 24,996
Jackson National Life
Insurance Co.
5/1/00 6.45 (b)(c) 34,000 34,000
Monumental Life Insurance Co.
5/1/00 6.27 (b)(c) 29,000 29,000
5/2/01 6.25 (b)(c) 35,000 35,000
SHORT-TERM NOTES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
New York Life Insurance Co.
6/1/00 6.22% (b)(c) $ 25,000 $ 25,000
7/3/00 6.41 (b)(c) 26,000 26,000
Pacific Life Insurance Co.
6/9/00 6.22 (b)(c) 35,000 35,000
RACERS Series 1999 16MM,
5/2/00 6.15 (a)(b) 46,000 46,000
SMM Trust Series 1999 I,
5/26/00 6.11 (a)(b) 20,000 20,000
Strategic Money Market Trust
Series 1999 A6,
7/13/00 6.40 (a)(b) 91,000 91,000
Strategic Money Market Trust
Series 2000 B,
6/13/00 6.15 (a)(b) 30,000 30,000
Transamerica Occidental Life
Insurance
5/30/00 6.56 (b)(c) 50,000 50,000
TOTAL SHORT-TERM NOTES 495,996
TIME DEPOSITS - 1.9%
Abbey National Treasury
Services PLC
5/17/00 6.06 75,000 75,000
Credit Swiss First Boston Bank
5/1/00 6.09 100,000 100,000
TOTAL TIME DEPOSITS 175,000
REPURCHASE AGREEMENTS - 2.0%
MATURITY AMOUNT (000S)
In a joint trading account $ 4,273 4,271
(U.S. Government
Obligations) dated 4/28/00
due 5/1/00 At 5.86%
With Goldman Sachs & Co.: At 185,095 185,000
6.14%, dated 4/28/00 due
5/1/00: (Corporate
Obligations) (principal
amount $185,000,000) 0% -
8.376%, 9/8/00 - 9/15/48
TOTAL REPURCHASE AGREEMENTS 189,271
TOTAL INVESTMENT PORTFOLIO - 9,732,661
102.5%
NET OTHER ASSETS - (2.5)% (236,877)
NET ASSETS - 100% $ 9,495,784
Total Cost for Income Tax Purposes $ 9,732,661
</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 $237,000,000 or 2.5% 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 (000S)
Jackson National Life 7/6/99 $ 34,000
Insurance Co. 6.45%, 5/1/00
Monumental Life Insurance 2/1/00 $ 35,000
Co.: 6.25%, 5/2/01
6.27%, 5/1/00 7/31/98 - 9/17/98 $ 29,000
New York Life Insurance Co.: 8/13/99 $ 25,000
6.22%, 6/1/00
6.41%, 7/3/00 12/20/99 $ 26,000
Pacific Life Insurance Co. 8/31/99 $ 35,000
6.22%, 6/9/00
Transamerica Occidental Life 4/28/00 $ 50,000
Insurance 6.56%, 5/30/00
INCOME TAX INFORMATION
At April 30, 2000, the fund had a capital loss carryforward of
approximately $2,521,000 of which $1,881,000, 476,000, $162,000 and
$2,000 will expire on April 30, 2002, 2003, 2004 and 2008,
respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) APRIL 30, 2000
ASSETS
Investment in securities, at $ 9,732,661
value (including repurchase
agreements of $189,271) -
See accompanying schedule
Receivable for investments 50,000
sold
Receivable for fund shares 43,456
sold
Interest receivable 72,361
Other receivables 8
TOTAL ASSETS 9,898,486
LIABILITIES
Payable for investments $ 354,947
purchased
Payable for fund shares 41,169
redeemed
Distributions payable 2,888
Accrued management fee 3,549
Other payables and accrued 149
expenses
TOTAL LIABILITIES 402,702
NET ASSETS $ 9,495,784
Net Assets consist of:
Paid in capital $ 9,498,305
Accumulated undistributed net (2,521)
realized gain (loss) on
investments
NET ASSETS, for 9,497,794 $ 9,495,784
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($9,495,784
(divided by) 9,497,794
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR
ENDED APRIL 30, 2000
INTEREST INCOME $ 535,618
EXPENSES
Management fee $ 42,803
Non-interested trustees' 32
compensation
Interest 5
Total expenses before 42,840
reductions
Expense reductions (285) 42,555
NET INTEREST INCOME 493,063
NET REALIZED GAIN (LOSS) ON 7
INVESTMENT SECURITIES
NET INCREASE IN NET ASSETS $ 493,070
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 2000 YEAR ENDED APRIL 30, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 493,063 $ 472,366
Net realized gain (loss) 7 98
NET INCREASE (DECREASE) IN 493,070 472,464
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (493,063) (472,366)
from net interest income
Share transactions at net 9,438,870 10,977,091
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 461,166 446,239
distributions from net
interest income
Cost of shares redeemed (9,912,207) (10,778,535)
NET INCREASE (DECREASE) IN (12,171) 644,795
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (12,164) 644,893
IN NET ASSETS
NET ASSETS
Beginning of period 9,507,948 8,863,055
End of period $ 9,495,784 $ 9,507,948
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED APRIL 30, 2000 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .052 .050 .053 .051 .054
Operations Net interest
income
Less Distributions
From net interest income (.052) (.050) (.053) (.051) (.054)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 5.30% 5.12% 5.43% 5.21% 5.57%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,496 $ 9,508 $ 8,863 $ 9,300 $ 8,451
(in millions)
Ratio of expenses to average .45% .45% .45% .45% .45%
net assets
Ratio of expenses to average .45% .45% .45% .45% .42% C
net assets after expense
reductions
Ratio of net interest income 5.18% 5.00% 5.31% 5.09% 5.45%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 2000
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 shares of the fund or are 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.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency,
or other obligations found to be satisfactory by FMR are transferred
to an account of the fund, or to the Joint Trading Account, at a bank
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
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.
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 agreement
was outstanding amounted to $35,000,000. The weighted average interest
rate was 4.75%.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by
the SEC, the fund, along with other registered investment companies
having management contracts with FMR, may participate in an interfund
lending program. This program provides an alternative credit facility
allowing the fund to borrow from, or lend money to, other
participating funds.
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 $234,000,000
or 2.5% 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 annual 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 the fund.
To offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$140,000.
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.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
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.
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.
4. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a lender.
The average daily loan balance during the period for which loans were
outstanding amounted to $21,663,000. The weighted average interest
rate was 5.89%. Interest earned from the interfund lending program
amounted to $46,000 and is included in interest income on the
Statement of Operations. At period end there were no interfund loans
outstanding.
5. EXPENSE REDUCTIONS.
Through arrangements 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 $285,000 under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Hereford Street Trust and the Shareholders
of Spartan Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan Money Market Fund (a fund of Fidelity Hereford Street Trust)
at April 30, 2000, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated,
in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Spartan Money Market Fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted
in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation
of securities at April 30, 2000 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 31, 2000
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 (FAST(registered trademark))
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.
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CALIFORNIA
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10100 Santa Monica Blvd.
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251 University Avenue
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1760 Challenge Way
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7676 Hazard Center Drive
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455 Market Street
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Denver, CO
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4400 N. Federal Highway
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4729 East 82nd Street
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150 Essex Street
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56 South Street
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501 Route 17, South
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1055 Franklin Avenue
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999 Walt Whitman Road
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4611 Sharon Road
Charlotte, NC
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215 South State Street
Salt Lake City, UT
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8180 Greensboro Drive
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411 108th Avenue, N.E.
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511 Pine Street
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1900 K Street, N.W.
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WISCONSIN
595 North Barker Road
Brookfield, WI
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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
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OVERNIGHT EXPRESS
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SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 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 Las 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.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Boyce I. Greer, Vice President
John J. Todd, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, 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
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
* INDEPENDENT TRUSTEES
TMM-ANN-0600 103622
1.703531.102
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
and 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 (FAST(registered trademark)) 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
ANNUAL REPORT
APRIL 30, 2000
(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.
REPORT OF INDEPENDENT 18 The auditors' opinion.
ACCOUNTANTS
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:
New indicators of accelerating inflation led to a sharp downturn in
equity markets, as the Dow Jones Industrial Average, NASDAQ and S&P
500(Registered trademark) each suffered its worst single-session point
decline in history on April 14. Volatility ruled the remainder of the
month, with equity markets experiencing both strong rallies and broad
sell-offs. Inflation-sensitive Treasuries experienced similar
volatility, as prices for the bellwether 10-year note edged lower
throughout 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 10 year total return would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN US GOVERNMENT MONEY 5.17% 29.14% 63.27%
MARKET
Government Retail Money 4.76% 26.79% 56.98%
Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 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 government retail money market funds
average, which reflects the performance of government retail money
market funds with similar objectives tracked by iMoneyNet, Inc.,
formerly IBC Financial Data, Inc. The past one year average represents
a peer group of 220 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN US GOVERNMENT MONEY 5.17% 5.25% 5.02%
MARKET
Government Retail Money 4.76% 4.85% 4.63%
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
5/2/00 2/1/00 11/2/99 8/3/99 4/27/99
Spartan U.S. Government Money 5.61% 5.28% 5.04% 4.67% 4.51%
Market Fund
Government Retail Money 5.25% 4.90% 4.57% 4.31% 4.09%
Market Funds Average
5/3/00 2/2/00 11/3/99 7/28/99 4/28/99
MMDA 2.03% 2.07% 2.07% 2.04% 2.10%
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: 5.609999999999999
Row: 1, Col: 2, Value: 5.25
Row: 1, Col: 3, Value: 2.03
Row: 2, Col: 1, Value: 5.28
Row: 2, Col: 2, Value: 4.9
Row: 2, Col: 3, Value: 2.07
Row: 3, Col: 1, Value: 5.04
Row: 3, Col: 2, Value: 4.57
Row: 3, Col: 3, Value: 2.07
Row: 4, Col: 1, Value: 4.67
Row: 4, Col: 2, Value: 4.31
Row: 4, Col: 3, Value: 2.04
Row: 5, Col: 1, Value: 4.51
Row: 5, Col: 2, Value: 4.09
Row: 5, Col: 3, Value: 2.1
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 iMoneyNet, 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 12 MONTHS
THAT ENDED APRIL 30, 2000?
A. U.S. economic growth remained strong, boosted by robust consumer
spending. Consumers spent freely due to a strong job market, the
wealth effect created by rising stock and real estate prices, and high
confidence. In addition, unemployment dropped to historically low
levels. Contrary to expectations, there was very little evidence of
inflation until recently. Technological improvements increased
productivity so that the economy could grow at faster rates without
generating the inflationary pressures experienced in the past. In an
attempt to ensure that inflation did not sprout, the Federal Reserve
Board gradually increased short-term interest rates during the year.
Starting in June 1999, the Fed increased the rate banks charge each
other for overnight loans - known as the fed funds rate - five times
by increments of 0.25 percentage points, from 4.75% to 6.00% by the
end of the period.
Q. WHAT HAPPENED MORE RECENTLY?
A. Evidence emerged that inflation was starting to pick up.
Specifically, the employment cost index (ECI) - a measure of the costs
that businesses incur for wages and benefits - rose at a 1.4% rate in
the first quarter of 2000, compared to expectations of 1.0%.
Year-over-year, the ECI grew 4.3%, up from 3.4% in the previous
quarter. Combined with signs of continued strong demand in the
economy, this data caused the market to forecast a more aggressive Fed
policy. As a result, short-term yields rose and the money market yield
curve - a representation of the difference between short- and
long-term rates - steepened.
Q. THERE HAVE BEEN RUMBLINGS IN CONGRESS ABOUT EXAMINING THE IMPLICIT
GOVERNMENT GUARANTEE OF AGENCY-SECURITY DEBT. HOW DID THAT AFFECT THE
FUND?
A. U. S. Treasury securities are backed by the full faith and credit
of the U.S. government. However, securities issued by agencies such as
Fannie Mae and Freddie Mac enjoy only the implied support of the U.S.
government because they were created by an act of Congress. Recently,
the U.S. Treasury and some in Congress have called into question some
agency activities that fall outside their original mission. These
parties are also concerned that the agencies have grown so rapidly and
to such a great size that if they encounter significant problems, the
health of the entire financial system may be threatened. So far, these
discussions have had no real impact on agency money market securities.
We are confident that any forthcoming changes will happen far enough
in the future that we will be able to make any appropriate changes to
our approach.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. With interest rates on the rise, I was cautious. Nevertheless, I
kept the fund's average maturity consistently longer than that of its
peers. 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. However, I was able to take
advantage of buying opportunities in longer-term securities that
factored in our expectations of future Fed rate hikes. In addition,
late in the third quarter and in the fourth quarter of 1999, we
focused on earning the highest possible yields over the turn from 1999
to 2000. Finally, I'd mention that our floating-rate investments -
whose yields are re-set at regular intervals - generally boosted fund
performance. However, holdings in these securities declined recently
as a percentage of net assets because they became extremely expensive,
so we did not replace maturing positions.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on April 30, 2000, was 5.61%, compared
to 4.51% 12 months ago. For the 12 months that ended April 30, 2000,
the fund had a total return of 5.17%, compared to 4.76% for the
government retail money market funds average, according to iMoneyNet,
Inc.
Q. WHAT IS YOUR OUTLOOK, BOB?
A. Fed rate hikes generally take some time before they influence the
economy. Therefore, the Fed's mid-1999 rate increases should soon
begin to take effect. Nonetheless, given the information currently
available, it seems very likely that the Fed will raise rates in May
and again in June. If the economy continues to expand at a rapid pace,
or if inflation indicators show more deterioration, the Fed may raise
rates more aggressively. If these rate hikes do start to dampen
economic growth, I believe the Fed would be content to sit back to
assess the impact of its actions. For my part, I'll continue to follow
a cautious approach, keeping the fund's average maturity fairly short
until we see either the Fed move aggressively or the economy and
inflation numbers subside.
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: as high a level of income
as is consistent with
preservation of capital and
liquidity by investing in U.S.
government securities,
repurchase agreements for
those securities and reverse
repurchase agreements.
FUND NUMBER: 458
TRADING SYMBOL: SPAXX
START DATE: February 5, 1990
SIZE: as of April 30, 2000,
more than $815 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 4/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99
10/31/99
0 - 30 41.8 49.3 37.8
31 - 90 40.7 17.9 34.0
91 - 180 9.3 18.4 20.0
181 - 397 8.2 14.4 8.2
WEIGHTED AVERAGE MATURITY
4/30/00 10/31/99 4/30/99
Spartan U.S. Government Money 61 DAYS 72 Days 68 Days
Market
Government Retail Money 43 DAYS 54 Days 58 Days
Market Funds Average*
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF APRIL 30, 2000 AS OF OCTOBER 31, 1999
Federal Agency Issues 74.0% Federal Agency Issues 77.2%
Repurchase Agreements and Repurchase Agreements and
Net Other Assets 26.0% Net Other Assets 22.8%
Row: 1, Col: 1, Value: 74.0 Row: 1, Col: 1, Value: 77.2
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: 0.0 Row: 1, Col: 4, Value: 0.0
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: 26.0 Row: 1, Col: 8, Value: 22.8
</TABLE>
INVESTMENTS APRIL 30, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FEDERAL AGENCIES - 74.0%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
FANNIE MAE - 31.6%
Agency Coupons - 18.6%
5/1/00 6.12% (a) $ 13,000,000 $ 12,998,224
5/2/00 5.95 (a) 10,000,000 9,998,285
5/4/00 5.92 (a) 18,000,000 17,997,197
5/5/00 5.04 7,000,000 6,999,907
5/10/00 5.95 (a) 15,000,000 14,999,779
5/15/00 5.88 (a) 18,000,000 17,991,829
6/7/00 5.25 12,000,000 11,998,738
6/9/00 5.38 7,000,000 6,999,000
7/14/00 6.08 (a) 32,000,000 31,995,795
9/25/00 5.82 5,000,000 4,984,308
3/1/01 6.55 6,000,000 5,999,450
3/20/01 6.49 9,000,000 8,997,539
151,960,051
Discount Notes - 13.0%
5/3/00 5.68 5,000,000 4,998,467
6/29/00 6.14 30,000,000 29,702,591
7/13/00 6.18 29,795,000 29,427,057
7/28/00 5.73 8,000,000 7,894,009
8/10/00 6.09 7,000,000 6,883,934
8/31/00 6.13 22,000,000 21,556,394
9/14/00 6.24 6,000,000 5,862,867
106,325,319
258,285,370
FEDERAL HOME LOAN BANK - 21.4%
Agency Coupons - 18.5%
5/1/00 6.13 (a) 19,000,000 18,994,249
5/3/00 6.31 (a) 8,000,000 7,998,269
5/4/00 5.99 (a) 15,000,000 14,994,952
5/12/00 5.87 (a) 7,000,000 6,999,821
5/19/00 5.13 15,000,000 14,999,517
6/14/00 5.47 4,000,000 3,999,356
7/5/00 6.13 (a) 32,000,000 31,990,620
7/15/00 6.09 (a) 15,000,000 14,994,580
8/17/00 5.86 7,000,000 6,991,430
11/3/00 6.00 8,000,000 7,997,967
11/3/00 6.02 3,000,000 2,999,009
FEDERAL AGENCIES - CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
FEDERAL HOME LOAN BANK -
CONTINUED
Agency Coupons - continued
12/1/00 6.03% $ 6,500,000 $ 6,493,946
2/7/01 6.48 11,000,000 10,980,940
150,434,656
Discount Notes - 2.9%
8/11/00 6.10 10,634,000 10,455,331
8/16/00 6.12 13,790,000 13,546,538
24,001,869
174,436,525
FREDDIE MAC - 19.2%
Agency Coupons - 6.0%
6/20/00 5.94 (a) 25,000,000 24,980,106
7/10/00 6.06 (a) 15,000,000 14,990,111
1/16/01 6.43 9,000,000 8,606,858
48,577,075
Discount Notes - 13.2%
6/2/00 5.40 10,000,000 9,954,489
6/2/00 5.46 7,000,000 6,967,769
6/13/00 5.51 6,000,000 5,962,590
6/13/00 6.09 34,000,000 33,754,994
6/13/00 6.10 13,000,000 12,906,212
6/15/00 5.45 6,000,000 5,961,263
6/23/00 5.50 7,000,000 6,946,102
7/5/00 5.61 5,000,000 4,951,972
7/20/00 6.13 11,000,000 10,854,311
2/7/01 6.50 10,000,000 9,522,167
107,781,869
156,358,944
STUDENT LOAN MARKETING
ASSOCIATION - 1.8%
Agency Coupons - 1.8%
5/2/00 6.43 (a) 4,000,000 3,999,486
5/2/00 6.48 (a) 8,000,000 7,998,849
5/4/00 6.38 (a) 3,000,000 2,999,964
14,998,299
TOTAL FEDERAL AGENCIES 604,079,138
REPURCHASE AGREEMENTS - 18.4%
MATURITY AMOUNT VALUE (NOTE 1)
In a joint trading account
(U.S. Government
Obligations) dated:
3/29/00 due 5/25/00 At 6.1% $ 39,376,675 $ 39,000,000
3/31/00 due 5/25/00 At 6.1% 18,167,750 18,000,000
4/5/00 due 5/3/00 At 6.03% 20,093,800 20,000,000
4/7/00 due 6/7/00 At 6.1% 16,165,378 16,000,000
4/28/00 due 5/1/00 At 5.86% 56,892,754 56,865,000
TOTAL REPURCHASE AGREEMENTS 149,865,000
TOTAL INVESTMENT PORTFOLIO - 753,944,138
92.4%
NET OTHER ASSETS - 7.6% 61,714,794
NET ASSETS - 100% $ 815,658,932
Total Cost for Income Tax Purposes $ 753,944,138
</TABLE>
LEGEND
(a) 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, 2000, the fund had a capital loss carryforward of
approximately $123,000 of which $33,000, $53,000 and $37,000 will
expire on April 30, 2002, 2003 and 2004, respectively.
A total of 27.84% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax. The fund will notify
shareholders in January 2001 of amounts for use in preparing 2000
income tax returns (unaudited).
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
ASSETS
Investment in securities, at $ 753,944,138
value (including repurchase
agreements of $149,865,000)
- See accompanying schedule
Receivable for investments 57,676,752
sold
Receivable for fund shares 587,857
sold
Interest receivable 4,095,699
TOTAL ASSETS 816,304,446
LIABILITIES
Payable to custodian bank $ 347
Payable for fund shares 213,961
redeemed
Distributions payable 119,758
Accrued management fee 301,428
Other payables and accrued 10,020
expenses
TOTAL LIABILITIES 645,514
NET ASSETS $ 815,658,932
Net Assets consist of:
Paid in capital $ 815,782,329
Accumulated net realized gain (123,397)
(loss) on investments
NET ASSETS, for 815,782,329 $ 815,658,932
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($815,658,932
(divided by) 815,782,329
shares)
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 2000
INTEREST INCOME $ 45,586,027
EXPENSES
Management fee $ 3,741,240
Non-interested trustees' 2,758
compensation
Total expenses before 3,743,998
reductions
Expense reductions (12,545) 3,731,453
NET INTEREST INCOME 41,854,574
NET REALIZED GAIN (LOSS) ON 13,792
INVESTMENTS
NET INCREASE IN NET ASSETS $ 41,868,366
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30, 2000 YEAR ENDED APRIL 30, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 41,854,574 $ 40,713,930
Net realized gain (loss) 13,792 14,978
NET INCREASE (DECREASE) IN 41,868,366 40,728,908
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (41,854,574) (40,713,930)
from net interest income
Share transactions at net 637,554,338 839,208,314
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 39,748,091 38,482,527
distributions from net
interest income
Cost of shares redeemed (708,990,552) (803,544,196)
NET INCREASE (DECREASE) IN (31,688,123) 74,146,645
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (31,674,331) 74,161,623
IN NET ASSETS
NET ASSETS
Beginning of period 847,333,263 773,171,640
End of period $ 815,658,932 $ 847,333,263
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED APRIL 30, 2000 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .050 .049 .052 .050 .054
Operations Net interest
income
Less Distributions
From net interest income (.050) (.049) (.052) (.050) (.054)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 5.17% 5.02% 5.37% 5.16% 5.52%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 815,659 $ 847,333 $ 773,172 $ 815,751 $ 761,475
(000 omitted)
Ratio of expenses to average .45% .45% .45% .45% .45%
net assets
Ratio of expenses to average .45% .44% C .45% .45% .41% C
net assets after expense
reductions
Ratio of net interest income 5.03% 4.90% 5.24% 5.02% 5.42%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 2000
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, Federal Agency,
or other obligations found to be satisfactory by FMR 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
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
that security. The price of the underlying securities is fixed at the
time the transaction is negotiated. 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 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. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a fee
that is computed daily at an annual 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 $11,646.
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.
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.
4. EXPENSE REDUCTIONS.
Through arrangements 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 $12,545 under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Hereford Street Trust and the Shareholders
of Spartan U.S. Government Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan U.S. Government Money Market Fund (a fund of Fidelity Hereford
Street Trust) at April 30, 2000, and the results of its operations,
the changes in its net assets and the financial highlights for the
periods indicated, in conformity with accounting principles generally
accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Spartan U.S. Government Money Market
Fund's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing
standards generally accepted in the United States which require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included
confirmation of securities at April 30, 2000 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 31, 2000
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 (FAST(registered trademark))
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
8 Montgomery 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
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 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 Old N. 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
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 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
Providence, RI
TENNESSEE
6150 Poplar Avenue
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 Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International 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 Las 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 Las 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.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Boyce I. Greer, Vice President
Robert A. Litterst, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, 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
Donald J. Kirk *
Ned C. Lautenbach*
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
* INDEPENDENT TRUSTEES
SPU-ANN-0600 103912
1.703529.102
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
and 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 (FAST(registered trademark)) 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
ANNUAL REPORT
APRIL 30, 2000
(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.
REPORT OF INDEPENDENT 17 The auditors' opinion.
ACCOUNTANTS
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:
New indicators of accelerating inflation led to a sharp downturn in
equity markets, as the Dow Jones Industrial Average, NASDAQ and S&P
500(Registered trademark) each suffered its worst single-session point
decline in history on April 14. Volatility ruled the remainder of the
month, with equity markets experiencing both strong rallies and broad
sell-offs. Inflation-sensitive Treasuries experienced similar
volatility, as prices for the bellwether 10-year note edged lower
throughout 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 10 year total return would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN US TREASURY MONEY 4.81% 27.30% 59.97%
MARKET
Treasury Retail Money Market 4.54% 25.91% 56.66%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 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 iMoneyNet, Inc.,
formerly IBC Financial Data, Inc. The past one year average represents
a peer group of 38 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
SPARTAN US TREASURY MONEY 4.81% 4.95% 4.81%
MARKET
Treasury Retail Money Market 4.54% 4.70% 4.55%
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
5/2/00 2/1/00 11/2/99 8/3/99 4/27/99
Spartan U.S. Treasury Money 5.40% 4.97% 4.56% 4.40% 4.25%
Market Fund
Treasury Retail Money Market 5.12% 4.68% 4.29% 4.08% 3.94%
Funds Average
5/3/00 2/2/00 11/3/99 7/28/99 4/28/99
MMDA 2.03% 2.07% 2.07% 2.04% 2.10%
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: 5.4
Row: 1, Col: 2, Value: 5.119999999999999
Row: 1, Col: 3, Value: 2.03
Row: 2, Col: 1, Value: 4.970000000000001
Row: 2, Col: 2, Value: 4.68
Row: 2, Col: 3, Value: 2.07
Row: 3, Col: 1, Value: 4.56
Row: 3, Col: 2, Value: 4.29
Row: 3, Col: 3, Value: 2.07
Row: 4, Col: 1, Value: 4.4
Row: 4, Col: 2, Value: 4.08
Row: 4, Col: 3, Value: 2.04
Row: 5, Col: 1, Value: 4.25
Row: 5, Col: 2, Value: 3.94
Row: 5, Col: 3, Value: 2.1
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 iMoneyNet, 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 12 MONTHS
THAT ENDED APRIL 30, 2000?
A. The U.S. economy continued to grow at a rapid pace, boosted by
robust consumer spending. Consumers spent freely due to a strong job
market, the wealth effect created by rising asset values - such as
stocks and real estate - and high confidence. In addition,
unemployment dropped to historically low levels. Contrary to
expectations, there was very little evidence of inflation until
recently. Technological improvements increased productivity to the
point where the economy was able to grow at faster rates without
generating the kind of inflationary pressures experienced in the past.
In an attempt to make sure that inflation did not sprout, the Federal
Reserve Board gradually increased short-term interest rates over the
course of the past year. Starting in June 1999, the Fed increased the
rate banks charge each other for overnight loans - known as the fed
funds rate - five times by increments of 0.25 percentage points, from
4.75% to 6.00% by the end of the period.
Q. WHAT HAPPENED MORE RECENTLY?
A. Evidence emerged that inflation was starting to pick up.
Specifically, the employment cost index (ECI) - a measure of the costs
that businesses incur for wages and benefits - rose at a 1.4% rate in
the first quarter of 2000, compared to an expectation of 1.0%.
Year-over-year, the ECI grew 4.3%, up from 3.4% in the previous
quarter. Combined with signs of continued strong demand in the
economy, this data caused the market to forecast a more aggressive Fed
policy, including the anticipation of a 0.50 percentage point rate
hike at the next Fed meeting in May. As a result, short-term yields
rose and the money market yield curve - a representation of the
difference between short- and long-term rates - steepened.
Q. THE U.S. TREASURY CONTINUED TO PAY OFF EXISTING DEBT AND REDUCE THE
ISSUANCE OF NEW SECURITIES. HOW DID THIS AFFECT THE FUND?
A. It was beneficial. In order to maintain liquidity at a time when it
was reducing the number and frequency of its one-year bill auctions,
the Treasury modestly increased the supply of three- and six-month
bills. That's where the bulk of our investing takes place, so the
added supply and sustained liquidity helped the fund. Also, the
uncertainty about Treasury supply created opportunities that we were
able to take advantage of, on occasion.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. With interest rates on the rise, I was cautious. Nevertheless, I
kept the fund's average maturity consistently longer than that of its
peers. 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. However, I was able to take
advantage of buying opportunities in longer-term securities that
factored in our expectations of future Fed rate hikes. I also extended
the fund's maturity in the third and fourth quarters of 1999 to lock
in Treasury securities maturing after January 1, 2000. At that time,
we were concerned about a potential shortage of Treasuries at
year-end.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on April 30, 2000, was 5.41%, compared
to 4.25% 12 months ago. For the 12 months that ended April 30, 2000,
the fund had a total return of 4.81%, compared to 4.54% for the
Treasury retail money market funds average, according to iMoneyNet,
Inc.
Q. WHAT IS YOUR OUTLOOK?
A. Fed rate hikes generally take some time before they influence the
economy. Therefore, the Fed's mid-1999 rate increases should soon
begin to take effect. Nonetheless, given the information currently
available, it seems very likely that the Fed will raise rates in May
and again in June. If the economy continues to expand at a rapid pace,
or if inflation indicators show more deterioration, the Fed may raise
rates more aggressively. If these rate hikes do start to dampen
economic growth, I believe the Fed would be content to sit back to
assess the impact of its actions. For my part, I'll continue to follow
a cautious approach, keeping the fund's average maturity fairly short
until we see either the Fed move aggressively or the economy and
inflation numbers subside.
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: as high a level of
income as is consistent with
security of principal and
liquidity by investing in U.S.
Treasury money market
securities, whose interest is
free from state and local
taxes, and reverse repurchase
agreements
FUND NUMBER: 415
TRADING SYMBOL: FDLXX
START DATE: January 5, 1988
SIZE: as of April 30, 2000,
more than $1.9 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 4/30/00 % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS 4/30/99
10/31/99
0 - 30 11.7 33.5 10.4
31 - 90 61.1 11.7 47.0
91 - 180 24.4 50.8 39.5
181 - 397 2.8 4.0 3.1
WEIGHTED AVERAGE MATURITY
4/30/00 10/31/99 4/30/99
Spartan U.S. Treasury Money 54 DAYS 72 Days 78 Days
Market Fund
Treasury Retail Money Market 51 DAYS 66 Days 71 Days
Funds Average *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF APRIL 30, 2000 AS OF OCTOBER 31, 1999
U.S. Treasury Bills 45.8% U.S. Treasury Bills 12.5%
U.S. Treasury Notes 44.0% U.S. Treasury Notes 85.1%
Net Other Assets 10.2% Net Other Assets 2.4%
Row: 1, Col: 1, Value: 45.8 Row: 1, Col: 1, Value: 12.5
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: 44.0 Row: 1, Col: 4, Value: 85.09999999999999
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: 10.2 Row: 1, Col: 8, Value: 2.4
</TABLE>
INVESTMENTS APRIL 30, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -
89.8%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
PURCHASE
U.S. TREASURY BILLS - 45.8%
5/25/00 5.39% $ 18,533 $ 18,468
5/25/00 5.47 20,000 19,929
5/25/00 5.54 22,103 22,023
6/1/00 5.56 7,872 7,835
6/1/00 5.66 30,000 29,856
6/1/00 5.68 632 629
6/1/00 5.72 50,000 49,757
6/1/00 5.74 88,341 87,910
6/8/00 5.56 15,000 14,914
6/8/00 5.68 30,000 29,823
6/8/00 5.76 100,000 99,400
6/15/00 5.78 35,000 34,751
6/15/00 5.81 10,000 9,928
6/15/00 5.82 10,000 9,928
6/22/00 5.67 25,000 24,801
6/22/00 5.88 100,000 99,164
6/29/00 5.56 15,000 14,867
6/29/00 5.57 40,000 39,644
6/29/00 5.65 15,000 14,865
6/29/00 5.69 25,000 24,772
6/29/00 5.80 25,000 24,766
6/29/00 5.83 30,000 29,717
7/6/00 5.69 45,000 44,536
7/6/00 5.70 25,000 24,742
7/6/00 5.82 50,000 49,474
7/13/00 5.81 60,000 59,303
10/5/00 6.08 10,000 9,743
11/9/00 6.05 20,000 19,386
914,931
U.S. TREASURY NOTES - 44.0%
5/15/00 5.44 25,000 25,008
5/15/00 5.50 10,000 10,003
5/15/00 5.57 30,000 30,008
5/15/00 5.61 85,000 85,020
5/31/00 5.12 30,000 30,022
5/31/00 5.55 70,000 70,033
5/31/00 5.56 3,256 3,258
5/31/00 5.60 5,222 5,224
5/31/00 5.63 10,000 10,004
5/31/00 5.68 78,500 78,475
5/31/00 5.80 25,000 25,005
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
5/31/00 5.83% $ 50,000 $ 50,008
7/31/00 5.80 100,000 100,042
7/31/00 5.81 80,000 80,032
7/31/00 5.87 70,000 70,028
7/31/00 5.99 25,100 25,056
8/15/00 5.92 55,000 54,060
8/15/00 6.05 35,000 34,390
8/15/00 6.06 65,000 64,972
11/30/00 6.13 30,000 29,720
880,368
TOTAL INVESTMENT PORTFOLIO - 1,795,299
89.8%
NET OTHER ASSETS - 10.2% 204,465
NET ASSETS - 100% $ 1,999,764
Total Cost for Income Tax Purposes $ 1,795,299
</TABLE>
INCOME TAX INFORMATION
At April 30, 2000, the fund had a capital loss carryforward of
approximately $52,000 of which $32,000 and $20,000 will expire on
April 30, 2004 and 2008, respectively.
A total of 100% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax. The fund will notify
shareholders in January 2001 of amounts for use in preparing 2000
income tax returns (unaudited).
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNT) APRIL 30, 2000
ASSETS
Investment in securities, at $ 1,795,299
value - See accompanying
schedule
Receivable for investments 246,968
sold
Receivable for fund shares 5,834
sold
Interest receivable 24,072
TOTAL ASSETS 2,072,173
LIABILITIES
Payable for investments $ 71,100
purchased
Distributions payable 543
Accrued management fee 746
Other payables and accrued 20
expenses
TOTAL LIABILITIES 72,409
NET ASSETS $ 1,999,764
Net Assets consist of:
Paid in capital $ 1,999,878
Accumulated undistributed net (114)
realized gain (loss) on
investments
NET ASSETS, for 1,999,747 $ 1,999,764
shares outstanding
NET ASSET VALUE, offering $1.00
price and redemption price
per share ($1,999,764
(divided by) 1,999,747
shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 2000
INTEREST INCOME $ 106,088
EXPENSES
Management fee $ 9,272
Non-interested trustees' 7
compensation
Interest 22
Total expenses before 9,301
reductions
Expense reductions (77) 9,224
NET INTEREST INCOME 96,864
NET REALIZED GAIN (LOSS) ON (19)
INVESTMENT SECURITIES
NET INCREASE IN NET ASSETS $ 96,845
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 2000 YEAR ENDED APRIL 30, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest income $ 96,864 $ 93,866
Net realized gain (loss) (19) (23)
NET INCREASE (DECREASE) IN 96,845 93,843
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (96,864) (93,866)
from interest income
Share transactions at net 1,802,762 2,111,263
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 90,125 88,470
distributions from net
interest income
Cost of shares redeemed (1,982,838) (2,022,494)
NET INCREASE (DECREASE) IN (89,951) 177,239
NET ASSETS AND SHARES
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (DECREASE) (89,970) 177,216
IN NET ASSETS
NET ASSETS
Beginning of period 2,089,734 1,912,518
End of period $ 1,999,764 $ 2,089,734
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED APRIL 30, 2000 1999 1998 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .047 .046 .050 .048 .051
Operations Net interest
income
Less Distributions
From net interest income (.047) (.046) (.050) (.048) (.051)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN A, B 4.81% 4.67% 5.08% 4.92% 5.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,000 $ 2,090 $ 1,913 $ 1,911 $ 1,795
(in millions)
Ratio of expenses to average .45% .47% .46% .45% .45%
net assets
Ratio of expenses to average .45% .46% C .46% .45% .43% C
net assets after expense
reductions
Ratio of net interest income 4.70% 4.57% 4.96% 4.82% 5.14%
to average net assets
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 2000
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 $61,230,000. The weighted average
interest rate was 3.20%.
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 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 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
annual 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 the fund.
To offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$25,036.
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 arrangements 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 $77,000 under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Hereford Street Trust and the Shareholders
of Spartan U.S. Treasury Money Market Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Spartan U.S. Treasury Money Market Fund (a fund of Fidelity Hereford
Street Trust) at April 30, 2000, and the results of its operations,
the changes in its net assets and the financial highlights for the
periods indicated, in conformity with accounting principles generally
accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Spartan U.S. Treasury Money Market
Fund's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing
standards generally accepted in the United States which require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at April 30, 2000 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 31, 2000
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 (FAST(registered trademark))
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 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 Las 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 Las Colinas Blvd.
Irving, TX 75039-5587
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
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GEORGIA
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ILLINOIS
One North Franklin Street
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1415 West 22nd Street
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Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
Three Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
801 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 Old N. 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
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 72nd Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
RHODE ISLAND
47 Providence Place
Providence, RI
TENNESSEE
6150 Poplar Avenue
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 Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
1861 International 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.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Dwight D. Churchill, Vice President
Boyce I. Greer, Vice President
Robert A. Litterst, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Matthew N. Karstetter, Deputy Treasurer
Maria F. Dwyer, 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
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Michael Cook
Abigail P. Johnson
* INDEPENDENT TRUSTEES
SPM-ANN-0600 103625
1.703534.102
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
and 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 (FAST(registered trademark)) 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
